Australia's gas shortage: What's the solution to this energy crisis?

A predicted 20% drop in annual gas production between 2017 and 2021 could have a considerable impact on the energy sector and consumer supply, a new report has revealed.

The 2017 Gas Statement of Opportunities Report released by the Australian Energy Market Operator (AEMO) has predicted that gas shortages could cause electricity shortfalls in Eastern and Southern Australia.

New South Wales and South Australia are expected to be the first states hit by potential outages as early as 2019, followed by Victoria in 2021 and Queensland from 2030.  

Mike Cleary, AEMO Chief Operating Officer, called for a more integrated and long-term approach to the Australian energy market to ensure the interests of consumers.

"Gas and electricity markets can no longer be viewed in isolation, as the overall convergence of energy markets in eastern and south-eastern Australia demands a single energy view from a national perspective,” he said.

Cleary said the short-term decline in gas production and any resulting energy shortfall could be balanced by, “an increase in coal-fired generation and renewable energy output, combined with an uptake in technologies such as battery storage.”

The looming shortage has highlighted the energy policy divide between federal and state governments, especially in relation to fracking, with Prime Minister Malcolm Turnbull calling on the states to lift restrictions on gas exploration and development.

‘'We are facing an energy crisis in Australia because of these restrictions on gas,’' he said.

Prime Minister Turnbull is set to “urgently” contact gas company CEOs in order to ascertain how the companies, “plan to address this threat to their customers.”   

The potential “energy crisis” comes in spite of Australia’s position as one of the world’s leading exporters of natural gas, with national exports of LNG reaching 37 million tonnes in 2015-16 with a value of over $16 billion.

Bruce Robertson, Investment Analyst at the Institute for Energy Economics and Financial Analysis, disputed the Prime Minister's claim that the crisis was being caused by a lack of exploration, rather pinning the blame on companies for sitting on gas reserves. 

“We are swimming in gas, the idea that we cannot provide for our own population is just a total failure of our energy policy,” Robertson said in an interview with

“Australia is unique in its sheer stupidity in allowing companies to exploit our resources and not insist they provide for our domestic market,” he said.

Robertson called on both the federal and state governments to improve their energy policies and increase competition in the market, suggesting that the “energy crisis” could become far worse.

“The government has to step in and it has to step in forcefully, to ensure the national interest,” he said.

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