This week, 10 small towns around regional Victoria, including Swan Hill, Lakes Entrance and Marong, received the news that their gas company, Solstice Energy, would be cutting them off some time next year because it is no longer profitable to supply them.
Since the news broke, on local radio we heard from householders and businesses expressing incredulity that the gas connection they paid for – in some cases only two or three years ago – was not going to be honoured.
This decision is sudden and shocking, but the writing has been on the wall for a long time. Gas supplies in the Bass Strait, which is where the cheap gas came from, are drying up. Nothing is going to change that.
It’s important to consider this news in its historical context. Ten years ago gas companies started exporting coal seam gas from Queensland, and this exposed everyone on the east coast to international prices, which is why Victoria’s gas prices have tripled in that time.
Those gas exporters are only interested in shipping overseas because that’s where they command the highest prices. They don’t develop new gas fields if they have to sell it to Australians at a fair price. This means that a domestic gas reservation policy won’t provide a silver bullet.
Any other option – importing gas, or building more pipelines – is going to be very expensive. There are no significant onshore gas supplies in Victoria. The bottom line is that gas prices are only going to keep going up.
Regional Victoria is the canary in the coalmine here. As soon as it becomes unprofitable gas companies cut and run, as residents of Robinvale, Swan Hill, Kerang, Nathalia, Marong, Maldon, Heathcote, Terang, Lakes Entrance and Orbost have just found out. This will keep happening.
We can’t leave planning for our future energy needs up to the gas companies. While they are leaving people wondering what they will do to keep their homes warm and the hot water flowing, they are also spending a fortune on advertising and sponsorships spruiking their products and releasing reports full of false solutions like so-called renewable gas. Gas companies are simply trying to keep their profits flowing for as long as possible at the expense of their own customers.
A side-effect of the gas industry’s marketing campaigns is that too many households and businesses aren’t sure what the future will be and aren’t making plans to go electric. This causes stress and panic when people are given only one year’s notice to figure out what they can afford.
So let’s be clear: we all need to plan for life after gas, especially those in regional Victoria. Efficient electric homes are more comfortable, cheaper, healthier, and much better for the climate.
The people of Esperance in Western Australia have already been through this and found themselves much better off, but that didn’t happen by default. They received their gas cut-off notice and the shock that comes with it. The gas company left town but the Western Australian government stepped in to assist. Now residents have electric appliances that they are happy with, and much lower bills.
In Victoria, we are in an even better position to manage this situation well. The real leaders in this area are the many, many local community groups that have been helping each other electrify for years now. This includes the My Efficient Electric Home Facebook group, which contains a wealth of information and assistance.
We already have generous incentives in place through the Victorian Energy Upgrades scheme that can cover all or most of the cost of a new heat pump hot water system and contribute thousands towards switching from gas space heating to reverse cycle. Thousands of households are taking advantage of these every month, which means we have the workforce and supply chains already in place.
Of course, it’s not always easy to find a tradesperson in regional towns. The State Electricity Commission’s one stop shop, which is being rolled out across Victoria right now, helps people understand their options and, crucially, connects them with vetted installers who will offer those large incentives. The Victorian government needs to make sure that they prioritise access to the SEC’s one stop shop to these towns being cut off by their gas company.
But, importantly, we need to make sure that the shift to clean electric energy is not left to the gas companies. Their focus on profit just leaves communities misinformed and unprepared for the inevitable.
Dr Kat Lucas-Healey is a Senior Climate & Energy Advisor for Environment Victoria