18 December 2014
AEMO report confirms gas industry challenge
Major factors influencing the decrease in the use of gas are the price going up due to the large amount of gas that will be required for the export market and the challenges being experienced in accelerating gas production to meet new demand.
The Australian Energy Market Operator (AEMO) has today highlighted the challenge facing the Australian gas industry - an expected shortage of gas and/or price hike as supplies are stretched in order to meet the demand for LNG for export, the Australian gas transportation industry said today.
'This report is a reminder that Australia has sufficient gas to supply both domestic and export markets,' Australian Pipeline Industry Association Chief Executive, Ms Cheryl Cartwright, said. 'And we need appropriate government policies to encourage development of those gas supplies.'
APIA first drew this issue to public attention in its report Gas Supply for Australia 2013.
Ms Cartwright said the AEMO report quantifies the decline in domestic gas use in Australia.
'This is very useful information,' Ms Cartwright said.
'The AEMO report suggests the major factors influencing the decrease in the use of gas are the price going up due to the large amount of gas that will be required for the export market and the challenges being experienced in accelerating gas production to meet new demand.
'Governments must act urgently to increase gas supply. This includes removing barriers to development of gas supplies in NSW and Victoria and introducing policy to improve competition in gas supply.
'It can be argued that if the gas supply market was more competitive, production would be increasing in response to the current high prices. It appears this is not happening.
'It is important to ensure that gas-reliant industries do not become permanently lost to Australia because of a price increase that is expected to ease after 2019.'