IPA Today

Failure on the Horizon

Written by
21 March 2023
Originally appeared in The Spectator Australia

The consequence of Daniel Andrews’ constitutional ban on gas is about to catch up with Victoria’s energy supply, to the detriment of every Victorian household and business.

In a recently released report analysing gas transmission network planning, the Australian Energy Market Operator (AEMO) predicts Victoria will be a net importer of gas from 2027.

And worse, Victoria’s loss of energy supply security will occur at a time when shortfalls cannot be met by other jurisdictions because AEMO projects a shortage of gas across all of Australia’s southern states in 2027.

Drastic steps must be taken now to ensure Victorian families have enough power to keep them warm in winter and cool in summer. Failure to do so would represent unprecedented negligence on the part of our politicians, as protecting people against the elements is a core responsibility of government.

This huge blow to Victoria’s future energy security is also a blow to our economic prospects, as industry needs a reliable source of power in order to function.

Both major parties in the Victorian Parliament must immediately revisit their position on onshore gas in the Gippsland and Otway basins to ensure Victorians have the energy they need.

Back in 2012, the Coalition placed a moratorium on onshore gas in those basins, and the current Labor government turned that moratorium into a constitutional ban in 2021. This decision has been disastrous for Victorian and Australian energy security.

On the first day of winter last year, AEMO announced that gas rationing may be required to ensure people could keep the lights on and the heaters running along the east coast. And just days later, AEMO took the unprecedented step of shutting down the operation of the National Energy Market.

Even the Federal Minister for Resources, Labor’s Madeleine King, has conceded that this ban is a significant barrier to solving Victoria’s energy woes.

Previous analysis by the Institute of Public Affairs (IPA) found that the onshore gas in the Gippsland basin alone could power every Australian household for more than 94 years.

Similarly, IPA research found that the onshore gas in the Otway Basin could power every Australian home for more than 37 years.

With gas reserves that vast, it is inconceivable Victoria is set to become a gas importer and the Victorian people, including pensioners and young families, are at risk of not being able to heat and cool their homes.

Opening up these two basins would also provide hundreds, if not thousands, of jobs in two important regions of the state, would prevent a looming energy security crisis, and would rejuvenate a stagnating Victorian economy.

In the absence of alternative sources of baseload power such as nuclear, and in light of the upcoming closure of Victoria’s remaining coal-fired power plants, a secure supply of gas is urgently required to ensure the energy security of all Victorians and Australians.

We need a political class bold enough to undo the ban on onshore gas. Rather than cravenly accepting the alarmist mantras of the Greens and environmental activists, Victorian parliamentarians must act immediately to ensure their constituents have the energy they need to do something as basic as turning on the heater. In so doing, they will also help ensure our state’s future prosperity.

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Saxon Davidson

Saxon Davidson is a Research Fellow at the Institute of Public Affairs.

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