Australia faces a gas supply crisis in southeast regions

Australia is one of the largest exporters of gas in the world. However, there is a growing concern about gas supplies running low in New South Wales, Victoria, South Australia, and Tasmania. This could lead to shortages and higher energy costs for consumers. Curtis Island in Queensland has three major facilities that cool natural gas to turn it into a liquid for export. In 2022, Australia earned nearly $70 billion from selling liquefied natural gas to countries like Japan and China. Despite this success, many Australians now face potential gas shortages, especially next winter. The Australian Energy Market Operator warned that the southeastern regions may face a gas crisis within three years. Supplies from the Bass Strait, which traditionally provided gas for heating and cooking, are declining. Meanwhile, transferring gas from Queensland to southern states is difficult due to limited pipeline capacity. In response, energy ministers are exploring the creation of import terminals to bring additional gas to areas facing shortages. These terminals could bring in gas from other Australian states or international sources. However, some experts believe that domestic production could still suffice if infrastructure is improved. As Australia shifts towards electric alternatives for heating and cooking, gas usage is declining. The Energy Market Operator noted that reduced demand helped postpone warnings about gas shortfalls. However, the need for more gas supplies remains critical as production is declining faster than demand. Several projects for importing gas are in progress, including terminals in NSW and Victoria. Yet, some in the industry argue that relying on imports could expose consumers to volatile prices. Instead, expanding existing infrastructure and storage solutions could help address the supply issue. As the risk of gas shortages grows, the federal government has signed a new deal to supply more gas to the domestic market. Tensions remain between parties over energy policies and the path forward. The situation calls for urgent discussions to secure gas supplies for the future.