There is no future for gas in Australia and the industry must address its own issues if it wants any role before it dies, a top energy expert says.
Grattan Institute energy program director Tony Wood has told gas industry heavyweights he's also unsure whether gas can be a transition fuel as the market moves from coal-fired power generation to low emission renewables such as solar, wind and hydropower.
He said that's because gas market is inefficient, with prices failing to transparently reflect supply and demand.
"There is not much debate, I would suggest, that there is no future for gas," Mr Wood told the Australian Domestic Gas Outlook conference in Sydney on Thursday.
"That's a little bit like saying to a child or grandchild: 'there is no future for you because you're going to die'.
"It's what you do in the meantime that's interesting, and so what the role of gas will be before it dies is the question."
Mr Wood said it seemed, with political discussions ongoing in Canberra, that the gas sector was heading towards much stronger regulation.
"This is not unique to Australia by the way," he said.
"Anybody who has looked at the UK situation would have seen a way in which you can move from a market to centrally planned system in not a very long period of time, and yet pretend you've still got a market."
Mr Wood said one way the industry could help itself would be to engage more with governments rather than simply blaming them for its problems, particularly in Victoria where a blanket moratorium was extended on the exploration and development of onshore gas just last week.
He said the state government had just decided to push up power prices by spending $200 million to prop up Alcoa's aluminium smelter, but the gas sector had not taken advantage of the situation by entering the energy debate.
"The industry got most upset in relation to that sort of policy position, and yet they gave the government no reason why they should lift the moratorium, no reason that government could use politically," he said.
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