Threats that the NSW government's restrictions on the coal-seam gas industry will cause a price rise are a bluff that NSW residents should call, according to climate solutions think-tank Beyond Zero Emissions.
“The gas industry has no real commitment to domestic gas supply, and certainly not to cheap supply,” said BZE spokesperson Ben Courtice.
“The gas companies are not desperate to frack NSW for more CSG because they care about the NSW gas supply. They need it for their LNG export trains and contracts with Asia.”
Export commitments, and the move into costly and dirty shale and coal-seam gas, are already driving gas costs up. From $3-4 per gigajoule now, prices are expected to soon rise to as much as $10/GJ.
But gas companies are desperate to secure reserves. For example, gas company Santos' total proven, probable, possible and contingent gas reserves (known in the industry as “3P + 2C”) fell 26% in the last two years, indicating they are struggling to meet their commitment to GLNG export contracts (See PDF)
Image: walking the CSG pipeline (from Friends of the Earth/flickr)
Conflicting opinions have been voiced on NSW gas supply security. Despite numerous announcements that shortages could come as soon as 2015, the head of BHP Petroleum chair Michael Yeager recently said “it's more important to let the citizens of Victoria and NSW and to some degree even Queensland (know) there's plenty of gas to supply those provinces indefinitely"
Whatever the truth of this matter, it is already clear that no new gas power stations are required, with electricity demand falling in Eastern Australia for the last three years. AGL recently put on hold their proposed 1000MW gas power plant at Dalton for the foreseeable future.
Zero gas: the way forwards
“Gas corporations want to access NSW' coal-seam gas at all costs, but is NSW really at risk of shortages? Not if we move towards zero gas use – which our analysis shows is the logical step, from an economic as well as environmental perspective,” Mr Courtice said.
“At the prices we are going to be seeing, no-one will be building new gas power stations in Australia, and households will be hurting at the hip pocket if they rely on gas appliances.”
“NSW can do better than allow itself to be bluffed and bullied by the gas companies. NSW could tomorrow begin to transition away from dirty fossil gas and implement efficient electric technologies powered by renewable energy.”
BZE's research has identified that the technology to replace fossil gas use is now cleaner, more efficient and cheaper to run:
Household heat pumps and induction cooktops can replace fossil gas appliances with greater efficiency and safety, and lower operating costs and greenhouse emissions;
An energy efficiency program as simple as changing halogen light globes across Australia for new LEDs could reduce electricity demand by as much as one large coal power station;
Fossil gas and coal power stations can be replaced with a combination of wind farms, solar panels, and large solar-thermal power plants with molten salt heat storage for backup to run at night.