Australia: APPEA Submission Highlights Cost of Curtailing Gas Expansion

Developing a strong NSW gas industry will reduce energy price hikes, and lower greenhouse gas emissions, according to an ACIL Tasman study presented to the NSW Government today.

The report: Economic significance of coal seam gas in New South Wales was commissioned by the Australian Petroleum Production & Exploration Association (APPEA) and included in APPEA’s submission to the NSW Legislative Council Coal Seam Gas (CSG) Inquiry.

The ACIL Tasman study shows that unless NSW commercialises its gas resources:

• Wholesale gas prices across NSW, Victoria, South Australia and Tasmania will rise between 20% and 25% (in real terms) by 2030;

• Electricity prices will rise in all regions of Eastern Australia and NSW wholesale prices will rise on average 7.4% over the period 2020 to 2030;

• Coal-fired power will be used more, and gas-fired power will be used less, with CO2 emissions from electricity generation being 4 million tonnes per year higher by 2030 as a result; and,

• NSW real income will be $15.5 billion lower in total over the period to 2034–35 (or $5.1 billion lower in net present value terms).

APPEA’s Chief Operating Officer for Eastern Australia, Rick Wilkinson, said: “This report shows CSG can be an economic and environmental game-changer for NSW. A strong CSG industry makes it possible for NSW to meet growing energy demand while maintaining economic growth and incorporating a strategy to curb greenhouse gas emissions.

“NSW has significant natural gas potential resources, yet gas is used to generate less than 5 per cent of the state’s electricity. And of the gas used in NSW, about 95 per cent is imported from other states.

“This report shows that as energy demand increases in the coming decades, a continued dependence upon coal and imported gas will have significant economic and environmental impacts.

“The economic impact of Queensland’s CSG industry is well understood. It has already created more than 8,500 jobs, it supplies one third of Eastern Australia’s natural gas, and it is set to contribute $850 million per year in State Government taxes.

“The recent NSW State Budget highlighted that CSG is the type of new industry that NSW needs and can readily achieve”.

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Source: APPEA, September 14, 2011;