Shortage turns focus to Otway gas

SHORTFALLS on the availability of gas for domestic use in Victoria and a massive spike in gas prices is focusing attention on the potential of the Otways Basin to help fuel demand for the resource.

Responding to the energy crisis that has seen gas prices triple for some businesses and warnings from the Australian Energy Market Operator of power shortages in the grid, new Labor Resources Minister Madeleine King and the Australian Workers Union (AWU) have increased pressure on Victoria to expand gas production.

In a series of media interviews, Ms King pointed to state bans on fracking and coal seam gas (CSG) as examples of hurdles to increased production.

“When you put a halt like that on potential exploitation of reserves for consumers and manufacturers, well, it’s clearly a pretty significant barrier,” she said last week.

Victoria legislated a ban on the two controversial gas extraction methods in 2017 and temporarily halted the exploration of extraction of conventional onshore gas while it undertook a three-year study of the sector. The conventional onshore gas ban was lifted in July last year.

AWU national secretary Daniel Walton continued the criticism of the Andrews Government, telling a national paper last week that the gas sector had been “demonised” in the state.

Last week, Mr Andrews said he had no intention of changing bans on fracking and CSG.

“There’s enough energy there… it’s just how it’s bought and sold, how it’s shared and spread,” he said.

“There are some people who want to frack up the joint across the whole state – that’s not us.”

The Andrews Government has long held the position that new conventional gas extracted in the state should be first be offered to local users, and – following predictions that Victoria’s largest gas field in the Bass Strait may be close to depletion – has been increasing its support for the expansion of operators in the Otway Basin.

Lochard, Cooper and Beach Energy are all well established in the region, the latter given the green light by the Corangamite Shire in April to build a gas well near Port Campbell that will source gas via a pipeline beneath the sea floor.

The decision followed the granting of a gas production licence to the company by Victoria’s earth resources regulator a week before which it described as “consistent with the Victorian Government’s ban on fracking”.

The gas exploration and production footprint in the Otway Basin could triple in coming years if offshore leases granted by the state and federal government prove viable.