Southern states face gas supply crisis this winter—here's what you need to know
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As winter approaches, concerns over gas supply shortages are growing, particularly for the southern states.
What was once a seasonal issue is now becoming a more persistent problem, with experts warning of potential shortfalls.
The latest reports have raised alarms about the future of Australia's gas market, and the impact could be felt across multiple sectors.
Australia's competition regulator had issued a warning that the east coast's gas supply was in decline, with southern states like NSW, Victoria, South Australia, and Tasmania facing continued reliance on Queensland to meet demand.
Despite adequate natural gas reserves, the country’s new gas production was not coming online fast enough to replace depleting traditional supply sources like the Gippsland Basin.
The Australian Competition and Consumer Commission (ACCC) made the findings in its interim report into the Gas Inquiry 2017-30, forecasting ‘small shortfalls’ of up to 16 petajoules during the winter months of 2025, when demand peaks.
It noted that as in previous years, gas supply during the winter would need to be drawn from Queensland and storage facilities.
This interim report highlighted ongoing risks of supply shortfalls in the southern states and the need for continued reliance on Queensland gas.
The ACCC’s July update had improved forecasts, but it had urged state and federal governments to ease the entry of new gas sources into the market.
The report stated that barriers to new supply included lengthy regulatory processes, significant capital costs, uncertain policies, and a lack of competition in upstream gas markets.
It also found that while production in Queensland was expected to increase, forecasted supply would exceed demand by 77PJ to 112PJ, but prices remained higher than pre-2022 levels.
International price hikes, coal-fired generator outages, domestic shortages, and the geopolitical impacts of Russia’s invasion of Ukraine were key factors behind the sustained high prices.
The report acknowledged that prices had fallen since 2022 due to lower international prices and improved gas availability.
Minister for Resources, Madeleine King, had welcomed the findings, emphasizing that ‘a secure, reliable and affordable’ gas supply was essential for Australia’s renewable energy transition, which would rely on gas and battery storage.
‘This latest report from the ACCC shows we are securing the gas supply we need for a reliable east coast gas market,’ she had stated.
She had also pointed out that under the Albanese government, an additional 600 petajoules of gas had been injected into the east coast market to help keep prices under control.
As the situation unfolds, will the reliance on Queensland continue, or is there a solution on the horizon? Share your thoughts in the comments below.
What was once a seasonal issue is now becoming a more persistent problem, with experts warning of potential shortfalls.
The latest reports have raised alarms about the future of Australia's gas market, and the impact could be felt across multiple sectors.
Australia's competition regulator had issued a warning that the east coast's gas supply was in decline, with southern states like NSW, Victoria, South Australia, and Tasmania facing continued reliance on Queensland to meet demand.
Despite adequate natural gas reserves, the country’s new gas production was not coming online fast enough to replace depleting traditional supply sources like the Gippsland Basin.
The Australian Competition and Consumer Commission (ACCC) made the findings in its interim report into the Gas Inquiry 2017-30, forecasting ‘small shortfalls’ of up to 16 petajoules during the winter months of 2025, when demand peaks.
It noted that as in previous years, gas supply during the winter would need to be drawn from Queensland and storage facilities.
This interim report highlighted ongoing risks of supply shortfalls in the southern states and the need for continued reliance on Queensland gas.
The ACCC’s July update had improved forecasts, but it had urged state and federal governments to ease the entry of new gas sources into the market.
The report stated that barriers to new supply included lengthy regulatory processes, significant capital costs, uncertain policies, and a lack of competition in upstream gas markets.
It also found that while production in Queensland was expected to increase, forecasted supply would exceed demand by 77PJ to 112PJ, but prices remained higher than pre-2022 levels.
International price hikes, coal-fired generator outages, domestic shortages, and the geopolitical impacts of Russia’s invasion of Ukraine were key factors behind the sustained high prices.
The report acknowledged that prices had fallen since 2022 due to lower international prices and improved gas availability.
Minister for Resources, Madeleine King, had welcomed the findings, emphasizing that ‘a secure, reliable and affordable’ gas supply was essential for Australia’s renewable energy transition, which would rely on gas and battery storage.
‘This latest report from the ACCC shows we are securing the gas supply we need for a reliable east coast gas market,’ she had stated.
She had also pointed out that under the Albanese government, an additional 600 petajoules of gas had been injected into the east coast market to help keep prices under control.
As the situation unfolds, will the reliance on Queensland continue, or is there a solution on the horizon? Share your thoughts in the comments below.
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