EnergyAustralia has declared Australia’s “golden age of gas is over”.
EnergyAustralia energy executive Mark Collette broke the news at the Australian Domestic Gas Outlook Conference in Sydney.
“The ubiquitous resource which meant stable prices and constant availability has ended,” Mr Collette said.
“We had a great run; 30 years where no one had to worry about gas. It was plentiful, it was accessible and most important, it was cheap.”
During his presentation Mr Collette attributed geology as one of the key factors, specifically Bass Strait, saying “these older fields were like filling a swimming pool with a fire hose.”
Mr Collette said there’s still lots of gas in the ground, but the cost of its extraction is higher than the older fields.
“Some of the new coal seams seem more like filling the swimming pool with a kid’s water pistol. You can do it – but it’s hard work,” he said.
“Buying gas today is fundamentally different to during the golden age.
“Australia is part of the world market for gas now and it is the cost of new projects across the world that set the contract price for gas – often measured via oil linkages or Henry Hub pricing.
“The Australian gas market is tighter than in the past with less physical redundancy – meaning security of gas supply must now be considered by big buyers in planning their gas needs.”