Australia exported most of its natural gas as citizens dealt with prolonged power outages

Australia exported most of its natural gas as citizens dealt with prolonged power outages

July 12, 2017 by Chris White, 1 Comment

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Australia’s electricity shortages should be a warning sign to the U.S. to avoid relying too heavily on green energy sources like wind and solar while mass exporting natural gas, according to a Monday report from The Wall Street Journal.
Australia’s energy providers’ failure to adequately fill a vacuum left by retired coal plants is making it difficult for them to provide enough energy for the country’s citizens during hot summer months. One company shipped out hundreds of thousands of tons of liquefied natural gas (LNG) during the middle of a blackout that cut power to tens of thousands of homes, the report noted.
Several ships left Gladstone, Australia, shipping 314,000 tons of LNG while a blackout shut off the power to 90,000 homes in the city of Adelaide. That’s enough natural gas to generate electricity for roughly 750,000 Australian homes for a year, according to data from the Australian Bureau of Statistics.
Australia cut back on coal as companies began increasing natural gas exports. The country’s coal production placed it among the world’s biggest greenhouse-gas emitters per capita – Australia began shuttering coal-fueled plants at dizzying rate without plans to replace them with other power sources.
This situation is not unique to Australia, energy analysts argue. Numerous blackouts in the country are showing what could happen if the U.S. expands exports at the same time as it begins shutting sources like coal.
“We have more options” in America than Australia, Michael Webber, deputy director of the Energy Institute at the University of Texas, told WSJ reporters, but “there’s always a risk that markets will behave in a different way than we anticipated.”
South Australia’s growing reliance on solar and wind power in the state “has not only led to a series of technical challenges,” but “also increased wholesale price volatility as the state rebalances its supply from dispatchable plant to intermittent generation,” Australia’s Energy Council noted last year.
Nearly 25 percent of homes in the state currently have solar panels installed, and the state gets 41 percent of its power from wind, solar and other green sources. Officials believe fluctuations in the supply of wind power have caused rolling brownouts and blackouts in South Australia.
Australia now exports so much LNG that it stands to overtake top exporter Qatar within a few short years. It exported more than 60 percent of its gas production last year, according to the BP Statistical Review of World Energy, which caused domestic gas prices to sky rocket in eastern Australia to as high as $17 per million British thermal units.
Experts within the Trump administration have warned about similar problems happening in the U.S. Energy Secretary Rick Perry even ordered a study in April examining to what extent solar and wind power are hurting what the Trump administration considers reliable forms of coal power.
The Energy Department will undergo a 60-day review of the energy grid to determine if green energy subsidies are hurting more reliable forms of energy like natural gas and coal. Perry’s review also seeks to evaluate to what extent regulatory burdens, subsidies, and tax policies “are responsible for forcing the premature retirement of baseload power plants.”
The grid study comes after Perry said that he and international counterparts discussed the need for a diverse supply of electricity during a G-7 Energy Ministerial meeting in Rome.