WA’s Gas Shortage Crisis: A Balancing Act for the State’s Energy Future
Western Australia (WA), a resource-rich state in Australia, is currently facing a peculiar situation – a shortage of gas. While the issue is not about the availability of gas resources in the ground, it revolves around how much can be produced and supplied to meet the growing demand in the local market.
As with any supply and demand challenge, there are two potential solutions: reducing gas usage or increasing gas production. Major resource companies and the state government have leaned towards the latter option, emphasizing the importance of gas as a transitional fuel in the shift from a coal-dependent energy grid to one predominantly powered by renewables.
However, this push for increased gas production comes at a time when climate scientists are issuing urgent warnings about the imminent risks posed by climate change and highlighting the need to halt the development of new fossil fuel projects, including gas.
While closing coal plants can contribute to lowering emissions, WA still has much work to do in reducing its overall carbon footprint compared to other states. This raises the question of whether curtailing gas usage is a realistic option for WA or if the state will remain reliant on this valuable resource for some time to come.
Last year, the independent Australian Energy Market Operator issued a significant warning about WA’s gas problem, projecting a manageable supply gap between 2023 and 2026, but a much larger shortfall in the following decade. Various factors contribute to these challenges, including the government’s plan to close all coal-fired power plants by the end of the decade and the substantial changes needed in the energy grid to meet the growing demand from industries.
Addressing an industry forum, representatives from two of Australia’s biggest gas companies advocated for increased gas production as the solution. Woodside’s head of Australian operations, Liz Westcott, specifically highlighted the company’s Scarborough gas project off the Burrup Peninsula, warning that any delays could exacerbate the existing gas shortage.
Chevron, a competitor to Woodside, echoed a similar sentiment, emphasizing the importance of investing in existing facilities to enhance the state’s energy security. Chevron Australia’s Director of Operations, Danny Woodall, expressed the need for a balanced energy transition that considers reliable and affordable energy alongside the benefits of clean power.
The state government largely aligns with this perspective. WA’s major energy grid, the South-West Interconnected System, is expected to triple in size in the coming years as industries transition towards greater electrification. Consequently, the state’s gas generation capacity will also need to more than double to keep up with the rising demand.
However, environmental scientist Peter Newman holds a contrasting view, arguing against any increase in gas usage. Instead, he emphasizes the need to transform WA’s energy grid from dumb and dirty to smart and clean. Professor Newman highlights the abundance of solar and wind resources available in the state and suggests implementing smart storage systems to optimize energy utilization.
While the government is investing billions of dollars in batteries for energy storage, their capacity is limited and can only boost the grid for short periods. Energy Minister Bill Johnston acknowledges the importance of renewable energy in WA’s power supply, projected to account for about 80% in the coming years. However, he believes the remaining 20% will still require gas, as renewables currently lack the reliability needed to ensure a stable grid.
Professor Newman strongly disagrees with this perspective, criticizing it as old thinking. He advocates for a transition away from gas and emphasizes the necessity of pursuing better alternatives. According to him, the government’s current approach of yielding to the gas lobby and promoting increased gas production is no longer acceptable. He asserts the need to eliminate gas from the energy mix and embrace more sustainable and cost-effective solutions.
The gas shortage crisis in WA presents a complex challenge for the state’s energy future. While the government and major resource companies highlight the importance of gas as a transitional fuel, environmental experts argue for a swift shift to cleaner and smarter energy systems. Finding a balance between reliable energy supply, affordability, and environmental sustainability will be crucial in determining how WA navigates its energy landscape in the coming years.
