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The head of the consumer watchdog remains confident that Australia will be able to avoid a looming gas deficit this winter.
In a speech to the Australian Domestic Gas Outlook conference, Australian Competition and Consumer Commission director Anna Brakey said non-contracted exports would mean enough gas for the domestic market.
“Since the middle of last year, LNG producers have told us that they collectively expect to export 88 petajjoules of their 146 petajjoules of non-contracted gas,” he told the conference on Tuesday.
“This leaves 58 petajjoules of non-contracted gas without the expectation of export, which, if produced and brought to market, would leave enough gas to address the risk of shortages.”
The comments follow a warning from the Australian Energy Marker Operator that extreme weather could lead to shortages over the winter.
The trader said long-term shortfalls were also a possibility from 2027 without investment in supply.
However, the ACCC commissioner told the governments at the conference that they needed to do more to address the problem.
“It is not only for producers to prevent the deficit. Governments also have a role to play in ensuring sufficient gas supplies both immediately and in the long term,” said Ms. Brakey.
“Uncertainty around the level of demand in 2023 is largely related to the demand for gas-fired generation, which is highly dependent on prevailing weather and electricity market conditions, making forecasting difficult.”
The consumer watchdog was given powers by the federal government to enforce gasoline prices, following market intervention.
Gasoline prices have been capped at $12 a gigajoule in response to rising energy prices, which Ms Brakey said was reasonable.
“This gas price cap has been, and continues to be, an appropriate response to ameliorate the impact on the East Coast gas market of the disruption that the war in Ukraine has had on global energy markets,” he said.
The watchdog said gas will remain a key part of energy markets for years to come as steps are taken to reduce emissions.
“As Australia moves towards net-zero emissions targets, gas is likely to increasingly support the transition between coal-fired power generation and renewable energy sources. This means that the gas is still critical,” she said.
“However, at the same time, consumers are likely to switch to other types of energy from gas, especially in the transition to more renewable energy.”
–PAA
