Australia’s east coast is facing a looming gas shortfall crisis that will get increasingly worse from 2025 as declining supplies outpace expected declines in gas demand.
This has of course prompted calls for new sources to be developed, so it shouldn’t come as too much of a surprise that Victoria – Australia’s largest gas consumer – has gone out and done just that.
In a somewhat sneaky move, the state announced its approval of Beach Energy’s (ASX:BPT) plan to pipe gas from its Enterprise gas field in the offshore Otway Basin in the bowels of announcement on renewable energy projects.
The announcement had waxed lyrical about projects such as the Mortlake South wind farm and the opening of the 102-megawatt Glenrowan Solar Farm before going on to say that the state was transitioning to 95% renewable energy generation by 2035 while the remaining 5% is gas peaking power.
It was at this point where the state government dropped its little bombshell that it had approved Beach’s plans to produce gas from the Enterprise field on the condition that it made best endeavours to sell to domestic customers first.
No more was made of the topic though Friends of the Earth were predictably quick to raise a hue and cry, slamming the state government’s decision to approve the production of gas from a field near the Twelve Apostles.
It noted that methane is a much stronger greenhouse gas than carbon dioxide and that there was no excuse or need for another gas project in the country despite the gas industry’s claims to the contrary.
Expect to see more gas project approvals
While Victoria seems almost embarrassed to announce its decision to green light the Enterprise development, the fact remains that more such announcements will see the light of day as time goes by.
Regardless of what Friends of the Earth might think, the adoption of renewables and energy storage still isn’t progressing quite as quickly as is needed to replace fossil fuel use in time to meet growing demand.
That means that for the near-term, new sources of gas would still be required in order to keep the lights on, keep homes warm and businesses running.
Not every project will get off the ground.
Some will simply fail the taste test for reasons such as high costs, high CO2 content, or technical challenges that are simply insurmountable.
However, there will be projects that will receive the green light just as Enterprise did and you can bet your bottom dollar that similar provisions regarding domestic gas sales will be written into their approvals.
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