Australian Producers Warn of Natural Gas Crunch

Australia could face a natural gas shortage later this decade without action to boost domestic supply, according to industry group Australian Energy Producers, which endorsed the federal government’s recently released gas strategy.

“This is a challenge Australia faces this decade. As the Future Gas Strategy points out, without action, the east coast of Australia faces projected shortfalls by 2028 and the west coast by 2030,” Australian Energy Producers chair Meg O’Neill is set to say in a speech on Tuesday, according to an advance copy carried by Reuters.

Earlier this month, the Australian government said in its Future Gas Strategy that Australia would continue to back exploration and increased production of natural gas as the fuel would play a key role in the country’s transition to a net-zero economy by 2050 and help provide a reliable source of energy to Australia’s allies.

Minister for Resources and Northern Australia Madeleine King released the Future Gas Strategy which says that while Australia remains committed to supporting reductions of global greenhouse gas emissions, natural gas must remain affordable for Australian users throughout the transition to net zero.

Commenting on the strategy, O’Neill is expected to say at an industry conference on Tuesday,

“The best solution to a shortage is always supply, supply, supply... And we welcome acknowledgment in the Strategy that we'll need the right regulatory settings to do so.”

Australia also unveiled this month plans to invest as much as US$15 billion (AUS$22.7 billion) over the next decade to become a renewable energy superpower and boost its domestic critical minerals economy. 

This strategy will need to back new natural gas supply to power the next generation of Australian manufacturing, Australian Energy Producers chief executive Samantha McCulloch said last week.

“Before we can grow our manufacturing sector, we have to first avoid the looming structural gas shortfalls facing the east and west coast of Australia from 2028,” McCulloch added.

“If Australia is to become a critical minerals processing world leader, as the Future Made in Australia envisages, we will need even more gas.”

By Tsvetana Paraskova for Oilprice.com

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