What's behind Australia's gas supply fears

THE AUSTRALIAN ENERGY MARKET OPERATOR'S WORRIES ABOUT GAS

AEMO, which operates Australia's largest gas and electricity markets, is warning of a shortfall in gas-powered electricity in NSW, Victoria, South Australia and Queensland from the summer of 2018/19 onwards.

* WHY THE WORRY?

- AEMO's 2017 Gas Statement of Opportunities report says gas production is forecast to fall by 122 petajoules by 2021.

- Homes, businesses and industrial gas customers won't have enough electricity unless extra gas is produced to fuel gas-powered generation (GPG).

- GPG is relied on to produce power when wind and solar generation is unavailable.

- If there's not enough GPG, there's a risk of power cuts.

* WHEN WILL THE GAS SHORTFALLS START?

- SA: 2019-24

- NSW: 2019-24

- Vic: 2021

- QLD: 2030-36

* WHY THE SHORTFALLS?

- AEMO says a reliable supply of gas for GPG is critical to maintain reliable electricity supply at a time when coal-fired generation is reducing.

- But there's increasing demand for Australian liquefied natural gas exports, while production from existing gas fields is falling and power demand rising.

- The rate of exploration and development of oil and gas wells in Australia has nearly halved.

* WHAT AEMO WANTS

- A national plan for gas field development to maintain domestic energy supply.

- Alternatively, rapid implementation of alternative non-gas electricity generation sources.

- An increase in coal-fired generation and renewable energy output could help meet energy shortfalls in the short term.

- Greater use of technologies such as battery storage.

- Consider getting LNG exporters to redirect a small portion of their gas production to the domestic market.

- Consider incentives for gas producers to increase production from existing gas fields.

- Investment in exploration and development programs.

- Expand Victoria's South West Pipeline to help more gas move from Longford to Iona Underground Storage.

- Boost supplies from NT gas fields.

* GOVERNMENT RESPONSE

- Prime Minister Malcolm Turnbull to meet with east coast gas company bosses to address the "energy crisis".

- He blames state governments for not allowing the development of onshore gas exploration and development.