Oil and gas companies are being invited to bid for exploratory drilling rights across huge swaths of Commonwealth waters off the Victorian coastline as governments race to head off the risk of energy shortfalls hitting homes and businesses.
Less than a day after the Victoria government released its first gas exploration permits in state waters since 2018, federal Resources Minister Madeleine King unveiled five other areas that would be opened for bidding in the Otway Basin.
“Exploration and new discoveries will play an important role in underpinning our energy needs and support Australian industry and households,” King said.
The releases have won support from energy producers and major gas users across the manufacturing sector who say unlocking greater supplies of the fossil fuel is needed to head off shortages and price rises in Victoria and NSW.
Resources Minister Madeleine King.Credit: Alex Ellinghausen
But they have angered conservation groups worried about the impact that more gas drilling will have on the marine environment, and those who fear that increasing gas supplies will make it harder to combat climate change. Gas is a key source of carbon dioxide and methane emissions, which are contributing to dangerous levels of global warming.
“It’s deeply disturbing that while parts of our country are on fire, fuelled by climate heating and burning of fossil fuels, the Albanese government is mindlessly paving the way for new gas drilling,” said Fern Cadman, a campaigner at the Wilderness Society.
“Australia is meant to be on a path transitioning away from fossil fuels, not opening the door to brand-new gas.”
Households across Australia are increasingly switching from gas appliances to electric alternatives, driving forecasts that residential gas demand will fall 30 per cent over the next 10 years. However, that shift is not happening fast enough to offset a supply crunch.
The energy market operator has warned Victoria and NSW are headed for shortfalls by 2029 because old gas fields in the Bass Strait are being rapidly depleted with not enough new gas projects available to replace them.
On Thursday, the federal government said addressing shortfalls was particularly critical for manufacturers that needed gas to for their kilns and furnaces or as a feedstock, and “cannot transition to alternatives in the short to medium term”.
The government is also expected to imminently announce a domestic gas reservation scheme, which would force Queensland gas exporters to hold back a prescribed volume for the local market only.
The new offshore drilling areas announced on Thursday were in deep, wild ocean in a region containing threatened species and whale habitats, Cadman said. “They include geologically unstable deep-water submarine canyon systems, where gas drilling is high risk and a spill would be catastrophic,” she said.