Shell Australia on the issue of East Coast Gas Supply
Mar. 09, 2017
Shell Australia’s Country Chair, Andrew Smith made the following statement addressing the issue of east coast gas supply.
Shell has long understood that to continue to gain community acceptance for the thriving, job-creating LNG export industry, we need a functioning domestic gas market to provide reliable and competitive supplies of gas.
Through our projects in Queensland, none of which would have been developed without the scale associated with LNG exports, Shell is committed to play our role in the domestic market.
Shell’s QGC business will sell over 75 petajoules (PJs), net of domestic gas purchases, into the domestic market this year, which represents over 10% of east coast demand and 40% of Queensland’s demand.
We have already sold significant volumes to homes, businesses and manufacturers in Victoria, South Australia and NSW domestic markets and will continue to do so. Unfortunately it would appear that some of our domestic customers are actually selling that gas back to the LNG market which compounds the issue.
Energy systems are enormous and complex with often decade-long lead times for policy changes to kick in. We are in this situation, that is, an energy system which has ongoing reliability and affordability issues because too often, a coordinated approach to energy policy gives way to populist sentiment. Taxpayers and businesses are now essentially paying for their energy twice – through costly subsidies and high energy prices.
Gas is becoming more expensive for a number of reasons including the linking of the domestic and international price, but primarily because deposits of gas in locations which have been ‘easy’ to explore and develop are drying up. To continue to meet the demand for energy, industry has now turned to ‘unconventional’ gas such as CSG, which is often more challenging to develop- that’s even if your state government permits you to explore for it in the first place.
Governments such as those in Victoria and NSW which continue to restrict access to energy resources through short-sighted means, aren’t helping the situation we now find ourselves in as a nation. They need to be held accountable for their decisions today and in the past. Their decisions will be felt the hardest by households, consumers and manufacturers especially in the years to come.
There are significant benefits to manufacturers, farmers and communities from a well-regulated, co-existing onshore gas industry, as evidenced in Queensland but governments have to act now.