No conversation about Australian East Coast gas supply stupidity is complete without mention of West Coast gas supply. Somehow it frequently escapes mention that gas on the west coast is subject to state required supplies to domestic markets and shock horrors the world has not ended.
East coast state governments were craven and stupid. They took royalty deals and didn't require supply continuity and exposed their voters to world prices.
"Cheaper" for the state of Victoria to re-import the gas already exported e.g. by Queensland to Japan at a loss (when subsidies and cleanup costs added - no security deposits to cover the cleanup of abandoned sites and offshore drilling rig abandoned offshore).
Liberal petro-lobbyists using their failed policies as a reason to start fracking farmland.
Gross failures in governance, because the entrenched system of post-politics "jobs for our mates" are awarded to the political stooges.
IIRC pretty much every single Australian mining or resources minister post-politics works for the same companies they gifted billions to as a legislator.
Happy accident, it will drive renewables growth. If the LPG companies were smart they would swoop in here trying to save the day and reduce demand for power to make less money today but more money over time.
This "Honest Government Ad" about Western Australia give a funny and tragically accurate explanation of how the giant gas exporters have bought up former politicians and as a result Western Australia is now pretty much owned by the gas companies.
It's systemtic corruption on the grandest scale and Australia instead of making billions for its natural resources like Norway does or Saudi Arabia or Russia do, actually pays the gas companies to take our gas. Yes its ridiculous - Australia instead of making massive money as a fossil fuel exporter, pays to get rid of the stuff. The video makes it clear why.
Which then gets sold for example to Japan, which on sells it as a higher price.
Funnily enough, WA does not have the same gas supply issues as the east coast. Despite the WA govt. being in the gas producers back pocket, there are still agreements in place which force them to save a certain percent of gas for domestic use.
I work for an oil and gas producer in WA and it is absolutely shocking to me how blatant is the corruption of state politics.
WA state politics is a failed state, which is 100% captured by resource companies. When the WA EPA advised (not decided - advised, which is their remit) that state government environmental approvals should consider the CO2 emissions of the projects under approval... The resource companies got the state premier to phone the head of the EPA and instruct him to cancel the advice immediately. So the WA EPA may as well not exist.
This was all confirmed to have happened after the fact (although of course we all knew at the time). The newspapers were unanimously on the side of the resource companies.
Australia is riddled with corruption from top to bottom.
And the new NACC National Anti Corruption Commission? May as well not exist for all the use it is. What could be more corrupt than the gas companies owning the former politicians of WA.
In this case the 2012 the Liberal party repealed a freshly enacted resources tax, after being voted back into power with scare campaigns "ax the tax" being one of them, except ironically it was actually income for the country, and a tax on the profits of resource extractors.
$4.125 Billion dollars PER YEAR gifted to extractors by the Liberals.
No wonder they all get given nice "jobs for our mates" at the resouce extractors after they get voted out.
Is there any party thats even willing to discuss breaking the gas "deals?" I see guys like Punterspolitics on Instagram who discuss this topic, but I haven't seen any solutions proposed.
andrewstuart, why did you editorialize the article's title from "Does gas-rich Australia really need to start importing it?" to "Australia out of natural gas, pays gas companies to export its reserves"?
Won’t the rising cost of fossil gas due to these issues speed electrification? Behold the death spiral, embrace the death spiral!
(As more fossil gas consumers electrify, an ever smaller population must support the network fixed costs, driving up costs and continuing to more rapidly push consumers to electrify; like bankruptcy, it happens slowly, and then all of a sudden)
It will particularly in Victoria, which has highest number of residential gas connections (90%).
However, the primary dispatchable electricity generation comes from gas fired power plants. To say, Australia has a dependance on gas is an understatement.
Unfortunately, there has been considerable in-action and lack of investment mainly due to the main political parties having competing energy policies. The conservatives previously had a "gas led" generation plan, but due to the gas crisis they have switched to a nuclear-led proposal (Australia has no nuclear power plants, and no expertise in them). The current government is pushing renewables and storage, however progress has been slow due to land owners being unwilling to allow new transmission lines and environmental concerns about offshore wind infrastructure.
Meanwhile about half of Australia's energy comes aging coal power plants, whose live has been extended, all of which are due for phased retirement in the near future.
https://www.bloomberg.com/news/articles/2023-03-07/end-of-co... | https://archive.today/2owbd ("Australia’s rapid shift from coal-fired power to cleaner alternatives is underwriting a boom in battery projects able to store solar and wind energy. The country has at least 250 planned battery developments with a potential capacity of almost 130,000 megawatt-hours, a pipeline that’s second only to China, data compiled by BloombergNEF show. While Australia still relies on coal for more than half of its electricity generation, many major plants are set to close in the next decade.")
https://www.ga.gov.au/scientific-topics/energy/resources/oth... ("Australia receives an average of 58 million PJ of solar radiation per year, approximately 10,000 times larger than its total energy consumption. However, Australia's current use of solar energy is low with solar energy accounting for only about 0.1 per cent of Australia's total primary energy consumption.")
Yep. This is the current direction. As I said, investment uncertainty due to the alternative nuclear proposal, issues with transmission lines, and environment issues for wind projects are the main barriers.
> investment uncertainty due to the alternative nuclear proposal
I think it is a stretch to say that the nuclear proposal is creating any investment uncertainty. What is there to be uncertain about? Optimistically the coalition has to win government then the plant will take >10 years to be designed and constructed (probably much longer assuming that something goes wrong politically). The power produced by such a plant will almost certainly be expensive. Unless Labor makes more supportive sounds it'd be quite reckless to invest in the project as a private investor.
That is far enough out and a small enough commercial risk that it probably doesn't change the investment landscape in the here and now. We could see any number of similar policies as we feel the political backlash from mismanaging our energy infrastructure.
The coalition Nuclear plan comes with dropping 2035 targets and international climate agreements. This creates a lot of uncertainty. Polluting plants and factories remain viable until 2050 (unless a future government walks back), making a lot of investment a crap shoot. Australian industries may find themselves locked out of international trade or subject to tariffs, making export markets uncertain. Nobody believes that the Nuclear power will be as cheap as the government claims, given all the experts and industry representatives say it is bollocks or relies on technology that does not yet exist, creating a lot of uncertainty.
So not so much a problem with Nuclear, but the diversion of funds from other projects needed to meet existing 2035 targets. Still, if the leader of the coalition is able to invent viable small nuclear reactors, bring that much capacity online in such a short time, and produce cheaper electricity than 2037 tech solar/batteries or wind/batteries in the vast, sun drenched plains and deserts of Australia, he probably deserves his Nobel prize and a seat on the board of Westinghouse or similar. After all, taxpayers need to pay for the nationalized generation since no corporations seem willing to invest in this amazing opportunity with its achievable deadlines and budget.
> The coalition Nuclear plan comes with dropping 2035 targets and international climate agreements.
Why would either of those things matter now though? Aren't renewables supposed to be an economic option?
People can "just" invest and make money. There just needs to be some mild support to let the projects start up and maybe I've missed a policy document but it seems unlikely that the Coalition would want to do anything about that.
Internationally, the countries currently paying to meet their Paris targets will need to recoup some of that investment through tariffs on imports from non-participating countries. This is the stick. Will they be nice and not put tariffs on imports that can be demonstrated to be Green enough? Doubtful, given the cartel of Green nations will see the opportunity to increase market share of their own exports. Will your personal investments into Green production, which costs more since you have to personally take on the otherwise externalized cost of pollution, cause you to be noncompetitive? On the local market. Will your customers pay more for the 'Green' logo on your product? Will they believe it? Or will a competitor eat your lunch with their dirty production, relying on the rest of us to pay to clean up, or give up on clean air, cheap healthcare and bearable weather.
I don't want to be impolite but that is verging on gibberish. Someone could build a solar farm and presumably start making money. The costs are reasonable (eg, [0]).
There is an outside risk that in 10 years an extremely expensive source of power enters the market. Assuming a bunch of relatively unlikely stars align, including that someone is mad enough to fund a nuclear plant in Australia despite the usual vocal political opposition that has scuttled the industry in most other western countrys. There is nothing there that threatens solar investment; people invest in riskier capital projects all the time. We're in the middle of what appears to be an energy crisis right now.
The targets and stuff were an issue when mass solar buildouts were an ideological stunt. But we delayed that idiocy for long enough and it appears that private investment will take it from here as long as the environmental approvals etc aren't too onerous.
I hope you are right and that solar, wind and battery farms can continue to navigate environmental regulation, be built, and actually sell enough of their electricity to the grid to turn a profit, without incentives from the government, investment in grid connections to suitable locations, and while gas and coal power remains subsidized in all sorts of ways. If this is true then, yes, the problem solved itself. But I personally suspect continuing rollout of wind and solar and the necessary scale is going to require government support.
So, to get to 100%, Australia would have to increase solar usage by 1000x. Which, according to the above figure, would mean covering ten percent of Australia with solar panels. Sorry, I don’t believe the analysis.
I've had gas service removed from my house and the pipes taken out - but that was for environmental reasons - I'm committed to only using electrical (i.e. fuel independent) appliances.
If only manufacturers would use knobs instead of those horrible and often unintuitive touch interfaces. Here's hoping the slow acknowledgement that touch controls in vehicles are usually a bad idea makes its way to other appliances.
I am fortunate enough to have jumped from owning an apartment to owning a house in the last year. The freedom is amazing.
And renting is woeful.
Landlords renting out anything don't benefit from solar, so they don't install it. Landlords renting out apartments won't want the fees for EV chargers or ripping out gas or even having aircon.
Not all landlords are obstinate about it, some are nice. But the financial incentives are certainly not there.
When I was renting an apartment and talking to people about solar, EV, gas vs electric, heat pumps... I definitely felt like I was a second class citizen.
I haven't gotten around to trying it, but I've heard a lot of good things about getting a cheapish induction hotplate and using it for a lot of cooking.
We went the other way, and converted to a gas cooktop and tankless gas hot water heater. Its a notable cost savings and quality of life improvement - there is no conceivable way to do tankless electric here.
I thought you were exaggerating, but that really is what happening (except for the steal part - your comment would be better without exaggerating).
So instead of selling the gas externally (because they are contractually bound to do so) and then import other gas, I would suggest buying gas from elsewhere to deliver to fulfill the contract and then use the local gas locally.
It would need an analysis of costs.
The reason for all this trouble is apparently the gas field production has gone down faster than predicted.
> except for the steal part - your comment would be better without exaggerating
It is hyperbole, but still appropriate when you consider the meaning of the phrase 'it was a steal'. As with pretty much all extracted resources in Australia, the royalties paid are a pittance relative to the value. The abundance of this type of common wealth in Australia makes people undervalue them in my opinion (to the benefit of the extractors - who have very active and successful lobbyists).
The challenge is that Australia is big, really big. The population is sparse and mainly lives in a few coastal areas.
The parts of Australia that have gas and are exporting it (the west and north), are quite distant from the parts of Australia that are running out of gas and need it locally (the east and south).
In this scenario, it's easier and cheaper to use existing export terminals to send ships to those other parts of the country that need the gas. Unfortunately the optics of doing this is bad.
Are you saying that Australia is extracting the gas in the North and West then shipping it to the South and East directly (using ships instead of laying pipes) or that they are exporting to whomever buys it and then importing from anyone selling it (buying foreign gas)?
There's a lot of joking/confusion around US oil being sold to foreign countries while buying foreign oil. However, a lot of that has to do with the fact the refineries are built to use heavy crude oil while the US oil is light/sweet crude so that they aren't really compatible. Sometimes, the export/import practices sound dumb on face value, but turn out to have some logic once the surface is scratched.
The best analogy for USA equivalent is that imagine Alaska is where we have a bunch of oil / gas, but we need it in New York and Miami.
We can’t lay pipes because of terrain / distance, and the road infrastructure is pretty spotty too.
The companies extracting / producing / selling the oil/gas off in Alaska are private and separate to the companies wanting to buy it in NYC or Miami. There’s minimal government oversight.
It might work out cheaper for the companies to buy gas coming from eg Europe or Canada or Mexico for NYC/Miami vs Alaska (in our instance it would be SE Asia / China). Or from Alaska.
California actually has to import oil from Canada, Ecuador and a a few other countries. The local production is insufficient for the population level plus since the 70s voters wouldn't allow much oil exploration. Washington and Oregon are able to get it from Canada however.
> plus since the 70s voters wouldn't allow much oil exploration
and their beaches are national treasures compared to Texas where they subscribed to the "drill baby drill" mantra and "fuck those beaches. it's just sand" mantra. it is funny comparing California beaches where they did allow offshore drilling for a side-by-side comparison of how they are affected. Take Seal Beach with all of the tarballs vs something nearby like Santa Monica.
I don't have specific information about Seal Beach, but Tar Balls are completely natural and are not [necessarily] caused by drilling.
The are decomposed by a number of bacteria, and unless you happen to know of a spill nearby are not an indicator of a problem. In fact drilling for the oil can reduce them by reducing the pressure that would otherwise squeeze them out.
The US would just lay pipe through the lands of the native peoples and screw the expense or the impact on those lands. The fact Australia is an island makes shipping a very enticing option.
The longest gas pipeline in the world is the PetroChina. The main part of that is around 4,000km (2,500mi) long, BUT passes through 66 cities, and includes 8 branches.
A pipeline from West to East in Australia would be 4,000km long in a perfectly straight line, but have near no branches, and pass through no infrastructure at all for well over 3,500km of it. You're talking areas that are so remote that you need fixed wing aircraft for maintenance because helicopters don't have range, areas that even vehicles will have to carry extended fuel tanks because the nearest fuel supply might be 1,000 miles away, with little to no water supplies.
It could take days or more to get to the pipe for inspection, security would be non-existent.
And all this in a climate that is ... unforgiving. One of the nearby towns to where such a pipeline is situated has the following factoids:
At least one month a year where the mean maximum temperature is 107F.
Holds a record of 160 consecutive days above 100F.
Regularly records 110F+, with record temperatures approaching 120F.
It's highly suspected that the uninhabited areas along that route would exceed those temperatures. Multiple towns in the vicinity have exceeded 120F in the shade on multiple occasions.
The railroad nearby holds the world record for the straightest section of train track: 500mi+ dead straight (though not dead level).
In the United States a ship which consecutively enters two US ports to load and unload a cargo needs to be a US documented vessel. This is not that farfetched, and I have friends in France and worry about their gas supply when New England has a hard winter.
Brett Woods, the chief executive of gas producer Beach Energy...
Woods also warned importing gas could increase local prices for manufacturers that relied on gas for energy or as a feedstock by lifting their exposure to the volatile global commodity market, putting local jobs at risk.
He is calling for governments to focus on opening new gas fields and building more storage facilities ahead of imports.
The molecules of natgas are physically reacted to make methanol, pyrolysis gasoline, butadiene, isobutene and MTBE[1], all of which are important precursors to thousands of product categories. Supposing that you have all of the electricity you want without natgas, where are you going to get the feedstock carbon for cracking?
[1] There are also many other natgas products but the five I've listed are about 98% of natgas chemical production.
There's no need to open new natgas fields for chemical production. As electricity decarbonizes, there will be an oversupply of natgas from existing sources.
Unfortunately I don't think that would work - I would guess that the current situation will resolve before any reactors are online. Possibly even our export contractural obligations would expire by then, too!
How about going big on solar -- seems like there's plenty of sun and open space to do it; and it's the cheapest energy source there is.
I'm all for nuclear if it can be done "right", but it has yet to demonstrate that it can compete economically (SMRs hold promise yet have failed to make headway).
East coast state governments were craven and stupid. They took royalty deals and didn't require supply continuity and exposed their voters to world prices.