To err is human, but to really screw things up is government. Australia is one of the most resource-rich nations in the world and we don’t use any of them, thanks to government.
Largest known uranium deposits in the world? Government bans nuclear in Australia. Third-largest known coal reserves in the world? Government shuts down nearly all our coal-fired power stations, even as global demand for coal reaches record highs. And gas? Oh, you better believe we have lots of gas. We’re the world’s fifth-biggest exporter of natural gas.
And we’re on the brink of importing the stuff.
How did this bizarre situation come to pass? How is it that a country so blessed with resources, including large reserves of natural gas, can achieve such a ridiculous and costly arrangement?
You already know the answer: government. Government and the cronies who line its pockets.
The LNG export industry is based in Queensland and Western Australia. In the case of Queensland, the exploitation of the large reserves of coal seam gas allowed the development of the Gladstone hub, where processing, liquefaction, storage and transport take place. A number of companies are involved. Long-term export contracts have been entered into of 20-30 years’ duration. At the time the initial investments were being made, there was some discussion of whether some of the gas should be reserved for domestic use. But the Labor government declined to make this a condition for the awarding of export permits.
That’s just the beginning of the government stuffing up, though. The hub of gas supply for the populous southern states was the Gippsland Basin and its reserves, which have been mined for decades. That supply has finally and inevitably started to decline. But, due to their demented obsession with ‘Net Zero’, the Victorian government didn’t just fail to explore new reserves: it actively banned it.
If there is a single individual who can be blamed, it is Lily D’Ambrosio, Victoria’s long-serving Minister for Climate Action, Energy and Resources. Notwithstanding the knowledge that Victoria’s reserves would run out, her hostile approach to the gas industry has led to the current stalemate. Some of her actions include imposing a constitutional ban on fracking, banning the conventional drilling for gas (until recently), banning use of gas appliances in newly constructed dwellings, and banning replacement of gas appliances in existing dwellings. She refused to allow gas to be one element of a capacity mechanism to shore up the electricity grid when electrons from renewable energy are unavailable. According to her misguided thinking, renewable energy can back up renewable energy.
Not that other parties should be let off the hook. NSW has faffed around, erecting road blocks to the gas development around Narrabri. This is notwithstanding the fact that the company has always guaranteed the gas would be reserved for domestic purposes. Note here NSW is almost completely reliant on other states for gas.
Unfortunately, D’Ambrosio is far from the dimmest bulb in the governmental light show. There’s federal Climate Change and Energy Minister Chris Bowen and his sidekick, Industry Minister Ed Husic. Husic has rejected a proposed gas development off the shore of Sydney’s northern beaches. Rich Sydneysiders clearly don’t want gas rigs spoiling their beach views any more than they do the wind turbines they foist on rural communities instead.
Even if governments woke up to themselves and released more Queensland gas for domestic use, the pipeline to NSW and Victoria is already at capacity.
And so the price of gas in gas-rich, leading gas-exporting Australia continues to soar.