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Tennant Reed
@TennantReed
“The guy with the glasses who does all the electricity.” Melbourne-based policy wonk with Ai Group. Climate, energy, environment. Occasional bonus nerdery.
Melbourne, VictoriaJoined September 2016

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Victoria’s new-look SEC could sell power direct to homes and businesses - The Age (this story describes this possibility as the first time in decades that Victorians might buy power from a public entity. Could have mentioned Feds’ Snowy-owned retailers!)
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Gas producers are currently up in arms about the implications of the Mandatory Gas Code of Conduct for new investment. Personally I think that's wildly overblown. But assuming ordinary levels of investment enthusiasm, gas development can still take many years.
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3b: how long will it take for Vic onshore conventional gas to be a thing? It could be a while. The legal/regulatory side is in place (though specific permitting then needs to happen). Commercial exploration can take a while, then development of specific wells
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So plausibly-but-with-lots-of-uncertainty-either-way, Vic onshore conventional gas could supply maybe 9% of current Vic demand or 0.9% of Eastern demand (but more as demand falls). Judgment: enough for people to argue about; interesting for an offtaker or two; not transformative
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(Aust & Vic gas demand will fall from current levels; AEMO's central Step Change scenario has a modest decline to 1,787/135PJ by 2040, but if we're actually on track to net zero emissions by 2050/45 gas demand will fall much further)
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How much gas would 470+77PJ be if it's there and commercial? If *all* produced over 30 years (brisk!), that's 18 PJ/yr. Interconnected East Coast market is ~2,000PJ/yr today, of which ~1,400PJ is exports. Vic demand is ~200PJ/yr today.
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Those are resource estimates based on a bunch of analysis of existing rock cores and other data. But nobody has gone to the prospective areas, drilled for gas, found it, and established characteristics for commerciality. All possible and doable, not yet done.
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3a - how much onshore conventional gas is there? Nobody knows for sure! but the major geoscience effort to date (earthresources.vic.gov.au/projects/victo) produced a medium estimate (50% chance of underestimate) of 470 petajoules in the Otway Basin and 77PJ in the Gippsland Basin.
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3. Onshore conventional gas development was banned for several years, but the ban was lifted in 2020 and regs to guide new exploration & development commenced in late 2021. However! a) there may not be all that much of this gas; b) getting going may take a while
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2. Conventional offshore gas production is not banned and is Vic's dominant current source. There are some new investment prospects but overall offshore output seems doomed to fairly rapid decline - we've got most of the gettable gas
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Quick note about Vic gas production prospects, because the topic keeps coming up in debates about East Australian gas: 1. Unconventional gas production is banned and support for that seems absolutely bipartisan (it's in the State Constitution! though Parliament can change that)
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The price levels against which commerciality of new gas projects are tested by proponents suggest there’s pleeeeeeeeenty of scope for development far short of recent price levels
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Stray observations: The idea that ACCC-administered Mandatory Code price provision will not give due regard to the risk profile and return needs of gas exploration and development is hard to credit, given the depth of their engagement with supply issues here
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Demand projections include a chunk of electrification as per AEMO Step Change. Policy to achieve this is not yet in place; but also the rate of gas transition in Step Change is well short of emissions targets. ACCC has no demand side ideas to offer, alas (not really their job)
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Shortfall risk may be overstated because: * main projection doesn’t include LNG imports, but a terminal is being built & will be there if there’s demand (there is not much demand now) * there are lots of local supply options that could go ahead * demand side is underdone
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Welcome Anthea Harris - our new CEO. Anthea has extensive experience in the energy sector, most recently as CEO of the Energy Security Board. We’re excited to have her on board as we continue to ensure energy consumers are better off now & in the future. bit.ly/3Xmz0MG
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SGM can shape the management of fossil Scope 1 while those industries last; and investment and management by industries with a long term future. Both are very important and details worth arguing about! But emissions overseas will be overwhelmingly determined by policies overseas.
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Boring perspective: a lot of Safeguard fights are about future of coal and gas exports, but these are not actually at stake in this policy. - in medium term those exports are highly profitable with or without SGM - in long term customer commitments mean those exports are toast
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13yo asked what I meant when I said I’d been doing some over-complicated spreadsheeting. So I told them. “I’m sorry I asked!” was the verdict
Blunder Princess Bride You Fool GIF
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This specific worry about Code unpicking existing contracts should be able to be dispelled - my understanding from DCCEEW & Tsy is there’s no retrospectivity intended, as per the emergency cap. Hopefully someone can underline that on the record!
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Renewing my periodic proposal to fix Australia Day contro by moving it to 26 September, the anniversary of Australia II’s victory in the 1983 America’s Cup. involves boats involves criminals (Bondie) pleases nostalgic oldies (like me) only US yachtsmen dispossessed
Auspol Bob Hawke GIF
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⁩ has key takeouts from the latest ⁦⁩ report on energy markets in the last quarter of 2022. Power prices & futures down, renewables integration advancing. Gas prices eased a bit (🧊contracting not in focus here)
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