It is the kind of news that is guaranteed to warm the cockles of any green lobbyist’s heart – a 15% drop in gas usage in the June quarter of this year compared to the same period a year ago.

But any celebrations are likely to be immature as EnergyQuest has also flagged that production from the Gippsland Basin fell by 34% over the same period.

From a practical viewpoint, it means that gas supplies continue to decline faster than demand, which is hardly ideal as despite all the merits of renewable energy, it still needs gas to provide firming capacity.

Little wonder than that the natural gas sector has called on Australia to encourage new investment in supply to both prevent any domestic supply crunch and keep its lucrative export industry going.

Of course not everyone agrees that we need more gas.

The Australia Institute has called for the energy transition to be accelerated rather than supporting whilst thousands thronged Sydney’s Macquarie Street to protest against the development of the Narrabri project, which seeks to provide half of New South Wales’ gas demand by 2025.
 

The case for gas support

So should we acquiesce to the gas sector’s call for continued government support – specifically for policies that incentivise upstream gas exploration and development?

There is a pretty strong case for the answer to be yes.

Facts are facts. While the use of renewable energy and energy storage are increasing, it is simply not increasing fast enough to replace fossil fuels completely.

That means that for the short to medium term, we still need fossil fuels – particularly gas – to either provide base load or firming power.

With gas supply continuing to decline, Australia could potentially have the unenviable choice of either having the lights go out or cutting into export revenue.

Even within the constraints of the Government’s Gas Code of Conduct, it is entirely possible to craft policies that encourage gas exploration and development.
 

Just one little caveat

But while support for gas exploration and development should certainly be considered, it should be done in a limited fashion.

After all, while renewables and storage aren’t quite there yet, progress is being made and as time goes on, green energy will be increasingly capable of meeting our needs.

So yes, let’s consider supportive policies but we really need to fix an expiry date – say in 10 years – in order to keep what might be an unfavourable policy at that point from impacting us.

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