Forget everything you’ve heard – Australia has no gas shortage

One of the most common and biggest scaremongering stories Australians face is that Australia will soon run out of gas – that homes will no longer be able to heat their homes in the winter, or that lights will go out and air conditioning will stop working in the summer because there will be no gas left to generate electricity.

These warnings are becoming increasingly strident. In March, for example, The Australian newspaper warned: “If Australia is to avoid a catastrophic gas shortage, urgent action is needed.” Although winter passed this morning without any disasters, The Australian newspaper is now warning that a “perfect storm warning” has been issued for the energy market on Australia’s east coast.

This is all nonsense.

Australia produces and exports a lot of gas. A really, really big amount. How much? Let’s say 82,000,000 tonnes of the stuff a year. That’s the second largest amount of LNG production in the world, which suggests we’re pretty good at it. But all that gas ultimately leads to global greenhouse gas emissions and we should be reducing emissions.

If you’re wondering how we can be the world’s second largest producer of LNG and yet appear to be short of gas, remember that all of that LNG goes overseas. Australia exports around 75% of the gas produced on our land and offshore, and a further 7% of all Australian gas is used to convert gas to LNG. That’s a total of 82% of our gas. By comparison, Australian homes use 2.6% of all gas produced in Australia.

So when you hear about gas shortages, you need to be aware that the regulator AEMO, the gas industry and its advocates are talking about two different things. AEMO is talking about a gas shortage in the south-east of Australia (NSW, VIC, SA, TAS); the gas companies and their advocates are talking about a gas shortage for their LNG plants that are to be exported overseas.

Crucially, everyone, including the gas industry, is assuming that global gas demand will fall over the next 30 years. The Government’s Future Gas Strategy assumes that gas demand will fall. The reason for this, of course, is climate change. Gas is a fossil fuel that is causing catastrophic warming of the planet and as the world tries to reduce emissions, demand for LNG and gas will fall.

This alone makes it clear that we do not need more gas.

But a look at the numbers makes it clear that the gas shortage is a fake one, caused by gas companies wanting to sell more gas abroad rather than to Australians.

And how big is that “shortage”? The maximum shortage that AEMO says could occur in southeast Australia sometime in the mid-2030s is about 3 tonnes, with the average annual shortage over the entire decade being 2.3 tonnes. 2.3 megatonnes sounds like a lot until you consider that Australia currently exports about 82 megatonnes annually. That’s about 35 times more than the so-called “shortage.”

However, the fact is that Australia is awash in gas and only a tiny fraction of the gas needs to be reallocated to LNG to fill any future shortfalls affecting Australian gas consumers.

The last thing we need is more gas. Gas advocates may shout loudly that it is too complicated to redistribute LNG gas to local consumers, but the policy tools to make this possible are already in place. Gas advocates only care about the profits of their LNG plants, not the wellbeing of Australians.

More gas would only serve to increase profits for foreign gas companies that have no interest in serving the Australian market and are indifferent to reducing emissions to limit the catastrophic impacts of climate change.

Australia doesn’t need more gas and neither does the planet.