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A short history
on the Victorian
gas industry
By Michael Weber, Data Analyst,
Gas and Pipeline Strategy
The history of Victoria’s gas industry is
an interesting one with a number of twists
and turns. It is about feast and famine.
From humble beginnings, the production
of gas from coal became a large enterprise for
Melbourne and Victoria, but ended with the
conversion to natural gas in the 1960s.
Gas, as an energy source, first came to
prominence as a way of providing superior lighting
for Melbourne’s streets and shops. Street lighting
up to the mid-1850s was minimal, with Melbourne
residents relying on candles and oil lamps for
illumination. The first steps towards using coal
gas to provide lighting occurred in the 1840s,
where two Melbourne shopkeepers installed small
gas plants to illuminate their shops. This novelty
attracted considerable attention and proved to
be a great success for business.
The improvement in illumination, as a result
of gas lighting, gave rise to the formation of the
City of Melbourne Gas and Coke Company in
1850. However, it was not until 1856 after the end
of the Victorian gold rush and the return of workers
from the gold fields that the company was able to
provide gas illumination to Melbourne buildings.
Gas street lighting was delayed to the following
year after price negotiations between
the Melbourne City Council and the Gas Co.
were completed.
As the advantages of gas lighting became
apparent, the demand for supply increased. In
1861, a second supplier began operations and
the original Melbourne gas company soon faced
competition. By 1873, a third company entered
the market and by 1878, the rival corporations
amalgamated to form the Metropolitan Gas
Company.
As the city grew and suburbs spread, an
ever-increasing demand for gas to service new
estates drew by the public. Gas lighting remained
the mainstay of the market; however, gas cookers,
gas water heaters and gas space heaters grew
in popularity in the mid to late 1800s. New gas
companies were formed to service other areas
and compete with the existing companies. By
1892, 50 gasworks were established in Victoria,
a dozen within Melbourne and its immediate
surroundings. This rapidly growing yet unregulated
industry reigned in 1896, when the Victorian
Parliament enacted the Electric Light and Power
Act to provide regulation to an industry dealing
in a hazardous field.
Bitter competition for sales between gas
companies forced gas prices down. This was
favourable for customers, but forced some
gas companies to merge to stay in business.
Greater pressure to turn a profit caused further
amalgamations and by 1900, the state’s three
largest players were the Brighton Gas Company,
the Metropolitan Gas Company and the Colonial
Gas Association.
By 1934, the gas industry become aware of
the need to market its product and provide better
appliances. A wider range of more appealing and
efficient gas cookers, gas space heaters and gas
water heaters appeared in modern
gas showrooms.
Gas became cheaper thanks to new
technology. Yet, in country Victoria gas use was in
decline as electricity cables extended throughout
the State. Consequently, some country gasworks
were forced to close.
The gas and the electricity industries in
Victoria relied on black coal supplied from New
South Wales. This supply was unreliable, often
disrupted by strikes on the docks and at the
mines. During the 1940s, chronic coal shortages
caused havoc in the Victorian gas industry
causing Autumn/Winter gas rationing in
Melbourne.
When the supply of black coal interrupted
gas making, Gippsland’s brown coal deposits
were considered a substitute; however, some
technical difficulties were hard to overcome. As a
result, the Victorian gas industry remained subject
to frequent coal shortages, causing gas rationing
for Melbourne and many country centres.
In 1951, the Gas and Fuel Corporation of
Victoria (GFCV) was formed. This Corporation was
an amalgamation of the Brighton Gas Company,
the Metropolitan Gas Company and the Victorian
State Government.
The GFCV’s primary goal was to construct
a brown coal gas plant at Morwell using the high
pressure ‘Lurgi’ gasification process developed
in Germany in the first half of the 20th century,
and a long-distance, high-pressure gas pipeline
from Morwell to Melbourne. While GFCV supplied
the greater part of Melbourne with gas, privately
owned gas companies still remained.
Once the Morwell plant commenced
producing gas in late 1956, other sources of
cheap gas-making material such as waste gases
from oil refineries surfaced. In the early 1960s,
varieties of gases were blended in Melbourne
to form ‘town gas’.
Gasometers, correctly known as gas holders,
were scattered across Melbourne’s suburban
landscape. These large cylindrical structures,
which dominated local skylines, stored gas
at times of low demand for supply, into the
surrounding network of gas mains when the
demand for supply rose. Following the introduction
of natural gas, these were decommissioned and
removed.
In 1965, commercial reserves of natural gas
were discovered off the Victorian coast near Lakes
Entrance. Natural gas, distributed by both GFCV
and Colonial Gas Association (later to become
Colonial Gas Holdings) arrived in March 1969.
By the end of 1970, almost 1.3 million gas
appliances in Melbourne converted to natural gas
operation. As the conversion program proceeded,
the gasworks around Melbourne closed down.
Founded in 1858, the Geelong Gas Company
was a private company that produced gas for use
in homes and industries. It closed its doors in
1971 when Geelong converted to natural gas
and was later purchased by GFCV.
As the 1970s progressed, natural gas
pipelines spread throughout the state. In 1973,
with the purchase of Colonial Gas Holdings,
1840
1849 Gas used by
Swanston Street baker
1840s Experimental
gas was lighting
in Melbourne shops
1850 City of Melbourne
Gas and Co.
1856 Gas for shops and
offices
1860
1878 Brighton Gas Co.
1880
1888 Electric lighting
challenges gas lighting in
the street
1896 Electric Light
and Power Act 1900
– The beginning
of gas regulation
1920
1878 Brighton Gas Co.
1940
1956 Morwell brown coal
gasification and high pressure
pipeline begin operations
1873 South Melbourne
Gas Co.
1878 Metropolitan
Gas Co.
1888 Colonial Gas
Association (CGA)
1900 Fifty gasworks
in Victoria
1918 New South Wales
mining strike causes
investigation into
Latrobe Valley
brown coal
1940s Severe gas
rationing due to frequent
coal shortages from
NSW
1950 Gas and Fuel
Corporation of Victoria
(GFCV)
1960
1969 Natural gas distributed
by GFCV and CGA
1970 Introduction of
natural gas causes works
to close down
1980
1965 Commercial
reserves of natural gas
found in Bass Strait
1969-1970 Gas
appliances converted to
use natural gas
1973 GFCV acquires
Colonial Gas Association
1980s-1990s Decline of
the GFCV
2000
Victorian
Gas
Industry
Timeline
2020
1997 The Office of
Gas Safety replaces
the GFCV
2005 The Office of Gas
Safety combines
with the Office of the
Chief Electrical
Inspector to form
Energy Safe Victoria