
A global exploration company’s decision to cease its search for new gas supply in Victoria’s Otway Basin has raised concerns about the state’s energy security and potential gas shortages in eastern Australia.
The announcement from seismic surveyor TGS highlights the increasingly challenging regulatory and investment environment in Australia, particularly in Victoria where new gas supply is most needed.
This development comes at a critical time, as Victoria faces potential gas supply shortfalls as early as 2027.
Australian Energy Producers Chief Executive Samantha McCulloch emphasised the urgency of the situation, stating: “Victoria is facing gas supply shortfalls from 2027 and already came close to running out of gas during peak periods this winter.”
The decision by TGS underscores broader issues affecting Australia’s energy sector:
- Increased regulation
- Long delays in project approvals
- Continued demonisation of gas by the Victorian government
- A recent policy decision to replace gas appliances with electric ones in households
These factors are deterring investment and delaying urgently needed new gas supply, potentially increasing the risk of blackouts, disruptions, and higher energy bills.
The Australian Competition and Consumer Commission’s latest quarterly gas inquiry report reveals:
- Eastern Australia faces peak period gas shortfalls from next year
- Structural shortfalls are expected from 2027
- The east-coast gas market may experience supply shortfalls as early as 2027 unless new sources are made available
While the federal government’s granting of two production licences to Beach Energy offshore of Victoria is seen as a positive step, industry experts argue that more supply will be needed to address future shortfalls.
Ms McCulloch stressed the importance of further exploration and development, stating: “Without further exploration and development, future gas shortfalls are almost inevitable.”
The decision by TGS has also reignited debate about seismic surveys:
- Activists have targeted planned seismic surveys
- Industry representatives argue that these surveys are safe and essential
- The technology has been used for over 60 years and is also employed by the offshore wind industry
- The national regulator NOPSEMA has deemed seismic surveys safe for the marine environment
As Australia grapples with its energy future, the departure of TGS from Victoria’s gas exploration scene serves as a stark reminder of the challenges facing the nation’s energy security and the need for balanced, forward-thinking policies to address looming supply shortfalls.