Queensland Gas generated plenty of excitement yesterday when it announced plans for a Hunter Valley power station to be supplied from Queensland’s vast coal-seam methane gas reserves.

There is so much coal-seam-methane gas in Australia’s eastern states that it remains an absolute travesty that NSW is selling good black coal to its power stations at about $12 a tonne, when it could be exported for ten times more.

Few people know it, but there is also an emerging view in Victoria that the Gippsland basin potentially has more gas reserves than either Queensland or the North West Shelf.

Yet the Victorians who will vote in the Gippsland by-election continue to burn dirty brown coal in the La Trobe Valley that does more than anything else to deliver Australia the world’s worst record for carbon emissions on a per capita basis.

While the green purists and climate change deniers can dream about “clean coal”, wind, solar and geo-sequestration, developing baseload capacity from these technologies is at least 15 years away.

Australia should be closing down coal-fired power stations and building a stack of new gas-fired power plants right now. Instead, we’re years behind because John Howard was so captured by the carbon club.

We’d actually make money out of the gas switch when you consider the increased coal exports – plus Australia would be feted the world over for achieving the biggest cuts in carbon emissions.

The $14 billion bid from British Gas for Origin Energy has alerted the world to the huge value in coal-seam methane gas, yet the debate seems to be exclusively focused on Queensland.

It’s time we explored the huge reserves of brown coal in Victoria because brown coal is 60% water, 20% gas and 20% carbon.

As Queensland Gas spindoctor Hedley Thomas keeps telling everyone, clean water is one of the by-products from coal-seam methane gas production. We had this statement from the company on May 18:

QGC invests in applications for large volumes of water yielded during the release of coal seam gas. The water has the potential to help drought-affected communities, towns and farms in the Surat Basin.

And here is Victoria planning to spend $3.1 billion on a desalination plant not far from the La Trobe Valley when it could pursue a strategy of coal seam gas-fired power stations that throw off heaps of fresh water.

With a price on carbon coming and the Federal Government expected to reap about $20 billion from the sale of permits, planning for this revolution in the La Trobe Valley should be moving full steam ahead.

I gave this revolutionary scenario a big push with Lindy Burns on 774 ABC Melbourne last Tuesday, but there has been precisely no follow-up.

Maybe John Brumby should poach Hedley Thomas from Queensland Gas to co-ordinate the spin campaign because Victoria has a great coal-seam methane gas story to tell yet few people know about it.

*Check out Stephen Bartholomeusz’s excellent analysis on the QGC power station play on Business Spectator