Green Oversite



Natural Gas Substitution - Victoria

Update 1 & 2

By Bruce Barbour - Update 1 - February 2022, Update 2 July 2022

See earlier page on this matter here.

The State Government recently provided an update to the people and organisations that made submissions to the consultation process on progress to date in developing the Gas Substitution Roadmap.

Originally slatted to be released in late 2021, by February 2022 they are still a fair way from releasing the final Roadmap. This is as anticipated.

As I said it still hasn't been finalised however from the briefing it appears as though they are not going for compulsory full electrification of domestic and commercial natural gas use. The impression that I got was that they are seriously considering substituting natural gas methane with either bio-methane or bio-gas* even though they acknowledged that electrification provides the homeowner/building owner with the cheapest means of heating their house or office - saving hundreds of dollars a year.

I asked a question about whether the bio-gas/bio-methane option would require the growing of dedicated crops for the purpose - potentially displacing food crops. They indicated that they thought that sufficient gas could be generated from human and agricultural waste products.

Bio-methane is not the optimal gas substitution. Perhaps they are concerned about being seen to be forcing people away from a gas product and the potential for discontent from people who just do not like change - even if the change saves them money. Perhaps they are concerned about the "Nightmare Scenario" discussed in the earlier post - though as public servants should they be concerned with the politics of the situation? - that is for politicians. (Perhaps their political masters have indicated that they won't support an electrification solution for the reasons outlined in the Nightmare Scenario.)

Bio-methane is not without greenhouse gas release into the atmosphere. Bio-methane is the same as methane. It is going to be released/escape into the atmosphere during production, distribution and use, just as fossil fuel methane is released or escapes. Fugitive emissions will occur. And the methane released would still have a greenhouse gas impact of 75 to 80 times that of carbon dioxide over twenty years.

If they were to adopt bio-methane as the natural gas substitute it must only be a interim stage. Bio-methane is surely is going to cost the user more than heat from electrification and probably more that heat from natural gas - provided they don't subsidise it (this is important). So the drift away from the gaseous substitute to electrification will continue into the future just as there is a drift away from natural gas at present. If the price does go up from current gas price then the natural drift will accelerate.

The Government could also start mixing the methane/bio-methane with up to 10% green hydrogen to lessen the greenhouse gas impact.

In addition the Government could change some of the rules so that it is no longer compulsory for new estates to have gas reticulation, many (most?) of the new housing estates would be fully electric - no gas reticulation or gas use. This would be very attractive to developers as it would cost them less to subdivide a new estate - though further charges or rule changes might be put on them to ensure the electricity grid is not overloaded and there is sufficient storage in the system. And the Government could also remove some of the rules that require new house construction to connect to natural gas / methane if there is gas reticulation in the street.

Further to this if the Government continued to offer subsidies to low income households to switch their heating to electric heat pumps, and in the future expands that subsidy program to all households, this would further accelerate the switch to electric heat pump heating.

By this process the force of the economic advantage of electrification would mean that into the future very few houses would be willing to pay the price penalty for having gas connection and hopefully the gas system can be shut down. The Government would not be forcing anyone to go away from gas - it would be their choice due to cost and market forces.

This pathway would be much more expensive - for the taxpayer and the homeowners, slower than a fully planned, Government backed electrification changeover pathway and would involve a higher level of greenhouse gas release overall. However this might be the price that has to be paid due to the politics of the situation in Victoria - due to a climate change denying opposition that would probably use any means of gaining political advantage. (Note that there is still no mention of climate change in Victorian Liberal Party Policy - I fear if elected they would reverse most of the climate change policy and innovations of the current Government.)

Anyway this is speculation on my part. When the final Gas Substitution Roadmap is released I will report on what it does actually propose.

* Note: Bio-gas is basically dirty bio-methane. It contains percentages of carbon dioxide, water vapour and other gases as well as methane. Bio-methane is cleaned up bio-gas so that it is predominantly methane.

Update 2

July 2022

The final Victorian Gas Substitution Roadmap has now been released -

As anticipated natural gas has not been banned outright. Instead the Government has adopted a policy of encouraging the change over to all electric buildings by changes to regulations, subsidies for changeover and presumably education/advertising campaign. However the Government will also support the development of a bio-methane industry and a hydrogen industry. The development of the hydrogen industry is required however the support for bio-methane, other than for niche uses, is not desirable due primarily to fugitive emissions. While I hope all efforts will be made to minimise fugitive emission I doubt they will be able to be eliminated. As stated elsewhere bio-methane is the same as methane in terms of its green house impacts in the atmosphere. 

A welcome part of the changes proposed in the Roadmap is that new homes and new residential and commercial estates and subdivisions won’t be required to supply natural gas reticulation nor building connection to existing gas reticulation. Though it appears that natural gas reticulation or connection won’t be banned. As this saves costs to the developer it is likely that (nearly) all new estates will be without gas connection therefore will be all electric.

It could be better but it is a definite improvement. Hopefully the commercial and residential electrification program will be very successful. Also hopefully the bio-methane industry will become solely a niche industry perhaps providing feedstock for chemical manufacturing processes, rather than for space and process heating.

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