The Australian Energy Market Operator (AEMO) has issued a stark warning about potential gas supply shortages on Australia’s east coast, highlighting the urgent need for investment in new supply infrastructure.
This alert comes as the region experiences a surge in gas demand for power generation, driven by a cold snap in southern states.
According to industry reports, East Coast gas production is currently operating at over 99 per cent capacity in an effort to meet the increased demand.
Queensland gas producers are pushing their resources to the limit, sending as much gas as possible to southern states.
AEMO reports that the pipeline connecting Queensland to these southern regions is running at 106 per cent capacity, underscoring the severity of the situation.
Samantha McCulloch, Chief Executive of Australian Energy Producers, stated: “Gas producers are doing everything they can to meet the heightened demand and to keep Australian households warm and businesses running.”
However, she emphasised that the current scenario should not come as a surprise, given repeated warnings from AEMO, the Australian Competition and Consumer Commission, and other independent experts about potential gas supply shortfalls.
The situation has prompted renewed calls for government action to address both immediate and long-term energy security concerns.
McCulloch stressed the need for urgent measures to prevent winter shortfalls from becoming a recurring issue and to avert the structural shortfalls forecast for 2028.
“Australia has abundant gas reserves but needs the political will to restore investment confidence and ensure timely approvals for much-needed new gas supply,” McCulloch explained.
She highlighted the critical role of regulatory certainty and stability in supporting investment in future gas supply projects, from exploration to production.
The recent warning aligns with the government’s Future Gas Strategy, which acknowledges the necessity of gas in the energy mix until 2050 and beyond.
However, industry leaders are calling for more concrete actions to realise this strategy, including:
- Removing barriers to new gas projects
- Addressing approval delays and uncertainty
- Ensuring the 2025 review of the Gas Market Code reestablishes an open, competitive gas market on the East Coast
As Australia continues its transition towards renewable energy sources, the current crisis underscores the ongoing importance of gas power generation in maintaining grid stability and meeting peak demand periods.
With winter demand expected to remain high in the coming weeks, all eyes are now on policymakers and industry stakeholders to collaborate on both short-term solutions and long-term strategies to secure Australia’s energy future.
