Australia’s east coast is expected to have a small surplus of gas in the third quarter of 2024, with an improvement in forecast supply since the gas market code was introduced.
Those are the results of the Australian Competition and Consumer Commission’s interim update on gas supply, to be released on Friday, which the Albanese government has said shows new enforceable supply commitments are making a difference.
The ACCC report found the east coast is forecast to have a surplus of six petajoules in the third quarter “even if all uncontracted gas is exported”, up from an estimated shortfall of five petajoules in the December 2023 report.
“The improvement in the outlook is due to both an increase in forecast supply (of seven petajoules) and decrease in forecast demand (of four petajoules),” it said.
The Albanese government’s gas market code, which the ACCC said is intended to secure “adequate gas supply at reasonable prices”, came into full effect in September 2023.
The ACCC said it appeared there would be “sufficient gas to meet demand in the east coast market” but this was “subject to some material uncertainties”.
These include: “the variability of weather affecting gas powered generation”, such as the recent coal power stations and transmission line outages in Victoria; uncertainties in supply; and additional or fewer LNG exports.
The treasurer, Jim Chalmers, said “this report shows that our efforts to deliver more gas at more reasonable prices are making a meaningful difference”.
The energy minister, Chris Bowen, said the gas code of conduct had “already secured legally enforceable additional supply commitments from Esso, Woodside, APLNG and Senex that will deliver 564 [petajoules] into the domestic market to 2033”.
In the longer term, the Australian Energy Market Operator has warned that “small seasonal supply gaps” may emerge from 2026, with the shortages becoming annual ones from 2028 unless additional gas supplies are developed.
The opposition has seized on that finding, with the shadow energy minister, Ted O’Brien, noting in parliament on 26 March that “the east coast gas market is facing material shortfalls from next year”.
Bowen responded that Aemo’s gas statement of opportunities had regularly projected shortfalls from 2013, including under the Coalition government.
The opposition leader, Peter Dutton, has claimed the Coalition will work with the sector “to put more supply into the domestic system”.
Dutton has opposed the mandatory code of conduct, the safeguard mechanism, which requires new gas projects for export to have net zero emissions, and the temporary coal and gas price cap.
Chalmers said the Coalition had claimed “the sky would fall in as result of our price caps and gas code of conduct” but the new data showed they had “no idea what they’re talking about”.
