THE State government and AGL have welcomed a report claiming NSW will suffer a severe gas shortage if projects in Narrabri and Gloucester are not brought online by 2017.
The findings, released by the Australian Energy Market Operator (AEMO), claim future gas availability is inadequate without new local supply.
The AEMO says restrictions on usage may have to be imposed if supply is not forthcoming.
“AEMO’s ‘2013 Gas Statement of Opportunities’ outlines the shortfall in NSW by 2018 would be up to 200 terajoules a day over a seven month period,” Energy Minister Chris Hartcher said.
“That equals half the average daily demand for gas in NSW, or around one third of demand on a peak winter day - potentially affecting around half a million households across the State.
“It would particularly impact upon our manufacturing industries, many of which are already struggling to meet their energy needs in a competitive environment.”
AGL said just five per cent of the State’s gas needs were supplied by reserves in NSW.
“NSW is almost entirely reliant on gas from other States. This report paints a very real picture of the potential shortages facing NSW unless we take action to source gas locally,” AGL managing director Michael Fraser said.
“We have a solution right on our doorstep. AGL’s Gloucester Gas Project has the potential to supply more than 15 per cent of the State’s gas needs by 2017-18. While we understand the concerns some members of the community have about coal seam gas, the fact is we need new sources of supply.
“Coal seam gas is natural gas and we use it every day. Coal seam gas already supplies 35 per cent of eastern Australia’s gas needs.”
The Greens spokesman on mining Jeremy Buckingham denied there was a shortage but said it was time to regulate the industry to ensure the gas needs of those living in NSW were met.
“The rush to export huge amounts of liquid natural gas from Queensland is severely distorting the east coast gas market and the only sensible response is for the government to regulate the industry to ensure domestic supply to households and the manufacturing industry,” he said.
“The AEMO report notes that domestic demand for gas will only increase by 0.9 per cent per annum and it is gas exports that are causing an artificial gas crisis.
“Conventional gas supplies from Moomba in South Australia will be directed away from Sydney and redirected to the export facilities at Gladstone to fulfil export contract commitments.
“Minister Hartcher should stop bleating about coal seam gas and talk with his State and federal colleagues about reserving some of Australia’s conventional gas for domestic needs to avoid this looming market failure.
“Why should the gas consortiums be able to prioritise exports to North Asia over the gas requirements of Australian businesses and households?
"Why aren’t governments acting to ensure Australian gas is made available for Australian use before it can be exported?”