Pres­sure build­ing over loom­ing gas short­ages

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short­fall is not in­creas­ing ex­ports, it’s in­creas­ing de­mand at home.

As old coal-fired plants shut down, en­ergy com­pa­nies need gas. Sure there will be re­new­ables in the mix, but gas will pro­vide the baseload sup­ply when de­mand peaks. Man­u­fac­tur­ers need gas too. Glass mak­ers, smelters, plas­tics and chem­i­cal plants rely on af­ford­able gas and sim­ply can’t ac­cess it. This is squarely an area of state re­spon­si­bil­ity.

Geo­science Aus­tralia reck­ons Vic­to­ria is sit­ting on 27 tril­lion cu­bic feet of gas, enough to sup­ply the en­tire east coast mar­ket for 40 years. Yet the Andrews La­bor Gov­ern­ment has leg­is­lated an out­right ban on “un­con­ven­tional” (coal seam) gas ex­plo­ration. Vic­to­ria also has a mora­to­rium on “con­ven­tional” gas de­vel­op­ment to boot.

NSW tech­ni­cally doesn’t have an out­right ban, but the green tape and other re­stric­tions in place have the same ef­fect. San­tos has spent a decade and $1 bil­lion try­ing to de­velop a big gas project at Narrabri that would meet sup­ply of half the state’s needs. While this reg­u­la­tory night­mare drags, NSW im­ports 95 per cent of the gas it uses.

Pre­mier Gla­dys Bere­jik­lian says the pol­icy won’t change. She’s un­der no pres­sure from the state La­bor op­po­si­tion ei­ther. Act­ing Leader Michael Da­ley this week even sug­gested “there is no gas short­age on the east coast of Aus­tralia.” What planet is this guy on?

The ACCC says gas prices would be 25 per cent lower in NSW and Vic­to­ria if they dropped th­ese re­stric­tions. The Prime Min­is­ter is now ex­plic­itly telling house­holds and busi­nesses in th­ese states to blame the Bere­jik­lian and Andrews gov­ern­ments. The Turn­bull strat­egy is now to make that blame stick.

On Wed­nes­day the Prime Min­is­ter had a win. He con­vinced the ma­jor LNG ex­porters to make enough gas avail­able in the east coast mar­ket to meet the pre­dicted short­fall for the next two years.

It’s not a per­ma­nent so­lu­tion, but a start. Turn­bull didn’t need to “pull the trig­ger” on ex­port con­trols, be­cause he didn’t need to. The threat of the trig­ger worked.

La­bor was left look­ing slightly ridicu­lous. It was de­mand­ing Turn­bull pull the trig­ger be­fore the scale of the gas short­fall was ac­tu­ally iden­ti­fied. It still wants the trig­ger pulled now, even after the gas com­pa­nies have acted. This “Yosemite Sam” ap­proach is more about look­ing tough than ac­tu­ally get­ting tough.

When it comes to the states, fed­eral La­bor isn’t muscling up. Ear­lier in the year, Bill Shorten said the states “are pro­duc­ing enough gas”. He now agrees they “do need to do more”. His front bench, mean­while, is torn over whether coal seam gas is a good thing or a bad thing.

Of course pro­tect­ing the en­vi­ron­ment is im­por­tant. Without delv­ing too far into this de­bate, let’s just con­sider the view of the Chief Sci­en­tist Alan Finkel on coal seam gas min­ing. “It’s be­ing used widely across America”, Finkel points out. “The ev­i­dence is that, if prop­erly reg­u­lated, it’s com­pletely safe.”

So if the states won’t lis­ten to the Prime Min­is­ter, the Chief Sci­en­tist, the ACCC, strug­gling man­u­fac­tur­ers or bat­tling house­holds, what will change their minds?

Let’s see if money makes a dif­fer­ence. If NSW and Vic­to­ria start to lose GST rev­enue be­cause of their timid­ity on gas, this is­sue will re­ally bite.

It’s ex­tra­or­di­nary the po­lit­i­cal lead­ers of both par­ties in our two big­gest states can’t see where this gas de­bate is go­ing and re-po­si­tion.

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