2011 PESA Industry Review: Securing Gas Supplies for Domestic Consumption in the Long Term

Abstract

Natural gas plays a critical role in the Australian domestic economy. Households use natural gas as an essential service with applications ranging from space heating and cooking to hot water. In a carbon-constrained environment, gas is likely to play a critical role in fuelling new power stations. Businesses also use natural gas for industrial processing, feedstock purposes and on-site electrical generation and cogeneration. In the context of community concerns about production of coal seam gas, little attention has been paid to the critical role gas plays in the modern Australian economy. This paper examines whether the development of an east coast LNG industry has implications for domestic supply of natural gas. With increased domestic demand for gas (due in part to increased use of gas for power generation), it is necessary to discover new gas resources to ensure security of supply is maintained in the long term. The conclusion seems clear enough: government policies must have adequate consideration for local communities but must also focus on the critical role natural gas plays in the Australian economy - both in value creation and the provision of an essential service for many Australian households.