Onshore Gas: Lift the moratorium

Reduce Power Prices

Families in Werribee face economic pressure from housing prices – whether paying off a mortgage or renting – exacerbated by ever increasing energy prices.

An ideological approach to energy policy which caters to the Greens obsession with climate change and radical hostility to coal and gas is helping force up energy prices unnecessarily causing financial stress for families, the elderly and the most disadvantaged.

In March 2018 I moved a motion in the Legislative Council, which among other things expressed support for “landholders’ rights to allow gas production on their properties, and a reasonable return for that access and extraction”.

The current moratorium on conventional onshore gas exploration, which is not due to expire until 30 June 2020, is, according to the Australian Competition & Consumer Commission (ACCC) adversely affecting the cost of gas to Victorian consumers – both struggling households and businesses.

Onshore gas can be brought into production much more quickly than offshore gas and the capital costs are also significantly lower.

“Victoria maintained its moratorium on all onshore exploration for gas and other regulatory restrictions acted to limit opportunities for new sources of gas to be identified or developed. These short-term factors all contributed to the dire market conditions we described in our September 2017 report, where there was a significant forecast supply shortfall and C&I [commercial and industrial] users were receiving very few offers (and often only one offer) for gas, at extremely high prices”

In a media release dated 3 May 2018 the Chairman of the ACCC, Rod Sims, explained:

“The energy market is working extremely well for energy companies, but is working badly for commercial and industrial [C&I] users. It is the C&I customers who need us to find solutions; the energy companies don’t have as strong an incentive to fix the problem.”

The Chairman singled out the gas market as being of heightened concern to Commercial and Industrial (C&I) users, given the implications for employment, investment and company viability.

“If the gas market was functioning effectively, current price signals would encourage additional investment but the gas shortfall for southern states, moratoria and other regulatory restrictions are impeding the market,” Mr Sims said.

Qenos, which employs hundreds of workers at its Altona plant, some of them from Werribee, has warned that job cuts may be necessary if nothing is done to lower the price of gas. 

There are onshore gas resources already identified by Australian company Lakes Oil but no further steps can be taken to access them because of the moratorium. 

Minister for Resources Tim Pallas has been praised by Friends of the Earth for maintaining the moratorium that stops these gas resources being developed. 

If Labor is returned or the Greens gain the balance of power then Victorians, including struggling households in Werribee and local businesses that employ local workers will thanks to the Pallas-backed moratorium continue to suffer from unnecessarily high gas prices.

As the Independent member for Werribee I would continue to advocate for a common sense approach to gas exploration that is not subservient to Green ideology.

See my Cost of Living Policy for more information

Showing 4 comments

Please check your e-mail for a link to activate your account.
Secured Via NationBuilder
  • Geoff Rogers
    commented 2018-11-16 10:42:09 +1100
    Good enough for NT Labor Government, should be good for Vic, but Greens and militant unions call the shots here, and we pay more than necessary for power, gas and result is we have lost major export manufacturing industries.
  • Geoff Rogers
    commented 2018-11-09 23:46:32 +1100
    Unlike gas that is produced from offshore or interstate fields, a royalty will be payable to the State of Victoria for gas produced from onshore fields. Victoria derives no royalty from gas produced from ExxonMobil-BHP’s Bass Strait gas production.

    The royalty payable by Lakes Oil will be 10% of the wellhead value of the gas. The
    following table sets out conservative estimates of the royalty payments that could
    accrue to Victoria through production of conventional gas from Lakes Oil’s tenements.

    Total Royalty estimate (25 years) low $0.8B med $1.7B high$3.0B

    The income that the Victorian Government could earn from royalties payable for
    production of gas from conventional, onshore resources is enormous, and should be
    utilised for the benefit of the State and its communities, such as Werribee.
  • Geoff Rogers
    commented 2018-11-09 23:42:03 +1100
    It is much quicker to develop onshore gas resources and well within the means of smaller Australian-owned explorer/developers like Lakes Oil, who hold the lease near Longford. Surely we want to encourage this.

    Multinational giant ExxonMobil, operator of the largest and most mature oil and gas production facilities in Gippsland is in early stages of defining the extent of, and best way to develop, the large recently discovered Dory field located offshore in Bass Strait, but this is at least 7-10 years from fruition and will cost probably $5Bn, due to depth of the water.
  • Rachel Carling
    published this page in News 2018-11-08 09:45:22 +1100