The role of gas
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2.2%
Forecast natural gas demand increase each year to 2033
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2026
New gas infrastructure needed by 2026 to meet demand
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2028
Forecast gap in east coast gas supply will increase from 2028
MYTH
Australia doesn't need more gas or gas projects.FACT
In December 2023, the independent Australian Energy Market Operator's (AEMO) gas statement of opportunities forecast demand for natural gas would increase by an average of 2.2% each year from 2024 to 2033. At the same time, the current supply trajectory suggests an almost 1% decline on average over the same period1.
A separate report from AEMO in March 2024 was similarly cautionary, forecasting a future deficit in gas supply, beginning with Australia’s southern states in 2028. The report also found an urgent need for new investment, particularly in infrastructure, by 2026 if shortages are to be avoided and gas supply is to meet demand for electricity generation2.
Federal Energy Minister Chris Bowen believes Australia has no choice but to explore new gas supply opportunities, saying in May 2024, "with current supplies of gas dwindling, new supply will be needed – even as we electrify at pace"3.
The same month, the Australian Government released its Future Gas Strategy, its plan for the role gas will play in transitioning the economy to net zero. The strategy makes clear: "New sources of gas supply are needed to meet demand during the economy-wide transition"4.
The Australian Energy Regulator’s quarterly report on gas disconnections highlights Australians’ growing demand for gas. The report showed Jemena Gas in NSW saw a rise of 2.3% in under two years, while AGN, Ausnet and Multinet in Victoria added 38,000 connections and AGN in SA added 90005. The ACT was the only Australian jurisdiction to see a drop in connections late in 2023.
In July 2024, the International Atomic Energy Agency’s ‘Gas market report, Q3 2024’ forecast global demand for natural gas to increase by 2.4% in the same year6.
The same month, the Australian Competition & Consumer Competition released a report into the east coast gas market. The report found, “Gas shortfalls are projected to emerge from 2027 unless new sources of supply are made available7.”
The messages are clear. Gas projects are central to helping secure Australia’s energy future and the country’s commitment to net zero.
* www.aemo.com.au/-/media/files/gas/national_planning_and_forecasting/wa_gsoo/2023/2023-wa-gas-statement-of-opportunities-wa-gsoo.pdf?la=en.
1 www.aemo.com.au/newsroom/media-release/demand-for-gas-to-exceed-supply-in-wa-domestic-market-over-next-decade.
2 aemo.com.au/en/newsroom/media-release/gas-market-outlook-signals-need-for-new-investment.
3 www.minister.dcceew.gov.au/bowen/speeches/speech-energy-users-association-australia.
4 www.industry.gov.au/publications/future-gas-strategy.
5 www.aer.gov.au/publications/reports/performance/gas-quarterly-disconnection-reporting.
6 www.iea.org/reports/gas-market-report-q3-2024.
7 www.accc.gov.au/system/files/gas-inquiry-june-interim-gas-inquiry-report_1.pdf.