The growing body of opinion reflected in recent articles in The Australian Financial Review that NSW is heading for a critical gas shortage and, at best, a doubling of gas prices, is a result of bureaucratic red tape holding up future gas projects and supply.
The consequences of this to NSW are likely to be profound.
NSW has plentiful supplies of natural coal seam gas but depends on gas from interstate for more than 90 per cent of its gas energy.
Long-term supply contracts from South Australia and Victoria will start to expire in two years and looming shortfalls will be exacerbated from 2016 by competition for gas supply from large liquefied natural gas projects under way in Queensland. Much of the gas NSW is buying will be diverted to Queensland.
To reduce carbon dioxide emissions, state and federal governments have argued in favour of replacing coal as the major energy source with natural gas. With gas-fired generation forecast to increase substantially as carbon legislation drives demand for cleaner generation, gas demand in NSW is expected to treble over the next 20 years.
Dart Energy’s focus in NSW is on providing domestic gas sourced from coal seams. But approvals for these projects and others have been held up. Although the O’Farrell government in NSW supports the CSG industry, the reality is that multiple layers of approvals by state and federal governments, including the recently formed Independent Scientific Committee, are causing lengthy delays.
AFR
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