Australia’s Already Expensive Gas To Become Even More So

LNG/Cash Carrier – Image: Pline, CC BY-SA 3.0, Link

A new report to be released today will state gas prices in Australia are set continue to increase for the foreseeable future.

The Climate Council’s “Pollution and Price: The Cost of Investing in Gas” will say a mad dash for cash in exporting Australia’s Liquefied Natural Gas (LNG) has pushed up the price of gas power at the expense of Australian households and business. This is a result of gas prices within the country now being linked to world market prices.

That this has happened shouldn’t be a surprise as it was warned of years ago when the fossil fuel industry was accused of sending up false flags about a “gas crisis” in order to expand production, with the main aim of cashing in overseas rather than any genuine concerns over gas supplies at home. There was plenty of gas for Australia – it’s just that it didn’t stay here.

As a bizarre result of the situation, gas customers in Japan reportedly buy Australian gas more cheaply than Australians and to add to the incredible situation, New South Wales, Victoria and South Australia are apparently facing a shortfall in supply this coming summer.

“Uniquely Stupid”

“Australia is unique in its sheer stupidity in allowing companies to exploit our resources and not insist they provide for our domestic market,” said energy analyst Bruce Robertson last month.

Further upwards pressure on prices will likely result in additional pocketbook pain not just at the gas stovetop, but also at the power point; pushing up the cost of electricity. The only bright side to this is that for every significant price rise, more Australians install solar panels; taking greater control over their energy production, consumption and costs. That’s cold comfort though to those who can’t go solar for whatever reason.

In addition to pricing issues,  a huge expansion of unconventional gas will be required for increasing gas use in power generation. This will involve tens of thousands of new coal seam gas wells says the Climate Council – and all the associated environmental impacts.

“Reliance on gas power, as well as coal, in Australia must be rapidly and deeply reduced if we are to fulfil our commitment to limit global temperature below 2°C,” it states.

Renewables + Storage Are The Answer

The Council says new renewable energy is cost competitive with new gas today – and renewables will only get cheaper.

“The cost of renewable power and storage, particularly solar, wind and batteries, continues to fall and has no associated fuel costs.”

An ANU study (PDF) published in late February stated solar PV, wind and pumped hydro storage can be used to help build a secure and cheap Australian electricity grid with 100 per cent renewable energy,

Unveiling the Climate Council report, which will occur at the Senate Courtyard at Parliament House in Canberra later this morning, will be climate scientist Professor Will Steffen, former President of BP Australasia Greg Bourne,  and energy sector veteran Andrew Stock.

UPDATE – the report can be downloaded here (PDF).

In related news, Prime Minister Malcolm Turnbull yesterday apparently (again) put gas companies on notice that a shortage in eastern states just wasn’t on given Australia is about to become the world’s largest exporter of LNG.