A Secure Gas Supply for Victorians

01 Mar 2022

After more than five decades of affordable and plentiful supply, Victoria is waking up to the fact that we are literally running out of gas. Bass Strait gas fields which have supplied Victorians since the 1960s are now in rapid decline and we do not have sufficient new discoveries in Victoria to replace what we are losing.

Last week a report by the ACCC emphasised that there is a gas shortage forecast for Australia’s southern states from as soon as this year, which is likely to continue next year and beyond. Without action this will lead to higher gas prices or possible supply disruptions which have significant implications for us all.

Victoria uses more gas than any other Australian state or territory. More than 2 million Victorian households and 65,000 businesses rely on gas for heating, hot water, and cooking, and it is a critical feedstock for manufacturers producing chemicals, explosives, fertilisers, plastics and pharmaceuticals.

In a sector currently dominated by coal, natural gas can also fuel gas-powered electricity generators which emit around half the carbon of brown coal and provide critical on-demand firming capacity to support intermittent renewable power generation like solar and wind.

While gas substitution with renewable electricity and other emerging energies provides a possible long-term solution to declining gas reserves, this will take many years and in many applications there are no obvious alternatives right now.

Maintaining reliable gas supply while this energy transition evolves will be critical to preserving our economy and way of life, and can actually support emissions reduction if we can accelerate the reduction of coal in our energy mix. Around 2/3rds of our electricity is still generated from brown coal-fired power stations.

The move to renewables is a transition – not a switch. The truth is, we don’t have the right infrastructure in place to support a sudden change in the energy mix. Today’s electricity grid simply cannot support 100% renewables; and our homes and businesses are reliant on gas supply for their heating and cooking.

The transition of the entire energy system is a lengthy process requiring a long-term commitment – and an expensive one for households switching all their appliances away from gas. New technology, clever engineering, the right policy framework and new behaviours will all be essential, along with a massive investment in infrastructure. It can happen, but it won’t happen overnight.

Viva Energy’s proposed LNG Terminal will bring replacement gas into Victoria in time to avoid imminent market shortages, and can be seamlessly removed in the future when it is no longer required. Without this terminal, new sources of gas and significant investment in pipeline infrastructure will most likely be required. This will take many years to plan and construct, arriving too late to meet the projected shortfall. These are important decisions for our policy makers, and we are pleased to be able to offer a sensible pathway that balances energy security and long-term emission reduction objectives.

Converting natural gas to LNG is one of the safest and most efficient methods of transporting energy. The natural gas industry in the north of the country has been safely shipping gas this way for decades, and our proposed LNG Terminal provides a pathway to bring gas to Victoria to support our own economy and energy security. Viva Energy has been safely shipping oil and fuel to Victoria for over 65 years and we can also help bring gas to maintain reliable supply and sensibly support the energy transition.

Viva Energy supports action to address climate change, and we are looking for every opportunity to reduce our own emissions, develop new fuels and introduce renewable energy sources like hydrogen and solar.

We also have a key role to play in securing the country’s energy security through uncertain and changing times, and are actively working to strike the right balance. Our proposed gas terminal has an important role to play in the transition to a cleaner energy future – for Viva Energy, for Victoria, and for Geelong.

- Lachlan Pfeiffer, Viva Energy Chief Business Development and Sustainability Officer (Published Geelong Advertiser, February 22)