Australia’s long-life gas networks are critical in delivering convenient and reliable energy for more than 4.3 million households and 133,000 businesses over more than 88,000 km of pipelines. Yet, they face a range of challenges in the form of wholesale gas markets, government intervention, distorting appliance subsidies and changing industrial demand profiles.
Some commentators have used limited analysis to conclude that these forces, combined with increasing competition in appliance markets, have created the potential for gas infrastructure to be rendered obsolete.
There is strong evidence to the contrary, including the role of falling network cost drivers in offsetting wholesale price increases in some jurisdictions. Simplistic projections can also ignore the benefits of a dual fuel network, including reducing the high cost of peak electrical demand and the reduction in greenhouse gas emissions that is supported by gas consumption.
While rational debates are welcome, the long-term interest of consumers are not well served by policy settings or negative commentary, which artificially drive down gas consumption and push up average prices. Consumers are at risk if subsidy schemes continue to exclude the emission benefits of gas appliances or if commentators urge customers to “get out of gas” by overhyping the impact of wholesale prices.