Alan Pears writes in The Conversation (4.8.16) about the dilemma caused by increased demand for Australia’s supplies of liquified natural gas, and points to ways of reducing the threat of a ‘gas crisis’, including the development of more renewable energy options.
‘Concern about higher and more volatile gas prices in southern and eastern Australia is spreading. Recent gas price spikes in South Australia have impacted on electricity prices and raised concerns about future prices for industry and households.
‘Average gas prices for large industrial consumers rose by 60% between 2010 and 2015, while household prices climbed by 20%. But prices vary a lot from state to state. In industry, most gas is used for process heat, while in homes, space and water heating are the big gas consumers.
‘Gas also provides around 22% of Australian electricity, and around 45% in South Australia. The dramatic increase in liquefied natural gas (LNG) exports from Queensland has provoked fears of much bigger future price hikes. It has also made it difficult for major industrial users to negotiate reasonably priced new contracts.
‘Many are proposing the obvious, but wrong, solution: develop more gas production resources. But this path fails for several reasons.’
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