Onshore conventional gas has potential to “create jobs”

By PHILIP HOPKINS

STATE and federal government restrictions on gas production are undermining economic development and future jobs in Central and South Gippsland as ExxonMobil’s Bass Strait output runs down over the next decade, reports show.

The gas shortfall also has big implications for Victoria as awhole,according to the Australian Petroleum Production and Exploration Association Victoria’s 2020 gas report showed that Victoria was prospective for onshore conventional gas. Victoria’sleadscientist, Dr AmandaCaples, said development of onshore conventional gas would create jobs and benefit reginal communities and economies.

“Up to 242 jobs, $312 million in gross regional productand $43 millioninroyaltiescould be generated each year during production,”she said in a letter to the then Minister for Resources, Jaclyn Symes, in 2020.

“This couldpotentially start from 2023/24 if industry makes agas discovery, considers it commercially feasible to develop and secures the necessary regulatory approvals.”

Dr Caples said CSIRO social researchfound that about80per cent of Gippsland and South-West communities would embrace, support or tolerate conventional gas development.

“Community support would be enhanced by providing genuine engagement opportunities and more information about industry activity and how the community’sinterests are being managed,” she said.

APPEA chief executive, Samantha McCulloch, said Victoria was facing serious energy consequences, with total gas production set to slide 43 per cent withinthree years, risking the state’s energy security and putting upward pressure on prices for the two million households and 70,000 businesses.

“Governments have known about the impending shortfallfor many years given the forecasts by the Australian Energy Market Operator (AEMO) in repeated studies,” she said.

Ms McCulloch said Australian and state government researchindicated substantial natural gas reserves exist both onshoreand offshoreinBass Strait.

“But there is aneed for regulatory certainty to encourage investment because companies may be unwilling to invest in exploration when the rules keep changing,” she said.

“Far-reaching Commonwealth government interventions have now made it virtually impossible for gas producers to attract the investment needed to develop new gas and put downward pressure on prices.”

Ms McCulloch said certainty aboutthe rules was also required at astate level after adecade of onshore bans and regulatory uncertainty. Keeping gas in the groundwould meanmoreexpensive energy bills.

“Victoria has always relied heavily on gas to heat homes and keep the lights on, but it is not developing its own ample gas resources,” she said.

The state government hasliftedamoratorium on onshore gas development, but is pushing its Gas Substitution Roadmap. This program aims to reduce reliance on natural gas, which contributes about 16 per cent of the state’s greenhouse gas emissions, and pushed options like renewable hydrogen, biogas and electrification.

The roadmap has been blamed for cutting investment to commercialise onshore gas and potentially find more Bass Strait deposits.

Available Gippsland annual production is forecast to reduce from 312 petajoules in 2022 and to 200 PJ in 2026, according to the Australian Energy Market Operator.

Dr Caples said Victoria’s onshore conventional gashad amounts estimated to be in the range of 128-830 PJ.

Victorian production continues to decline, with a large forecast reduction in capacity before winter 2023, according to AEMO figures.

Totalavailable (existing plus committed)production is forecast to reduce from 360 petajoules (PJ) in 2022 to 243 PJ in 2026.

Dr Caples said other key findingsofthe gas report were:

 An onshore conventional gas industry would have no significant impact on water quality, based on groundwater science studies.

Impacts on water quantity and quality would be negligible due to the large geological separation between conventional gas reservoirs and aquifers, and;

 It may have aslight impact on agriculture in respect to land access, livestock and biosecurity;

 Victoria’s onshore petroleum regulatory framework is robustfor managing environmental and safety risks. It could be improved in its provisions for community engagement and transparency.

Ms McCulloch said governments of all levels should recognise the important role of gas in Australia’s energy security and in delivering a cleaner energy future.

“Gas is an important partner and back-up for renewables and will be critical to supporting the state’s renewable energy targets,” she said.

“Withgas already enabling $107 billion of economic activity annually in Victoria andsupporting around 30,000 jobs, new gas supply can also deliver big economic benefits like more jobs and revenues for government.”

The Gippsland BasinisVictoria's most productive petroleum province.

Exploration since the 1960s has yielded several world class oil and gas fields, as well as numerous small and medium-sized fields.