Santos CEO Kevin Gallagher likens Victoria to North Korea as debate over the state's gas policy rages
Victoria's handling of gas development has been panned as a major executive compared the state with North Korea when it comes to investment.
Victoria continues to be the most gas-dependent state in the country as the fuel is critical for warming homes and businesses during winter.
However, a green energy focus, depleting offshore gas supplies and historical moratorium banning gas exploration means Victoria faces looming shortfalls and may have to begin importing liquefied natural gas in the coming years.
The dire energy situation plaguing the state sparked concerns amongst business leaders, particularly Santos chief executive Kevin Gallagher who lambasted Victoria's attitude toward investment.
'If I think about Queensland, South Australia, Western Australia – these are very supportive, very development-friendly jurisdictions. Victoria? North Korea. They're different altogether,' Mr Gallagher told an oil and gas conference in Brisbane.
Victoria has historically been a major gas powerhouse and exported the fuel to New South Wales and South Australia.
Low reserves in offshore gas plants and a historical moratorium banning the development of onshore gas, which was lifted in 2022, has led to concerns about the future of gas in the state.
The Australian Competition and Consumer Commission earlier this year warned about winter shortfalls in south-eastern states, while the Australian Energy Market Operator (AEMO) projects shortfalls during peak demand from 2028.
AEMO also forecasted annual supply gaps from 2029.
While some smaller players look for gas onshore, the major players are avoiding this and looking towards more development of offshore gas.
ExxonMobil and Woodside have recently approved a $350m investment to launch new drilling projects in the Bass Strait, while ConocoPhillips will spend more than $100m on drilling two exploration wells in the area.
The Grattan Institute's energy director Tony Wood said Mr Gallagher's comments came in light of Victoria's mixed history with gas.
'I don't think it's true to say that Victoria, both onshore and offshore, is off limits to new gas,' Mr Wood told Sky News on Thursday.
'But you'd have to say, that history has probably coloured that view of Victoria and probably contributed to Kevin Gallagher's comments yesterday.'
He noted the Victorian government's shift back towards gas was a step in the right direction after it ended the moratorium.
'There was too much of a move away from gas,' Mr Wood said.
'The gas wasn't gonna be in the future (but) there's a recognition now from the government to say: 'No, we understand. There is a role for gas here'.
'But you can see why those mixed messages would have influenced a lot of people in the gas industry.'
Mr Gallagher's comment led to immediate backlash from Victorian Treasurer Jaclyn Symes who labelled the attack 'hysterical and unhinged'.
'Victoria has the strongest economic and investment growth of any other state,' Ms Symes told reporters.
'Anybody talking down Victoria is simply anti-Victorian.'
It also faced criticism from Bruce Mountain, the director of the Victoria Energy Policy Centre, who noted industry had historically avoided some sources of gas.
'It's a bit of a cheap shot,' Mr Mountain told SkyNews.com.au.
'Victoria potentially has coal seam gas, but that's not been attractive to the Victorian people and consistently over time, both political parties have shied clear of it after having clearly experienced the opposition from the Victorian community and landholders.'
Mr Mountain noted the lack of onshore gas in Victoria was a factor behind major companies avoiding looking into the areas.
'You can prospect for gas and there has long been a conventional gas programme and the Andrews government authorised it several years ago, but there's no evidence of any sizable conventional gas resource onshore in Victoria,' he said.
'There's nothing stopping Santos or others from seeking that resource and they haven't been stopped from it for several years.
'So I don't know what the specific issue is that he has.'
Victoria banned new gas connections for homes and businesses from late 2024 in a bid to phase out the fossil fuel.
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