Essay by Eric Worrall
Joined up thinking running strong in the Australian People’s Republic of Victoria.
Victoria facing gas shortage as market regulator warns of further intervention
Iona gas storage facility drops to record-low supply levels due to high demand amid Victoria’s price cap
Australian Associated Press
Tue 19 Jul 2022 10.45 AEST
Australia’s energy regulator has warned Victoria is facing a gas shortage which could plunge the electricity market into a fresh crisis.
The Iona gas storage facility in Port Campbell has dropped to record-low supply levels due to high demand amid the state’s price cap.
In an industry letter issued on Monday, the Australian Energy Market Operator (AEMO) warned of the risk of curtailment during peak demand.
“AEMO has determined that there is a possibility that market or operational responses may prove insufficient to alleviate the threat. AEMO is considering all other possible options prior to intervening,” it said.
Lochard Energy, which owns Iona, said “unplanned coal fired generation outages” and cold weather has increased demand.
The state’s price cap remains at $40 per gigajoule, as demand for gas continues to soar globally due to various factors including a significant drop in supply caused by the war in Ukraine.
While acknowledging the energy network is under pressure, the state’s deputy premier, Jacinta Allan, says Victoria is a net gas exporter and AEMO’s latest advice is the state has enough supply to meet its needs.
…Read more: https://www.theguardian.com/australia-news/2022/jul/19/victoria-facing-gas-shortage-as-market-regulator-warns-of-further-intervention
In 2021 Victoria made a big show of their green energy plans and hostility towards gas extraction, by enshrining a ban on fracking into the state constitution.
Enshrining Victoria’s Ban On Fracking Forever
05 March 2021
The Andrews Labor Government has listened to farmers and regional communities and banned fracking in Victoria for good, enshrining the ban in the state’s Constitution.
The Constitution Amendment (Fracking Ban) Bill 2020 has passed through the Upper House and Victoria’s Constitution will now be amended, safeguarding our regions from the threat of practices that could harm the environment.
Fracking was banned in 2017 and at the 2018 election, the Labor Government promised to put that ban in the Constitution – to make it harder for future Liberal and National governments to put our food and fibre sector at risk.
The restart of the onshore conventional gas sector is on track for 1 July 2021. This restart follows three years of detailed scientific investigations by the Victorian Gas Program (VGP), which found an onshore conventional gas industry would not compromise the environment or our vital agricultural sector.
Conventional gas extraction does not involve fracking – it is a tried and tested method to access gas deep underground trapped by an impermeable rock layer.
South-west Victoria and Gippsland are the main regions set to benefit, where geoscience studies have located potentially significant onshore conventional gas resources.
Production of the estimated onshore conventional gas resources could generate approximately $300 million annually for regional economies and create up to 6,400 jobs over the lifespan of these projects.
Victoria’s regulations governing onshore conventional gas exploration are being improved based on the recommendations of the VGP’s independent stakeholder advisory panel, made up of farmers, environment groups, industry representatives and local councils. Public consultation on the new regulations will begin in April.
Quotes attributable to Minister for Resources Jaclyn Symes
“No other government in the world has gone as far as enshrining a coal seam gas and fracking ban in their constitution – but we’re determined to make this a permanent decision.”
“We’ve listened to our rural communities who have told us they do not want the unacceptable risks that fracking brings that could impact our farming and tourism sectors.”Source: https://www.premier.vic.gov.au/enshrining-victorias-ban-fracking-forever
Energy sources are only useful if they can deliver energy when you need it.
An AEMO report published in March suggests “… The declining Victorian production capacity during the outlook period is also expected to reduce system resilience. …”. Similar warnings were also present in the 2021, 2020, 2019, 2018 and 2017 reports, so the Victorian Government had plenty of advance warning they had a problem. The Victorian Government’s response to these warnings was to add a permanent fracking ban to the Victorian state constitution in 2021.
To be fair the AEMO predicted Victoria would not start facing winter shortfalls until 2024, but it seems pretty reckless to knowingly run an entire state’s energy supply close to the point of failure, when there are readily available options to alleviate the stress.
Dan Andrews, the premier of Victoria who passed the constitutional amendment which banned fracking, was also the premier who last year ordered police to fire rubber bullets at unarmed workers, during a vaccine mandate protest.