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Issued: 3 June 2022
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Weekly science news from the Australian Science Media Centre

Out of gas? East coast prices skyrocket threatening jobs and consumers

By Dr Joe Milton, the Australian Science Media Centre
An international shortage of fossil fuels caused by the war in Ukraine has led to huge increases in gas prices for businesses and consumers around the world.

Australia's east coast has been hit particularly hard, with costs tripling or even quadrupling in a single month, prompting the Australian Energy Market Operator to trigger the Gas Supply Guarantee Mechanism, which calls for the market to release supply and come up with a plan to address a potential shortfall.

Professor Ariel Liebman from the Monash Energy Institute told the AusSMC that gas prices are "hyper-sensitive to external changes in supply like the Russia-Ukraine conflict.". 

And Curtin University's Dr Roberto Aguilera explained that "gas markets around the world are interconnected, so when supply declines in one region, prices tend to rise everywhere."

So, why have prices risen faster and further in eastern Australia than in other parts of the world, or even the country?

"[The Ukraine conflict] together with a cold snap and significant unexpected electricity outages have combined into a perfect storm, pushing many small innovative electricity retailers to the wall or even bankruptcy, increasing the cost of generating electricity and resulting in stark rises in gas and energy prices," said Prof Liebman.

Dr Aguilera told the Centre that these coal production outages would normally be covered by using locally-produced gas, "but it’s in short supply as much of it is contracted for export to Asia".

Prof Liebman said this failure to reserve Aussie gas for local markets was contributing to the problem: "We have huge amounts of coal seam gas which was allowed to be exported with none reserved for Australia, which has ultimately led to a situation where Australians are paying for gas prices at global parity."

So, are the war in Ukraine, the cold weather and the unexpected outages the only reasons Aussie gas prices have skyrocketed recently?

Professor Samantha Hepburn from Deakin Law School told the Centre the crisis is not only due to recent global and local pressures, but has been "percolating over many years". 

"Since 2015, when the three large LNG producers commenced in Gladstone, gas prices have tripled," she said. "This is unsurprising given that 85% of this gas is exported overseas."

In terms of solutions, Dr Aguilera said short-term fixes are scarce: "Despite the rapid growth of renewables, they are not ready today to capture the market share of gas and coal," he said.

And Prof Hepburn was sceptical about the Domestic Gas Pricing Mechanism, which she said is the only legislative measure that exists to deal with this. "[It] has never been triggered and appears to be little more than a rhetorical flourish," she said. "This is completely unsatisfactory."

Associate Professor Behzad Fatahi from UTS suggested Australia should prepare for the future by building more versatile large energy storage facilities: "For example," he said, "building versatile large LNG storage facilities can help to meet the current demand and may also be used in future for storage of other types of energy such as hydrogen or ammonia as a hydrogen carrier."

Prof Liebman offered one immediate solution: "Pull the so-called ‘gas trigger’ to requisition supplies of gas intended for export," he suggested, adding that the government should seriously consider a "full gas reservation policy for the entire country, similar to the one in Western Australia and the United States”.

So, could anything have been done to prevent this crisis? Prof Liebman told the Centre he believes it could have been avoided:

"This would all have been preventable if successive governments had paid proper attention to rigorous monitoring and regulation of all the key energy markets in Australia," he said. "This is a policy failure a long time in the making and it will be very hard to remedy it quickly."

You can read the Expert Reaction in full here
This article originally appeared in Science Deadline, a weekly newsletter from the AusSMC. You are free to republish this story, in full, with appropriate credit. 

QUOTE OF THE WEEK

"The answer blew us away - there was just one! That's it, just one plant has expanded over 180km in Shark Bay, making it the largest known plant on Earth." 

Jane Edgeloe from the University of Western Australia discusses her team's discovery of the world's largest plant - a seagrass roughly three times the size of Manhattan - off the coast of WA.

NEW FROM THE SMCs

Expert Reactions and Briefings

AusSMC Expert Reaction: Australia's gas crisis

SMC NZ Expert Reaction: Modelling NZ’s next Omicron wave

SMC NZ Expert Reaction: Taxing sugary drinks packs a punch on sales

UK SMC Expert Reaction: Observational study on road traffic noise pollution at school and children’s cognition

UK SMC Expert Reaction: Conference presentation on alcohol consumption in older surgery patients and quality of life

UK SMC Expert Reaction: Latest ONS data on prevalence of ongoing symptoms following COVID-19 infection in the UK: 1 June 2022

UK SMC Expert Reaction: Latest case numbers of monkeypox reported in the UK and guidance to control community transmission, as published by UKHSA

UK SMC Expert Reaction: Study looking at sweetened and unsweetened coffee consumption and mortality

RESEARCH HIGHLIGHTS

'Fuel of evolution' more abundant than previously thought in wild animals  (Science)
The raw material for evolution is much more abundant in wild animals than we previously believed, according to new research from The Australian National University (ANU). News for:  Australia; International; ACT.
Example coverage: Brisbane Times - Evolution could be happening four times faster than we thought, research finds

Two thirds of Aussies think COVID-19 lockdowns were 'just right' (Australian Journal of Social Issues)
Two-thirds of Australians view the severity of the state government-imposed as “about right”, although not surprisingly, Victorians were the most likely to view the lockdowns as too restrictive, according to Aussie survey data. Men tended to be more concerned than women about the economy over health, with men also more likely than women to perceive the lockdowns as too restrictive. Politically, those with conservative political leanings were more likely to view lockdowns as “too restrictive”. Tasmanian specific data also showed that people who prioritised the economy over health were less likely to wear masks in public, check-in, be tested in case they have to self-isolate, and less likely to be vaccinated.  News for:  Australia; TAS. 
Example coverage: Daily Mail - Astonishing number of Australians believe crippling Covid lockdowns were 'just right' - even though we had some of the longest lockdowns in the world


First report of 'sex reversal' in live-bearing lizards (Proceedings of the Royal Society B)
Aussie researchers have described the first report of sex reversal in a live-bearing reptile. A combination of temperature and sex chromosomes can lead to ‘sex reversal’ in reptiles, where the animal is genetically one sex but physically the other. Previous research had only ever observed sex reversal in egg-laying reptiles, but the team combined long-term datasets with experimental manipulations and found sex reversal in the Aussie spotted snow skink. These results are key to understanding sex and genetic evolution across vertebrates, the researchers say.   News for:  Australia; TAS; ACT.  
Example coverage: IFLS - These Non-Egg-Laying Lizards Can Switch Their Sex From Female To Male In The Womb

World's oldest and largest known plant found in WA (Proceedings of the Royal Society B)
The largest known plant on Earth has been discovered in Shark Bay in Western Australia - and it's at least 4,500 years old.The ancient and incredibly resilient seagrass stretching across 180km was located by researchers from The University of Western Australia and Flinders University. News for:  Australia; International; SA; WA
Example coverage: ABC - World's largest plant discovered right under our noses in Western Australia

AusSMC ON THE AIRWAVES

This week, we joined 5AU/5CS to chat about stereotypically boring people, and tonight we'll join Andy Park on ABC Radio National Drive to chat about SIDs research, the world's biggest plant, and giraffes' headbutt battles.
The Australian Science Media Centre (AusSMC) works to enhance the media’s coverage of science, for the benefit of all Australians. We provide the evidence and experts when science hits the headlines and administer the breaking science news portal for Australia and New Zealand – Scimex.org. As an independent, not-for-profit organisation, financial support is crucial to ensure this important work can continue. For a full list of current supporters visit our website.

Disclaimer: Please note that any views expressed are the personal opinions of the experts named. They do not represent the views of the AusSMC or any other organisation unless specifically stated. The AusSMC attempts to provide a range of views from the scientific community.
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