Jeff Kennett was notorious for his dislike of inquiries, particularly royal commissions. But there was one that even he had to commission immediately, when the Longford gas plant suffered an explosion in September 1998, killing two people and shutting down Victoria’s natural gas supply system for nearly three weeks. I remember it well, living on-campus at Melbourne University at the time. It was three weeks of barbecues, and boiling kettles to have a bath. More pertinently, it also shut down much of Victorian industry, from dairies to car manufacturers.
Now, it seems that Western Australia is suffering something similar. An explosion on a gas plant at Varanus Island, a tiny speck of land off the coast somewhere near Karratha, has reduced Western Australia’s domestic gas supply by 30%, and will likely take three months to fix.
The WA Liberal Party has, predictably, called for a royal commission into the crisis, focussing on the role of the various state government regulators in monitoring the Varanus Island gas plant. Personally, I reckon that might be asking a secondary question.
On the various discussions of energy issues on LP, one point in favour of small-scale renewable energy that gets made repeatedly is the improved resilience to catastrophic failure. While, generally, I think that’s overrated as an issue, our current centralized energy architectures place heavy responsibility on those administering the system to prepare appropriately for the possibility of failure, because failures will inevitably happen at some point. This may involve building redundant capacity into the system - for instance, adding gas storage facilities, such as the Iona storage plant in western Victoria. It may also involve ensuring that some of your gas-fired power stations can also run on diesel in an emergency - though, to be fair, most of Western Australia’s gas-fired plants can. And, most importantly, there should be detailed contingency plans so that when accidents like this happen people aren’t just scrambling around in the dark for solutions.
If I were an opposition, that’s what I’d be pressing the government hardest on, not some kind of belief that you can avoid mechanical failures entirely through onerous enough inspections.
Hang on Robert.
Isn’t this just the tonic for a two speed economy running with just one gear? The W.A. economic slowdown that we needed to have. That sought of thing.
Word, Robert.
Maybe this will be a catalyst for industries/enterprises to start investing in power generation for themselves, instead of relying on the energy grid. Then again, probably not.
Another reason not to leave the maintenance of vital australian national resources in the hands of overseas companies. Which reminds me a US consortium is handling the late Costello ’s future fund that should be reviewed asap
It is still possible to enjoy a sort of fiddling while Rome doesn’t burn vibe though, and householders are not turning off anything.
http://theworstofperth.com/2008/06/19/burning-down-the-house/
The govt can’t afford to cut household supplies with an election near, so it is mostly big business that has to cop the shortages.
A friend of mine works for the regulators and is involved in the investigation into the incident. He reckons that, currently, far more emphasis is being placed by the government on media management than on either investigating the explosion or seeking solutions.
But apparently, and Mr Carpenter has been most emphatic about this, it’s not a crisis.
Hang on, don’t we have, like, 200 years of natural gas, most of it in WA?
Aren’t we supposed to be an “energy superpower” exporting our vast supplies of natural gas to the energy-hungry economies of Asia?
One gas plant goes down and all of a sudden WA can’t even supply its own gas.
WTF?!
I seem to recall from media reports in Victoria that year that an unintented side effect of the Longford explosion was a baby boom nine months later! People had to warm up the bed without central heating… Heh.
Carbonsink:
Background briefing had a good show about the natural gas situation in Australia. In summary, they’re tending to try to export it all overseas:
carbonsink,
Most of the gas that comes down to Perth comes through the Dampier to Bunbury pipeline - and this is fed from two large plants built about 20 years ago. They have both been improved since but they remain largely the same as when built. It was one of these two plants that blew up.
The governments since (both sides) have had many warnings that this is not secure enough - there are many points at which supply is vulnerable (the plants, the single pipeline, distribution points etc.). Nothing has been done - leaving us where we are now. I can only presume that this has been because no-one has wanted to spend the money as insurance. There were several options, all expensive, but nothing like what it is now costing in terms of lost revenue for the State.
Chalk this one up as yet another cock-up by governments too concerned about the immediate cash position to worry about the long term.
I, for one, am tired of hearing the word “crisis” used to describe any event or situation that involves all but the most minor inconvenience or loss to any particular group of people, be they WA residents (as I am) or something entirely different (eg Queenslanders). I blame the “Asian Economic Crisis”™ of 1997 or so for setting off the preponderance of crises in the modern era.
In fact, I’m off to the condemning thread right now. See you in hell, punks…
I’ve yet to see a detailed explanation as to why it’s going to take so long to restore service.
Longford showed that private enterprise can be as vulnerable to ossified, out-of-sight mismanagement as any government enterprise. Redundancy costs, and managers (and customers) don’t like paying for it.
Until they don’t have it of course. They they learn about opportunity lost cost.
I hope Esso learnt from their mistakes. They certainly copped a lot of law-suits for their trouble. Organisational entropy is human nature on a macro scale. It takes employees who care to prevent it, they’re not always listened to, and they often just give up trying.
I think we need truly independent infrastructure audits. Longford was dumped in WorkCover’s purview (after the fact), but the question is bigger than workplace safety. SupplyCover perhaps?
Craig M’s post hints at the major difference between the two situations.
Longford was eventually seen as the work of a deregulating neoliberal premier hand in glove with an uncaring corporate giant, with an outcome of several workers killed or injured. The event was followed by a prolonged period of post accident enquiry, with a shabby response from those responsible to further antagonise the electorate.
Carpenter gets by on the basis that no one was killed. Labor is riding its luck now, as Howard’s lot did for years, but the electorate might have long memories if nothing better than “media management” comes from this warning from the gods.
Of course, as someone above pointed out, the tabloid tendency to highlight anything beyond chewing gum stuck to someone’s shoe as a “crisis”, does explain the usual Labor timidity, if spin is all that’s happening. .
Boy, was it speccy on the six o’cock news, but!
Engineers Australia, of course, does do work in this direction for what you might call informational purposes. For instance, their annual, fairly broad brush report cards on infrastructure. I’d be happy to see the organisation stick its hand up to organise the sort of more detailed audits referred to by Craig Mc.
If nothing else, it would give them something to do other than charge me $450 a year for the priviledge of receiving weekly inducements to take up an American Express Platinum card which I don’t want and for which I am not eligible, which seems to be EA’s current raison d’etre.
It may not be a human crisis, but shutting down much of Western Australia’s industry for three months, when the place is growing like topsy, is going to cost a lot of people a lot of money - notably including the federal government.
It will also include workers who will be stood down from their factory jobs while there’s no gas for the factories to operate.
Crisis may be a misnomer, but it’s a serious situation which requires, um, “crisis management”, as well as some examination of how a single failure could have such a serious impact.
PW: Longford had nothing to do with Kennett, or deregulation as such (which
is not to say that some specific additional legislation wouldn’t have helped)
. It was all Esso’s fault. “Uncaring” perhaps implies some Dickensian motive
. It wasn’t that they had evil intentions, it was that they had forgotten to
have intentions.
And it’s not by any means a unique example. Normally reliable systems all
over the world tick over quietly and the people responsible for them often
forget they even exist. OTOH, systems which “nag” owners with maintenance
are always kept in the forefront and are fully serviced & budgeted. The
Squeaky Wheel as they say.
Another factor is re-engineering. No matter how well designed a system is at
its inception, decades of maintenance, scope creep and modifications will
eventually lead to an inherently unreliable system. Longford was such a
system. Businesses are loath to re-engineer software, when you’re only
moving characters in text files. Imagine how likely they are to re-engineer
a working production facility that handles volatile substances and has
sometimes billions of dollars of metal work.
That’s part of the point. The government is refusing to reduce supply to domestic users or any such thing, so most voters don’t feel the pinch. They learnt from the summer blackouts fiasco of a few years ago that this is bad politics.
But it’s still bad economics. A floating price for gas would allow businesses to work out themselves what mix of service and shutdown to go for, rather than relying on disruptive and unpredictable rationing.
This would all be pretty juicy stuff for any opposition to work with, except that the clowns over here in the Liberal party are a f*cking pathetic joke.
Industry is essentially self regulated , more often than not the authority only comes into the equation after the event.
Many companies ride their luck and will accept outright non compliances in certain areas or initiate ineffective token efforts so as they are seen to be acting.
(I have never figured out at which management level they start substituting their own reality…..close your eyes and the rust will go away)
I’m off to Varanus in a few days….should be interesting.
I see where the problem is. I said “was seen as” not that it necessarily was, Kennett’s fault.
I was actually thinking about the likely electoral fallout of these events comnpared to Victoria in the mid ‘nineties. In the circumstances, “uncaring” is not that far from “…they had forgotten to have intentions”. and that to me is the essence of neoliberalism- “self first”, etc etc.
Jacques and others - I understand from some people who worked in the gas when it was part of secwa that it is very difficult or impossible to ration the gas to consumers.
All sorts of issues if the pressure drops too much, or is cut off completely to customers.
Unsure what happened after Longford, what with purging the lines and getting it all going again - it would be good to know how they sorted it out.
PW: It’s not the essence of neoliberalism (and I don’t think “self first” is either), it’s human nature. You will forget the things that allow you to forget them. In once sense it’s an argument against ultra-reliable systems. In another it’s that the price of reliability is eternal vigilance.
I once worked for a doddery old top manager who on the surface was an anachronism in an era of modern corporations. That absent-minded man was the sharpest senior manager I’ve ever worked for. He would regularly go around to every single person in his organisation, sit down with them and talk with them about their job, what it was, what their problems were, and what he expected from them. This wasn’t some back-slapping extrovert either - he had to overcome an introverted nature to do it.
That’s the kind of management required to prevent the entropy displayed at Longford. And it’s not micro-management - it’s trust but verify. Obviously some senior managers are short on the “verify” part - because that’s the part that takes hard work.
Peter;
Thanks for that. But I still think my point about the economics stands.
feh - it’s in the nature of natural gas plants to blow up from time to time. That’s why they’re all put a long way from towns. And the risk of your supplies being cut by 30% for a few months once every 20 or 30 years is not big enough to justify spending billions on surplus storage and distribution facilities (those facilities themselves would anyway be an additional explosion risk).
We should worry more about the risks to workers - but that needs a decent compo system and a suitable risk premium on wages (hazardous plant workers generally get the latter).
DD - there was something on TV about using wells at Dongara (closer to Perth) where gas has already been extracted. In other words putting gas back where it came from, to be used as an emergency store. That might have been cheaper than what this ‘crisis’ is going to cost.
DD: I’d like to see some analysis backing that up.
It cost Victoria a great deal of money when Longford blew up. This is only a partial gas cut, but it’s going to go on for a heck of a lot longer. The cost of the extra diesel alone is going to run into the hundreds of millions, I’ll bet.