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1 June 2015

East coast faces 20 per cent gas shortfall



he east coast of Australia faces a shortage of almost 20 per cent of its gas demand, according to research by independent advisory EnergyQuest.

A shortfall by 2019 of 133 petajoules of gas challenges the latest findings by the Australian Energy Market Operator. In a report in April, the energy regulator revised its previous claims of a gas shortage.

EnergyQuest chief executive Dr Graeme Bethune took a swipe at the Australian energy regulator for its revision.

"Federal and state governments have internationally respected geoscience agencies, but there is little sign that this expertise has been called upon by [the Australian Energy Market Operator]," Dr Bethune said.

He said its analysis should focus on "ongoing gas market risks, rather than assuming them away".

The EnergyQuest analysis said that the Australian energy regulator had underestimated the demand for Queensland's LNG projects while overestimating the production from the Cooper Basin.

Claims of a looming gas supply crisis have been repeated by federal and state politicians as a reason to encourage the industry's development.

Federal industry minister Ian Macfarlane has criticised the NSW and Victorian governments for not encouraging local gas industries.

Manufacturing Australia has argued the gas supply crisis could cost tens of thousands of local manufacturing jobs.

The Australian Energy Market Operator stood by its April analysis, which has been criticised by energy suppliers such as Senex Energy and Metgasco.

"AEMO followed a rigorous consultation process to ensure the most up-to-date information was available in its 2015 gas statement of opportunities; AEMO continues to monitor the market closely," its spokesperson said.

The Australian energy regulator's outlook in April said that gas consumption in NSW would fall by 17 per cent by 2019. It said there would no longer be a gas shortage.

Mr Bethune said the differing views demonstrated how sensitive forecasts were to demand and supply assumptions.

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