The Oxford Institute for Energy Studies reports that Australia’s eastern states face growing risks of gas shortages due to a decade of policy failures, planning delays, and public opposition. Unlike Western Australia, which reserved domestic gas from LNG projects, New South Wales and Victoria lack a sufficient local supply. Aging gas fields, delayed project approvals, and legal challenges have worsened the situation. Despite earlier forecasts of surplus, regulators now warn that LNG imports may be needed by 2025 to avoid shortfalls. Even new sources like the Narrabri and Beetaloo fields face hurdles. Without significant policy changes, East Coast gas supply gaps are likely to persist through the 2030s. They write:
A decade of policy failures, public opposition, and planning delays has raised the risk that Australia’s population-dense eastern states will face physical gas shortages which will only be alleviated through the higher-priced imports of LNG. Unlike Western Australia, which embedded a domestic gas reservation policy when it approved world-scale LNG developments on the Northwest Shelf, a combination of complex federal and state regulation and political divisions over climate policy has left New South Wales and Victoria short of domestic gas which will be critical in partnering renewable power as that sector expands through the second half of this decade.
Australia’s east coast gas industry has faced a flurry of inconsistent but largely negative headlines so far this year.[…]
The legacy east coast gas fields in the Gippsland, Otway and Cooper basins are declining quickly. Gas supplies from Queensland coal seam gas fields are largely committed under LNG export contracts for another decade. There are two other major sources of partial east coast replacement: the Narrabri gas field in NSW and the Beetaloo sub-Basin in the Northern Territory. However, as detailed below, the development of these fields has been hampered by public opposition and complex and lengthy regulatory requirements.
Even with these developments, as assumed in Figure 1, there is still likely to be a supply gap requiring LNG imports in Victoria and NSW. In the absence of Narrabri and Beetaloo, the need for imports will be even greater. The greatest need for imports will be in Victoria where the development of LNG import terminals has also faced lengthy delays. To complicate matters further, the Queensland LNG foundation contracts come to an end in the early-to-mid 2030s, after which significant gas volumes are likely to become available
for the southern domestic market, albeit still with a likely supply gap.
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