AEMO declares 2023 gas shortage as cartel pillages right now

God save me from the AEMO:

The Australian Energy Market Operator’s (AEMO) latest analysis finds that supply from existing and committed gas developments is expected to provide sufficient resources to meet demand in southern and south-eastern Australia until 2023.

However, additional sources of gas supply are required to address a forecast gap in meeting long-term winter gas demand from 2024. Victorian producers, which produce most of the gas for southern Australia, continue to forecast declining production as offshore gas fields are depleting.

Published today, AEMO’s 2019 Gas Statement of Opportunities (GSOO)and Victorian Gas Planning Report (VGPR) highlight the need for further investment in existing reserves or alternative gas supply infrastructure developments, such as additional north to south pipeline capacity or gas import terminals, to reduce the risk of shortfalls.

“The immediate actions taken by industry and government in response to our 2017 and 2018 GSOO and VGPR reports have delivered an improved outlook for the east coast gas markets, alleviating concerns of a supply shortfall in the short term,” said AEMO’s Chief System Design and Engineering Officer Dr Alex Wonhas.

“However, southern Australia’s overall supply-demand balance for 2021-2023 remains very finely balanced, reflecting the ever-tightening integration of Australia’s electricity and gas markets in the context of an evolving and dynamic energy system,” said Dr Wonhas.

“While the 2019 GSOO is forecasting a short-term reduction in demand for gas-powered generation of electricity (GPG), unforeseen weather-related consumption or contingency events in the electricity market could result in an increased need for GPG, which risks depleting gas storage inventories and tightening the supply-demand balance further,” said Dr Wonhas.

“In Victoria, the continued reduction in gas production resulting from depleting reserves in offshore gas fields translates to a reduction in gas exports from Victoria to New South Wales, South Australia and Tasmania,” said Dr Wonhas.

“The VGPR echoes this analysis, forecasting that from winter 2023, supply of gas from Victoria for South Australia and New South Wales could be limited if a high demand winter day coincides with a significant amount of unplanned thermal generator outages,” said Dr Wonhas.

Absent of longer-term responses such as new commitments to develop existing reserves and contingent resources, increased pipeline capacity from Queensland, or further investment in alternative infrastructure development including gas storage and Liquified Natural Gas (LNG) import terminals, AEMO is projecting an overall gas supply shortfall from 2024.

The reports follow considerable engagement and consultation with Australia’s gas industry and provides a mid to long-term outlook for Australia’s gas sector. The GSOO specifically helps inform the Federal Government’s decision as to whether the Australian Domestic Gas Security Mechanism (ADGSM) needs to be triggered.

The analysis also notes the impact of the recently-operational Northern Gas Pipeline, which can deliver up to 90 terajoules (TJ) of gas daily from the Northern Territory to Queensland. This frees up capacity on the South West Queensland Pipeline (SWQP) for supply to the southern states. Despite this capacity increase, the capacities of the Moomba to Sydney Pipeline (MSP) and the Moomba to Adelaide Pipeline System (MAPS) are expected to reach a limit for southbound gas delivery.

Sack Dr Wonhas. The gas cartel has prices at $10-11Gj today with the Asian price at $6Gj. What does that tell us about the availability of gas today? If there was enough gas to benchmark the price properly, it would be at export net-back of $4.50Gj, delivering a $15-20bn income boost to households and business. That is within Australian Domestic Gas Security Mechanism (ADGSM) standing agreement which seems to have collapsed.

Gas needs its own regulator to toughen and police the ADGSM. The AEMO and ACCC are either completely captured or have absolutely no idea what they are doing.

David Llewellyn-Smith


  1. HadronCollision

    Fark it really is beyond belief
    Assuming you are advocating through your channels into the future Labor govt
    Surely, SURELY, they will pull the ripcord.
    Do it overnight in surprise, BANG

    Public AU will love it

  2. Ronin8317MEMBER

    That’s why we need those gas import terminals, and our gas can go to Japan and then get sold back to us.

    I don’t think it’s regulatory capture, our regulators don’t see benefit to the ordinary Australian as something they should be concerned about.

  3. This is racketeering, plain and simple – criminal conspiracy. We need RICO style laws here in Australia.

    Also, regarding the muppets at the regulator. Used to know heaps of those schmucks back in the day. Would love to spend time talking about all the complex ‘modelling’ they were doing to ‘get the best outcome for the public’. Loved to name drop, ‘oh yeah – very busy due to case work on Gorgon – in Sng next week’.

    Almost all of them now work for energy firms or law firms outside the regulator. Corrupt f*@kers. We need clawback provisions against public servants.

    If me as a banker can get my bonus’s clawed back, even after I have left the firm (on top of the 4 year option payout structure nonsense), well that is good enough for public servants (lol) too.

    Lets go after their pensions. Or at the very least, all non public paid commitments have to be listed, up to 4 years after leaving the public service.

    Name and shame these corrupt losers.

    • ErmingtonPlumbingMEMBER

      Because of the large volumes and revenues involved, no other issue requires more public pressure and oversight than this.
      Constant and sustained pressure must be applied to our media and politicians by us all.
      Spread the word and keep calling them out, at every social gathering, with work colleague and clients, at your kids sporting and school events.
      This deserves to be our #1 economic debate/battle as we become the biggest Gas exporter in the world.

      • Mate you know how ever cloud has a silver lining? The beauty is, many of these people used their ill gotten gains to … wait for it… ‘invest in property’.

        These people are cowards who think ‘relationships’ are all about getting ahead. Amusingly, because they are cowards, they don’t have the stones to take actual risk. So most of the property they have picked up is in the last decade or so.

        And without that sweet sweet capital gainz, what will cover the weekend coke habit? Mistress? Punts at the racing and the occasional casino outings? Our little technocrat caste has been naughty naughty!

        I don’t blame them. They saw everyone else getting ahead, and thought – why not me? Indeed – why not. You know what keeping up with the Joneses used to be called? Envy. One of the seven deadly sins and all that jazz.

        Excellent 🙂 🙂

  4. ErmingtonPlumbingMEMBER

    Twiggy wants in on the rort.
    How much extra money would be in local business and consumers hands Today if Rex Connor got to build his 1974 Gas pipeline.

    “The LNG is expected to be sourced from a mix of the massive LNG projects off Australia’s north-west coast as well as globally given Jera’s international expertise and worldwide purchasing power.

    This would still be relatively expensive compared to historic prices for domestic gas supplies”

    Farther down,

    “the supply of gas which would expected to be supplied to Australia customers somewhere in the range of $9 to $12 a gigajoule for timeframes stretching from three to seven years.

    This is well above prices of $4 to $5 a gigajoule in expiring contracts but still below most of those on offer on the east coast, given the expectation of rising prices in future.

    “With Jera standing behind it, the supply of gas is not in question,” Forrest says in his first formal interview about the project. “The apparatus to deliver gas and energy to the east coast was in question but now it is not.”

    Fk these coporate cnts,…lets build the pipelines directly from the sources of OUR Gas.
    No other Govie funded “Nation building” National infrastructure project makes more sense than this,…probably cost a Shyte load less than that “very fast train” we hear about every fken federal election.

    he was (Rec Connor) cruelly thwarted by the forebears of those who now pay belated tribute to his boldness.

  5. StephenMEMBER

    Surely the Government can just hand out $75 to people again. That’ll fix energy affordability!

    What lunacy…

    • I think Gladys promised $200 “to help with rising electricity bills” in the recent NSW election campaign! It’s the neoliberals’ pancea for their hangovers.

      • The NSW public had never indicated support for electricity privatisation. It is indisputable that in 1997 – when Carr and his treasurer, Michael Egan, presented their plan to sell off power – the Labor conference saved an indifferent first-term government from defeat at the 1999 election by voting down the proposal. Kerry Chikarovski and the Coalition’s promise to sell power cost them dearly at that election, even though they tried to entice voters with a promise of $1100 each in compensation. The architect of the Coalition’s privatisation policy, deputy leader Ron Phillips, even lost his seat on the anti-privatisation backlash.

  6. Australia has been a duo/oligopolist’s paradise. The tyranny of distance and patriarchy maintained it, but no longer. Now corporations exploit venal politicians and State’s’ rivalries. As H&H points out, gas and electricity is where the rent-seeking is most obvious at the moment. But the problem is general. Genuinely free market competition does not (and probably cannot) exist in Australia. We need tougher action by ACCC, where domestic market abuse occurs. In the case of gas, H&H points to the dishonesty of Santos, but successive QLD governments are also guilty. Federally, we have a Minister for energy ignoring his responsibilities wrt ADGSM, while calling for more power for Gladstone industries by way of a new coal-fired power station at Collinsville(!!) where mining and burning local coal caused Sulfur pollution. All the more appalling when energy far in excess of Gladstone’s industrial need flows through the port as coal and CSG/LNG.

  7. This is one cosy cartel that could come quickly crashing down in the likely event of a change in government.