The energy crisis in the UK and Europe should serve as a warning to Australia, it has been warned.
Energy Minister Angus Taylor has warned that Europe’s energy crisis could come to Australia if more is not done to boost gas supplies.
Speaking from Gladstone on Tuesday, he will announce $50.3 million in the upcoming federal budget to fast-track seven priority gas projects to boost storage and supply in Australia’s southern states.
Last month, the competition regulator warned that a gas shortage was expected in New South Wales, Victoria, South Australia and Tasmania as early as this year, likely to continue until 2023 and ” beyond”.
Mr Taylor said the government was accelerating priority gas projects so that Australia did not suffer the “devastating” effects of a gas supply shortfall seen in Europe.
He said Russia’s invasion of Ukraine had created an unacceptable risk to global gas security, as it accounted for around 32% of total gas consumption in Europe and the UK.
Mr Taylor pointed to the Australian Competition and Consumer Commission’s (ACCC) warning of gas supply shortages hitting southern states this year, as well as a gas market deficit on the east coast occurring as early as 2026.
Australia’s Energy Market Operator (AEMO) has also issued a warning about the “risk of shortages” of gas supplies as early as next winter in southern states.
He said the International Energy Agency had noted that significant price rises in Europe had been partly due to a lack of investment in supply and infrastructure.
“The ACCC and AEMO have issued several warnings about the projected gas supply shortfall in the East Coast market as early as this decade,” he said.
“This, along with the energy crisis in Europe, should serve as a warning of what could happen in Australia if there is not enough gas investment at home.
“Gas prices in the UK and Europe have increased by more than 300% in the last 12 months.
“Our prices have remained around 75-80% below these international highs.
“We must continue to invest in gas to keep our price competitive internationally to support local businesses.”
Mr Taylor said projects selected for early work included the APA’s South West Pipeline expansion project in Victoria and Lochard Energy’s Heytesbury underground gas storage project.
Transition Energy Corporation’s gas infrastructure project in Queensland’s Bowen Basin will also receive support, along with the APA’s Surat Hub and its Project Range project.
The second stage of the east coast network expansion was also selected, along with a feasibility study on the most efficient infrastructure to bring natural gas from the Beetaloo sub-basin in the Northern Territory to the east coast gas market.
Mr Taylor said the government would also support the development of carbon capture storage alongside major gas pipelines.
The Coalition will support feasibility studies for CO2 pipelines from the Gladstone area to the Surat and Cooper basins.
There will also be a feasibility study for a CO2 pipeline from the Upper Spencer Gulf region of South Australia to the Cooper Basin.
“The government has a clear position on natural gas storage and carbon capture – we will strongly support these sectors which are essential to both affordable and reliable energy for all Australians, as well as reducing emissions” , Mr. Taylor said.
He said that contrasted with the Labor Party, saying they were ‘willing to risk Australia’s energy security and investments in regional Australia to appease gas activists’.