NSW gas demand could halve in decade

GAS demand in NSW could halve within a decade despite mining industry claims the state is about to topple over a "gas cliff", University of Melbourne researchers have found.

The Australia Institute-commissioned report, Dash from Gas, also states NSW households and businesses would have to pay the bill if unnecessary gas infrastructure was built on the basis of inflated gas demand projections.

Report co-author Tim Forcey called the effect an industry "death spiral" in which demand falls, customers disconnect and those still hooked to the grid pay exorbitant amounts to pick up the enduring operation and maintenance costs.

"The future of the gas grid in NSW needs to be addressed," Mr Forcey said.

"Electrical appliances for space heating, cooking and hot water can provide the same services as gas, and are more efficient, cleaner, and more economic.

"So whether we can afford having two grids - a gas grid and an electricity grid - needs to be looked at."

The report recommended the removal of subsidies which encourage uneconomic use of gas and expansion of the gas grid, and only maintaining the grid where necessary.

The Australia Institute senior economist Matt Grudnoff said there was no gas shortage in NSW, only a price shock.

"As (the Independent Pricing and Regulatory Tribunal) has confirmed, the gas price rises have been locked in by LNG exports," he said.

"No amount of gas mining in NSW will change that.

"The solution is for the NSW government to assist households and businesses to reduce their exposure to gas, by helping the shift to cleaner, cheaper and more efficient electrical alternatives."


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