What’s at stake?
November 30th, 2016
In a State comfortable and familiar with the resources industry, a lack of exploration drilling in Western Australia is concerning former petroleum executive director at WA’s Department of Mines and Petroleum, Bill Tinapple.
Mr Tinapple firmly believes drilling bans (in states outside of Western Australia), weak commodity prices, regulatory hurdles and stretched balance sheets are collectively impacting on exploration.
“Without exploration to cover future growth and to replace gas that is utilised, shortages may be severe,” Mr Tinapple said.
Mr Tinapple’s concern should serve as a warning to us all. Without exploration, and the discoveries that follow, we face a natural gas supply shortage.
Spending on both onshore and offshore exploration has fallen by almost two thirds over the past two years, according to the Australian Petroleum Production and Exploration Association, which says exploration drilling offshore is at its lowest in almost 20 years, while onshore drilling is at its lowest for 15 years.
APPEA Chief Executive Malcolm Roberts said: “There’s every good reason to be concerned, given you can count the number of offshore wells on one hand. It’s not a sustainable position for the industry.”
While this may appear to be just an issue for industry, the real concern is what it will mean for households in the future. If natural gas isn’t as readily available to us in the future, as basic economics dictate, demand will rise and the price along with it.
And while the introduction of renewables and batteries storage systems in the electricity network have the capacity to reduce the load on the network, people will still rely on natural gas as a form of energy.
As former Federal Resources Minister Martin Ferguson outlined recently, the more renewables that are integrated into the network, the greater the reliance on natural gas becomes.
“When the wind isn’t blowing and the sun isn’t shining, another source of power is needed,” said Hon. Ferguson.
“Without gas, renewables cannot provide energy security, nor can they deliver on their potential for emissions reduction. Gas will remain essential for many years to come.”
As we have outlined before, the need to unlock new development is essential to ensuring a secure and reliable energy future for all.