Oz Victorian Opposition Calls for Upstream Gas

Australian upstream industry group Appea has welcomed the Victorian Opposition’s February 24 announcement of its support for lifting the state’s moratorium on conventional onshore natural gas development. But the Liberal Party remains opposed to hydraulic fracturing, describing it as a "red herring."

Appea CEO Andrew McConville said that Victoria’s homes and business would continue to bear the cost burden if the politically-motivated ban on gas development remained in place. “Without more local supply, families and businesses in the state will pay more than those in states continuing to develop new supply. As the [Australian anti-trust commission] ACCC has highlighted. Shipping gas from Queensland to southern customers adds $2 to $4 [per gigajoule] in transport costs, increasing the wholesale gas price by between 20% and 40%.”

Opposition leader Michael O’Brien said industry and households in the state with the biggest gas consumption were losing out, according to local media reports February 14.

"Look at [aluminium smelting company] Alcoa, it is a very energy-intensive business. If we lose the plant because it is uncompetitive because of high power prices, there will be a huge effect on a lot of families and communities throughout the south-west,” he said. "For the environment, the Liberal Party is committed to lower emissions and natural gas is part of this. Natural gas has much lower emissions then coal, so if we can increase the amount of natural gas in the grid and reduce the use of coal, it's better for the environment. This all-or-nothing approach that some environmentalists have, where if it is not renewables we are completely opposed to it, will not help us get to where we need to be."

But fracking is not necessary for gas production and the ban should remain in place, he said. "We don't need fracking in Victoria. Fracking is only required where you get hard coal seams you need to fracture in order to extract the coal seam gas. We have a brown-coal base which is full of moisture which is why it burns so badly and creates so many emissions. Fracking is a complete red-herring, we don't need it in Victoria. Where [premier] Daniel Andrews is wrong is to be banning natural gas."