Australia wins promise of more gas from energy majors

Bloomberg

Oil and gas executives have pledged to boost gas domestic gas production in Australia as Prime Minister Malcolm Turnbull seeks to bridge a supply shortfall threatening the nation’s energy security.
The commitments by companies including Royal Dutch Shell Plc, ExxonMobil Corp. and Total SA will mean Australia avoids a projected shortfall of gas-powered electricity generation in the summer of 2018-19.
“We are a massive gas exporter and it is utterly untenable, unacceptable for us to be in a position where domestic gas consumers cannot have access to affordable gas,” Turnbull said in a Canberra press conference.
Turnbull convened the meeting with energy executives Wednesday to ease mounting concerns over the country’s energy security and costs as a breakaway plan by one blackout-plagued state further threatens to challenge any nationwide fix.
The state government of South Australia announced plans to break away from a national electricity grid and assume control of its own generators when extra supplies are needed.
Gas prices for some customers across Australia’s patchwork power markets have surged as exports to buyers including Japan, Korea and China rise while drilling bans in several states limit supply. A series of blackouts in South Australia have stoked fears of more widespread outages across the nation and raised questions as to why one of the world’s largest producers of coal and gas is struggling to keep the state’s lights on.
“Government and industry recognize the need to work for secure and competitive energy markets that bring forward gas supplies and help to lower emissions,” Turnbull said in a statement. “The only sustainable way to guarantee affordable gas reserves is through the responsible development of our gas.”
Turnbull’s Liberal-National coalition government, an advocate of higher gas production and technology that reduces emissions from coal, blamed outages in South Australia, ruled by the Labor party, on the rapid uptake of renewable energy. Federal Energy Minister Josh Frydenberg said South Australia’s plan was “nonsense,” with the government seeking legal advice if the move was in breach of national electricity market rules.
The growing divide between state and federal governments over energy security is worsening angst among Australian companies over rising energy bills.