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The government has identified the transition from gas as a key priority. It says home and small business consumption of gas fell by 13.5 per cent between 2022 and 2023, and by another 4.5 per cent in 2024.
However, a recent report on the community consultation undertaken on the gas exploration licences justified the new projects, arguing that “transitioning away from fossil gas requires a coordinated approach to ensure an orderly transition”.
The government has identified transitioning from gas as a priority.
The Australian Energy Market Operator (AEMO) has warned of a looming domestic gas shortfall, with the Albanese government expected to make an announcement within days on a national reserve that would secure supply from exports.
Such a move will be supported by the Victorian government, which in September urged the Commonwealth to intervene, alleging the state’s supplies had been drained after supplying the east coast with gas for decades.
But the risk of ongoing shortfalls, and the fact gas will be used more frequently in electricity generation to supplement gaps in renewables, has also prompted governments to look at other measures to prevent price increases.
Victoria’s exploration licences are the latest example of the state adjusting its rhetoric on gas to acknowledge these issues.
Grattan Institute energy and climate change director Alison Reeve said while Victoria had a road map in place for transitioning from gas, the transition wasn’t happening fast enough compared to the decline of existing gas fields.
“You don’t know how fast the demand is going to decline, particularly because that rate of decline is in some ways in the government’s hands,” she said.
Australian Energy Producers, which lobbies for gas and oil companies, welcomed the decision to release exploration permits and said it was the first release since 2018.
Victorian director Peter Kos said shortfalls could occur as soon as 2027 and said the permits were an essential first step in unlocking new domestic supplies.
“Natural gas from the Bass Strait has reliably powered Victorian homes and industry since the 1960s, but those legacy fields are now in decline. New discoveries are essential to replace that supply and ensure the state’s energy security,” he said.
Kos said the government should commit to regular releases of exploration permits to encourage confidence in investment.
Ursula Alquier was the Victorian coordinator for the Lock the Gate Alliance, who led the successful campaign against fracking and unconventional gas drilling a decade ago.
She said there were only “tight” and unconventional gas reserves in the Seaspray region, and that these could only be accessed by fracking.
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“Coal seam gas, which is present in that area of Gippsland, can only be accessed by fracturing the coal seam. There is no social licence for this to happen in either of these regions.”
The offshore Otway Basin reserve is next to the ecologically sensitive Bay of Islands Coastal Park, and covers an area of 54 square kilometres between Warrnambool and Port Campbell.
Stanley Woodhouse, offshore fossil gas campaigner with Friends of the Earth, said the community response to the government’s consultation on exploration permits had been “swift and damning”.
“Victorians made it clear they do not want new gas exploration and drilling in our delicate ecosystems,” he said.
“Regardless, the Allan government is putting the permits out to tender. Once again Labor has ignored the community and bowed to industry pressure, using the falsehood of the East Coast gas crisis to strong-arm communities into accepting unwanted, unnecessary fossil fuel projects.”
Opposition energy spokesman David Davis said further gas exploration was welcome, but the Victorian government had failed to secure supply over the decade Labor had been in power.
“It is no surprise that after 11 years in government, we’re running short of gas,” he said.
Freja Leonard, methane and fossil fuels campaigner with the Australian Conservation Foundation, said the two communities directly affected by the potential gas exploration sites had both made it clear that they don’t want new gas projects in their areas.
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