#Gas shortage may impact power producers

Electricity generators have revealed they are having trouble finding long-term gas supplies at any price, adding to doubts about the government’s ambitions to use gas as a "transitional fuel" to a low-carbon economy, The Australian reported.
The National Generators Forum fears resource owners could be trying to "warehouse" their reserves for lucrative future export markets instead of offering gas to the domestic market, saying some of its members have been unable to lock in long-term supply contracts.

"These export markets may not proceed for many decades into the future, resulting in a scarcity of supply," the group says in a submission to the government’s draft energy white paper.

"This is a concern as warehousing of gas supplies from domestic market could limit the ability of the sector to utilise gas-fired generators to reduce carbon emissions," says the submission, obtained by The Australian.

The alert comes after mining giant Rio Tinto warned that the official estimates of Australia’s gas reserves are overly optimistic, and said it was struggling to secure supplies in Queensland for 2015 and beyond.

Nationwide, debate rages over whether the longstanding policy in Western Australia of quarantining 15 per cent of new gas export projects for domestic users should be replicated.

Gas-fired power stations operate as intermediate or peaking plants in most states — meaning they are not used for the baseload power that operates around the clock — while in the Northern Territory gas is more important as the NT has ample gas but no local coalfields.

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The Queensland Power and Gas conference will be happening on the 22-23 October 2012. It will discuss investment, planning & strategy for generators, producers, government and investors. For more information, click here.