IEEFA Australia: Gas industry cries wolf one too many times on gas shortages

NSW Business Chamber’s support for gas industry import terminals and Santos’ Narrabri Gas Project short-sighted

4 December 2019 (IEEFA NSW): A new report commissioned by the NSW Business Chamber arguing strongly in favour of new LNG import terminals wrongly suggests Australia will be experiencing gas shortages by 2025.

Written by consulting group EnergyQuest, the report ‘Running on Empty’ suggests NSW needs to develop the high cost Narrabri Gas Project and LNG import terminals to avoid future gas shortages. 

The NSW Business Chamber has backed up the report with a press release claiming gas shortages are coming, and calling on the NSW government to: ‘rapidly approve the Narrabri Gas Project, subject to Planning Commission endorsement; support the proposed LNG import terminals at Port Kembla and Newcastle; and begin a program of upgrades to ageing gas pipeline infrastructure across the state’.

Bruce Robertson, gas analyst with IEEFA, says this is not the first time NSW consumers have been threatened with shortages

“The gas industry has consistently argued there will be gas shortages as a tactic to gain approval for unpopular projects,” says Robertson.

Robertson says in 2014 AGL claimed NSW consumers would face gas shortages by 2016 if their Gloucester Gas Project was not quickly approved. 

“The Gloucester Gas Project did not proceed, and no gas shortages ensued,” says Robertson.

“Australia has abundant gas for everyone, and yet the gas companies would have us believe we are running out.

“The gas companies latest ruse is to coerce the NSW Business Chamber into supporting its failing industry.

“It’s purely a tactic to get unnecessary, costly, high emitting LNG import terminals approved to further line the pockets of gas companies at the expense of Australian consumers’ energy bills.”

Australia is the world’s second largest exporter of LNG. 70% of Australian east coast gas is sold on the export market leaving just 30% to supply the domestic market. 

Gas companies are proposing to build four LNG import terminals around the nation to supplement supply, whilst also insisting Santos’ high cost gas Narrabri Gas Project is needed.

“If LNG import terminals are built, Australia will be exporting Australian gas and then re-importing it for domestic supply to consumers at higher costs due to the expensive liquefaction, re-gasification and shipping costs involved,” says Robertson. 

“Expensive import terminals will embed high cost gas into our energy system and line the pockets of the gas industry.

“The NSW Business Chamber is ensuring the destruction of its members’ businesses by supporting the gas industries’ plans to develop high cost gas for domestic markets while exporting Australia’s low cost gas overseas.

“It is lamentable that the NSW Chamber has fallen for the oldest trick in the gas industries playbook.”

Media Contact: Kate Finlayson ([email protected]) +61 418 254 237

Author Contact: Bruce Robertson ([email protected])  

About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. www.ieefa.org 

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