PIAC Gas Masterclass A government perspective Adrian Amey Manager - PowerPoint PPT Presentation

PIAC Gas Masterclass A government perspective Adrian Amey – Manager Supply & Networks Policy – 15 April 2014

Understanding national energy policy § Energy is primarily a State & Territory policy responsibility § National energy policy is set by agreement of all jurisdictions - opt in and opt out provisions do exist § Legislation is passed by SA Parliament then adopted by other States & Territories § The Commonwealth Government only has legislative control over offshore resources and international trade § Australian Constitution & CoAG agreements protect “free and fair trade of gas” across borders

Who owns the gas § Resources including gas belong to the jurisdiction they are found in – Cooper Basin gas belongs to SA – Gippsland Basin gas belongs to VIC – Bowen Basin gas belongs to QLD § Companies pay royalties to States and Territories for the resources they recover & sell § Governments cannot prevent gas passing through them to another State or Territory

2013 - South East Australia Gas System Main production § facilities in Queensland, South Australia and Victoria

Eastern Australia Total Gas Demand 2013 GSOO

Eastern Australia Growth in Production 2013 GSOO

Basic statistics Unit Conversion Joules 1 giga joule = 1000 mega joules = 1,000,000,000 joules 1 tera joule = 1000 giga joules = 1,000,000,000,000 joules 1 peta joule = 1000 tera joules = 1,000,000,000,000,000 joules 1 peta joule = 910 million cubic feet = 1,000,000,000,000,000 joules § Total NSW Consumption was 162 peta joules in 2012 – 13 § Average NSW household uses 23 giga joules per year § Total NSW Residential Consumption is 25 peta joules per year § Residential consumption only 15% of total with approx 1 Million customers

Gas Production and Consumption by State in 2012 - 13 450.0 406 400.0 350.0 300.0 Peta Joules (PJ) 250.0 205 205 200.0 162 134 150.0 103 74 100.0 50.0 19 5 0 - NSW + ACT VIC QLD SA TAS Production Consumption • Consumption (ex Qld) 489 peta joules • Production (ex Qld & SA) 411 peta joules • Shortfall (if all Qld & SA gas goes to LNG) 78 peta joules

No NSW CSG No NSW CSG – gas § flows to Qld

NSW in 2018 – No New CSG 2013 GSOO

NSW CSG NSW CSG – gas § flows to both NSW & Qld

NSW Gas Supply 2018 – AGL & Moomba 2013 GSOO

NSW Gas Supply 2018 – CSG 2013 GSOO

The Future of Gas § East coast gas demand to increase threefold by 2018. § LNG export is driving demand growth – international contracts replacing domestic contracts. § Over $60b invested into Eastern Australia LNG facilities & CSG resources. § Queensland has committed to development and is seeing significant economic benefits. § NSW doesn’t have any production to reserve and other States have stated they will not intervene in the market to direct gas to NSW. § Declining existing resources and limited production in Victoria. § Significant risk of under supply to NSW economy & residential consumers. § Consequential risk to higher wholesale gas prices flowing through to retail gas and electricity prices.