Is Australia’s energy crisis starting…..?

9 03 2017

This morning on the news, we were woken up to the fact we could be facing gas shortages in Australia. And because more and more electricity is generated with this fuel (Tasmania and South Australia immediately come to mind), the repercussions could be electricity rationing, as well as gas for heating and cooking.

An assessment from the Australian Energy Market Operator (AEMO) is warning that, without a swift response, Australia could face a difficult choice — keeping the power on versus cutting gas supplies to residential and business customers.

“If we do nothing, we’re going to see shortfalls in gas, we’re going to see shortfalls in electricity,” AEMO chief operating officer Mike Cleary said.

The analysis said without new development to support more gas-powered electricity generation, modelling showed supply shortfalls of between 80 gigawatt hours and 363 gigawatt hours could be expected from summer 2018/19 until 2020/21.

It’s not like we weren’t warned……  I wrote about this almost three years ago…. at the time, I quoted Matt Mushalik…: “In July 2006 then Prime Minister Howard declared Australia an energy super power. Two years earlier his energy white paper set the framework for unlimited gas exports while neglecting to set aside gas for domestic use”

Bloomberg agrees…..

Australia, the world’s second-largest exporter of liquefied natural gas, needs to remove road blocks to gas exploration on the east coast that Prime Minister Malcolm Turnbull blames for a looming domestic supply crisis.

“We are facing an energy crisis in Australia because of this restriction of gas,” Turnbull told a business conference in Sydney on Thursday. “Gas reserves or gas resources are not the issue. The biggest problem at the moment is the political opposition from state governments to it being exploited.”

Hang on a minute…… if we are indeed the world’s second biggest gas exporter, why do we need more exploration (code for really dirty coal seam gas)..? And if we are exporting so much gas, why can’t we cut down on the exports, and keep some for ourselves?

I smell a rat…….

According to Bloomberg again……

Origin Energy Ltd, Australia’s largest electricity company, on Tuesday said Queensland gas intended for LNG exports to Asia may be diverted to ease an expected supply shortfall this winter.

So there’s no problem then…?

Royal Dutch Shell Plc, owner of the $20 billion Queensland Curtis LNG development, said in an emailed statement that its QGC Ltd. subsidiary will continue to make gas available “where we have the capacity to do so.”

gas burning.So there’s capacity for export but not for domestic use…. and the hogwash continues at full speed with more statements like “Energy security has come under scrutiny since a state-wide blackout in September hit South Australia, the mainland state most reliant on renewable energy generation. Turnbull’s conservative leaning government called the state “utterly complacent” due to its over reliance on renewable energy following a partial blackout in February, whilst later attacking other left-leaning state governments for similar ambitions.” Oh I get it now…..  it’s the renewables’ fault that we are short on gas. And what on Earth is a left leaning state? You mean like Queensland’s ALP government going full steam ahead to support Adani’s project for the world’s largest coal mine..?

Give me a break Malcolm….  this is all your greedy lot’s fault, you damn well know you can get more money for gas overseas than we are willing (or able) to pay for it locally.

Do the morons in charge really think we are all dills who can’t see through all their propaganda?   “Economics and engineering, they should be the two load stars of our national energy policy,” Turnbull said. “We’ve got to get the ideology and the politics out of it.”  YOU first Malcolm….. you’re not interested in Australia’s energy security, you just want to kow-tow to the right wing nuts in your party, and maximise your mates’ profits…..

Consumer groups are saying it’s too early to advise people whether to switch away from gas, despite the forecast by the Australian Energy Market Operator of a looming shortage on the country’s east coast. Energy Consumers Australia (ECA) said householders should instead research the most competitive offers available from across the range of energy providers. I think consumers should look at alternative technologies myself. While I constantly discredit solar PV on this blog, the most sustainable form of solar power, solar water heating, is struggling to make inroads these days.

Some of the advice is simply ludicrous…. as if LED lights will save you from an energy crisis (let’s call a spade a spade here..) and “The main use of gas is in central heating and hot water, so if you’re building a new house think about reverse cycle air-conditioning or heat pumps” Mr Stock said.  But but…….  Mr Stock, do you realise it’s possible to build houses that actually do NOT need any heating and cooling?

And people wonder why I think we’ll be rooned…….. my wood fired AGA‘s looking pretty good right now.




22 responses

9 03 2017

As I have asked elsewhere,
can anyone here tell me why are we paying more than 40 cents per litre for auto gas if we are exporting so much to the rest of the world?

Apart from politics I mean.

9 03 2017
Jonathan Maddox

Different stuff. LNG is cryogenically liquefied methane. “Auto gas” is “natural gas liquids”, NGLs, like butane and propane, which are gas much of the time but easily liquefy under pressure or a bit of refrigeration. More to the point, they’re much rarer than methane and unlikely to be found in any quantity in coal seams.

9 03 2017

Auto gas and LNG are different things. That being said, we are indeed paying through the nose for heating/cooking/electricity generating & industrial-power gas simply because we have to ‘compete’ with the contracts signed by the major gas producers with overseas customers (with the connivance of revenue-hungry gov’t of course)! Gas is a ‘fungible’ resource which, if you’re not familiar with the concept, simply means that it assumes a common, universal value determined by whomever will pay the most for it! Hence the notion that we Australians have to ‘compete’ with foreign buyers for our own resources! Remember that – at the moment anyway – China can outbid anyone in the world on both the spot market and for gas/petroleum contracts. So while we’re in this game we’re stuffed. IMHO we need to extract ourselves from it ASAP while we can. Gas is the only viable national resource we have left that is sufficiently accessible and ‘scaleable’ to power the transitions this country needs to make to survive the next 50-odd years!

12 03 2017

yes, australia has gas, but the environmental cost of extracting it is very, very high. remember, australia has only 8% of its land classified as ‘arable’. gas exploitation is destroying much of that already.

15 03 2017

John & Sam, I am fully aware of the difference in the various gas types.
However the technologies for LPG, CNG, LNG and even liquefied town gas etc etc are not so different to the point where with minor/major changes in equipment and in some cases minor tuning changes all types can be used in petrol engines.
If interested you can also run gasifiers utilising wood/charcoal burners to achieve a similar outcome. Although not on an XR8 ute or WRX, plus you would want to avoid the EPA etc when it runs cold and fumy.
It may still come to that for more than remote homesteaders and “dem dam crazy hippy buggers on communes”.

My point is we should not be exporting our gas to the point where we no longer have enough domestic supply to power our industry, supply domestic customers and power our automotive fleet, let alone do it at a decent price point.

And there are still some of the exporters who have not yet paid any royalties or taxes, even though they have been shipping the gas for a couple of years because of the way the contracts have been written and the incentives given by our lords and masters, who of course only work in our best interests.

Last time I was involved in an audit (?sort of an audit as part of a course group) in 2010, gas from north west OZ was retailing in South Korea for 60% of the price paid by NSW customers. It was similar in Japan and three other SEA countries.
So the arguments of world market pricing do not match reality.

There has to be another reason we are being sold out, which may enter into tin foil conspiracy theory territory, but it is late and I am tired.

9 03 2017

Hear! Hear!. You’ve nailed it. We don’t have a shortage of gas, we have a shortage of politicians who put our own people first instead of their personal and friends’ wallets. The NLP has never been ‘for’ Australia; they’ve always been for their 1% mates.

9 03 2017

“….you’re not interested in Australia’s energy security, you just want to kow-tow to the right wing nuts in your party, and maximise your mates’ profits…”
Yes Shirley, Mike nailed it exactly. Why can’t the voters at large see this – not just re the energy question but on so many other issues.

9 03 2017

That last point is the key.
My house in rural Victoria is so designed that it needs no heater or aircon.
Gas is not required!

9 03 2017

Jack it should be mandatory for all new houses to be built like yours ( and Mike’s). But in Tasmania, our Neanderthal conservative Government has now decided to give the big green light to builders and developers to build anything they like – our planning guidelines re minimum size blocks, open space, 5 star energy ratings, overshadowing of neighbouring properties etc are all out the window.

10 03 2017

So how do you cook?

10 03 2017

I do all my cooking electrically – elecric frypan, slow cooker, microwave oven, electric jug etc. The electricity comes from the “off grid” PV power supply. There is plenty of electrical energy available, and because of the house design, no energy is needed for heating or cooling. The appliances – cooking, entertainment etc amounts to only 5kwh per day including dishwasher.

11 03 2017

Wow……. how can you afford enough off the grid power to run 5kWh/day, most of which must be heating?

Our old house – and our new one – has a design criteria of 2kWh/day…… but we don’t heat ANYTHING with electricity. Though we may use some induction cooking on rare occasions, if/when it’s too hot to run the AGA for cooking (with firewood).

I’m the dishwasher……..

11 03 2017

I have 20 modules (3.6kw) here in rural Victoria feeding a 1000Ah 24v battery which powers a 2.4kw inverter. (There is also a basic petrol generator for those midwinter dull days). At this time of the year it takes only 8 of the modules to top up my battery by the end of the day. As the winter approaches, I will switch in more modules.
My cooking appliances certainly use heat but even using the dishwasher, the total is still only 5kwh per day.
I don’t bother with induction cooking since that would require a larger inverter.
My kitchen does have a gas cooker but I have never used it. I expect its main role has to do with resale of the property.
There is no need for wood consumption, as much as I love a (nostalgic) wood heater. I don’t need a heater at all thanks to the design of the building.
During the year, the mean temperature of the building varies between 16 and 28 degrees. At 16 degrees I can put on a pullover or better still, get on the exercise bike.

9 03 2017

Coincidentally (perhaps) there have been amazing offerings today on RN and ABC-TV on the same themes as Mike’s post:

TV: The Drum, Thursday, 9 Mar
“Ellen Fanning is joined by senior campaigner at GetUp! Miriam Lyons, senior economics writer for Fairfax Media Jessica Irvine and the Ombudsman for Small Business & Family Enterprise, Kate Carnell. #TheDrum”

RN – Big Ideas: Beyond growth as we know it – How can we stop consuming our future? presented by The Rescope Project. 4 February 201”
“Only lowering our living standards will achieve sustainable growth. That’s the message from Satyajit Das, a former financier who anticipated the GFC. Debt, energy consumption, housing affordability or superannuation – it’s all based on a financial system that’s in fact a completely fictional model. This model was always doomed to fail – eventually.”
Book Title: A Banquet of Consequences: Have We Consumed Our Own Future? Author: Satyajit Das

Multiple mentions of EROI, the fungibility of petroleum products, the lack of magic solutions, population & resource economics, the absolute paucity of federal energy policy, the bankrupt nature of current political thinking etc etc – all, the stuff we’ve been discussing for years!

Recommended watching/listening anyway!


10 03 2017
Dr. George W. Oprisko

Dr. Bill Mitchell of the University of New South Wales….. discussed this in depth……..

In summary:

Auz has chosen to privatize it’s natural resources, including it’s considerable energy reserves, which exist mostly in the form of Natural gas.
The companies built liquefaction plants to make LNG for shipment to Japan and South Korea, where they can charge more. Those shipments are on long
term contracts, which require the companies to provide gas or pay penalties.
The companies find it cheaper to get that gas at the expense of the Auz consumer, than to purchase it in the GCC or Sahalin Island (Russia)

This is the same ploy employed by Maggie, when she approved dumping NorthSea Crude on the International Market, instead of saving the resource for use in the UK.
She got short term economic clout, while the UK got long term energy deficit.
Your Auz govt, following the very same economic paradigm, is dumping the country’s natural resources on the international market for short term economic gain, regardless of the consequences.

Until you throw the bums out……… things will get worse…….. much worse….


10 03 2017

THIS is a large part of the problem…….

South Korea was the world’s ninth-largest energy consumer in 2015, according to estimates from the BP Statistical Review of World Energy 2016.1 Because South Korea lacks domestic energy reserves, it is one of the top energy importers in the world and relies on imports for about 98% of its fossil fuel consumption. South Korea ranks among the world’s top five importers of liquefied natural gas, coal, crude oil, and refined products.2 South Korea has no international oil or natural gas pipelines and relies exclusively on tanker shipments of LNG and crude oil.


Stability, security and affordability of fossil fuel imports are high priorities for Japan. Japan is so deficient in natural resources that in 2014 it imported more than 90 per cent of its primary energy supply. Japan is the world’s largest LNG importer, second-largest coal importer, and third-largest net importer of crude oil and oil products.

We may have lots of gas here, but peak energy is peak energy, and it’s GLOBAL…… if we were to keep it all to ourselves, I have little doubt that the eventual result would be war. NEVER forget that WWII was all about fossil fuels, oil in particular, as at the time there was still plenty of that and little gas was used.

10 03 2017

Actually, the gas extractors are selling overseas at a *loss*. However! They are more than recouping that by selling at extortionately high prices to domestic consumers, principally electricity generators and other industrial users.

11 03 2017

Are you sure……..? I thought we were paying less for our domestic gas, which is why they are not keen to sell it to us…

13 03 2017
10 03 2017

This shows up the falsity of believing exports are good, [and imports bad]. It is the opposite. We are doing what Maggie did with North Sea oil, short term profit and long term loss. By not husbanding our gas, we will eventually have to import it. Exports that drain our natural resources impoverish the country. Where is the gold from 1851 on now? certainly not here. or very little. We should look at the old Fertile Crescent in the M E. No one would consider such a description now. We will do the same in a fraction of the time!

16 03 2017

Mike, I am contacting you as the Chair of the Sustainable Engineering Society Victoria. In doing so I have to say I share you outlook on sustainability matters, but am doing some small thing in the hope that it may help! I am trying to organise an event on “ Energy for the Future” and am proposing the first speaker be able to articulate what the declining ERoEI decline could mean for the future of energy and economies, and any possible energy transition. I am finding it hard to locate a potential local speaker. You seem to have plenty of contacts, but do you have any Aussie contact who may be across the issue?

Keep up the good work.

You may be interested in this link.


Keith Altmann 0418316862


17 03 2017

Hello Keith…. thank you for contacting me.

I would suggest Ian Dunlop, He is well versed in all this stuff and has credibility second to none.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s