Jun 16, 2026 · 45 min · 12 segments
The Grattan energy team is back with a new podcast on their latest report, Out of gas: Managing the decline of gas in Australia. In this episode, our energy experts dig into the detail of their…
Alison ReeveGuest
Ben JeffersonGuestJust on that point about the fact that gas is declining and it is going to be unmanaged, it's going to be costly and disruptive, I think for me, the biggest place that comes out is really through the distribution gas network, the system of pipelines that delivers gas to people.
We argued that we actually need a complete shakeup in the regulatory model for the gas distribution pipelines, and that because demand is declining on these pipelines, we largely should phase these out over the next 20 to 25 years.
Before we get into the details of our proposal to do that, Ben, could you just set the argument out for us? We make the case that these networks are on a pathway to an expensive and disruptive collapse.
Well, first thing, Hamish, is that when you pay your gas bill, you're not just paying for the gas itself, you're actually paying for all of the supply infrastructure that sits behind that.
So all of the pipes in the ground and the related infrastructure and the services that actually get the gas to your house, that actually makes up about 40% of your gas bill.
And so we know now there are actually lots of households starting to leave the gas network, and in the last five years or so, household use across Australia has declined by 16%.
In the last year, we've seen more people leaving the gas network than connecting for the first time.
But the pipes are mostly staying put, so that means that the network cost, the amount that you need to pay to keep all of those pipes going and to build them, that 40% is going to go up because the number of people who are paying to cover it is going down, but the costs are remaining more or less the same.
And the energy regulator is forecasting that this demand decline is going to continue.
There's going to be an 80% household demand decline by 2045 on the East Coast, and they're saying that could put your household bills for gas up by 100% by 2035 and 600% by 2050.
For one of the gas networks we looked at, so the people who are actually providing the pipes and infrastructure, 80% customer demand decline means they would lose 70% of their revenue.
To get ahead of these problems, to reduce the costs that people are actually paying, the gas networks are going to try and decommission these gas networks, but that's really expensive and there's currently no plan for how that's going to happen, who's going to pay for it, and when it's going to take place by.
[lip smack] So the risk is that the people who are left paying the bill for all of those things are going to be renters, people in apartments, and people who just can't afford to electrify, the last people left on the gas network.
Just on that point about the fact that gas is declining and it is going to be unmanaged, it's going to be costly and disruptive, I think for me, the biggest place that comes out is really through the distribution gas network, the system of pipelines that delivers gas to people.
We argued that we actually need a complete shakeup in the regulatory model for the gas distribution pipelines, and that because demand is declining on these pipelines, we largely should phase these out over the next 20 to 25 years.
Before we get into the details of our proposal to do that, Ben, could you just set the argument out for us? We make the case that these networks are on a pathway to an expensive and disruptive collapse.
Well, first thing, Hamish, is that when you pay your gas bill, you're not just paying for the gas itself, you're actually paying for all of the supply infrastructure that sits behind that.
So all of the pipes in the ground and the related infrastructure and the services that actually get the gas to your house, that actually makes up about 40% of your gas bill.
And so we know now there are actually lots of households starting to leave the gas network, and in the last five years or so, household use across Australia has declined by 16%.
In the last year, we've seen more people leaving the gas network than connecting for the first time.
But the pipes are mostly staying put, so that means that the network cost, the amount that you need to pay to keep all of those pipes going and to build them, that 40% is going to go up because the number of people who are paying to cover it is going down, but the costs are remaining more or less the same.
And the energy regulator is forecasting that this demand decline is going to continue.
There's going to be an 80% household demand decline by 2045 on the East Coast, and they're saying that could put your household bills for gas up by 100% by 2035 and 600% by 2050.
For one of the gas networks we looked at, so the people who are actually providing the pipes and infrastructure, 80% customer demand decline means they would lose 70% of their revenue.
To get ahead of these problems, to reduce the costs that people are actually paying, the gas networks are going to try and decommission these gas networks, but that's really expensive and there's currently no plan for how that's going to happen, who's going to pay for it, and when it's going to take place by.
[lip smack] So the risk is that the people who are left paying the bill for all of those things are going to be renters, people in apartments, and people who just can't afford to electrify, the last people left on the gas network.
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