Vic, NSW gas bans’making SA issue worse’

Written by Australian financial Review, Simon Evans

South Australian Treasurer Tom Koutsantonis says bans and moratoriums
in Victoria and NSW on onshore gas exploration are exacerbating a shortage of gas in the national market as he puts a deadline of December 6 on a $24 million carrot for gas explorers in his home state.

The SA Treasurer and Energy Minister is trying to inject some extra gas
supply into the market with a package that includes grants for companies
unlocking gas reserves in the state, providing those gas supplies are offered to the SA market first It is an attempt to increase the competition
in the market and to boost the supply of affordable gas to South Australian
gas-fired generators in a bid to lower electricity prices in South Australia,
which are the highest in the nation.

The SA government has copped criticism over consistently high electricity
prices and the state-wide power blackout on September 28, which left some
big industrial users such as BHP Billiton without power for 12 days. But Mr Koutsantonis concedes it is hard to make inroads.

“The levers available to us are limited,” he said. Mr Koutsantonis blames the Olsen Liberal government in South Australia, which privatised the state’s electricity assets in the late 1990s and decided against building the Riverlink inter-connector with NSW, which would have brought more power supply into the state.

He says South Australia has an open door policy when it comes to onshore
gas exploration and development, and he is pushing hard for more of the
state’s gas reserves to be developed, particularly in the Cooper and Otway

“There is a lack of available gas in the national market, a situation made worse by the decision in Victoria to ban onshore gas exploration and development, and a similar moratorium in NSW,” Mr Koutsantonis said.

The permanent ban on fracMng in Victoria was announced by Premier
Daniel Andrews in late August, after an original moratorium put in place in

In early September, the South Australian government announced a package of measures, including launching a tender for the procurement of 75 per cent of its own long-term electricity needs to entice a new electricity player into the market as it tried to get on the front foot in reducing electricity prices.

BHP Billiton’s Olympic Dam mine, 560 kilometres north of Adelaide, was
put on care and maintenance on September 28 after the power blackout. Olympic Dam asset president Jacqui McGill said on Friday that more gasfired power needed to be brought back into South Australia’s power grid, because local businesses already paid 40 per cent more for power than their eastern states counterparts.

Householders are taking matters into their owns hands, with demand
for home battery storage systems such as the Tesla Powerwall system and
ASX-listed Redflows ZCell systems soaring in the wake of the blackout.

“There is a lack of gas in the market… made worse by the decision in Victoria.”
Tom Koutsantonis

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