The Australian state of New South Wales has decided to reactivate gas exploration after ten years, opening two new areas in the west of its territory to search gas natural. The decision comes in response to growing concerns about security of supply on Australia’s east coast, where shortages are expected towards the end of the decade.
The government stated that this measure is to guarantee a reliable energy grid stable and robust in the coming decades. They point out that gas remains important for heating, manufacturing, and electricity, and that current global conflicts (such as the war in Ukraine) have made securing local supply more urgent.
However, recent data shows that the use of gas to generate electricity has fallen to its lowest level in 20 years in Australia.
Tariff reductions and divided reactions
To encourage companies to explore, the New South Wales government has lowered the cost of permit applications 50,000 Australian dollars for only 1,000, from about $35,800 to approximately $715. That’s a huge discount, aimed at enabling many small businesses to participate.
On the other hand, the reactivation of gas exploration has generated a division in the sector. Business associations and the Australian Energy Producers lobby group support this action plan. So does the BlueScope steel mill(a large gas consumer) demands more gas and lower prices to be competitive and reduce emissions.
However, environmental and agricultural groups have expressed concern. The NSW Farmers Association criticized the government for not explaining how it will prevent speculators with no resources and no regard for biosecurity or water risks from arriving. They clarified, however, that they are not against development, but rather against mismanagement.
Prospects for gas exploration in Australia
New South Wales is not the only state moving in this direction; other states such as Queensland and Victoria are also offering new areas for oil and gas exploration Queensland already has a large coalseed gas industry, and Victoria, which had banned fracking, is now offering five offshore permits.
This announcement reflects how Australia seeks to balance its objectives of energy transition with the need to guarantee supply. In this scenario, the challenge will be to manage the development of new resources without neglecting environmental and social impacts, in a context where industrial demand and the stability of the energy system remain priorities.
Source: Reuters