Malcolm Turnbull gets gas industry guarantee on domestic supply
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Version 0 of 1. Malcolm Turnbull has said the gas industry has guaranteed greater supplies for Australians but warned he would use the commonwealth export powers “in the national interest” if the companies did not deliver. After a two-hour meeting between key ministers and gas chiefs, the prime minister said two producers had promised they would supply more into the domestic market but he gave no details of how much supply or when it would be made available. “The producers have given us a guarantee to ensure that gas is available for the national electricity market,” Turnbull said. “So there won’t be a repeat of a situation where a gas-peaking power plant is called on by the regulator to produce electricity during a heatwave and there’s no gas available. “That won’t happen again, consistent with the guarantees we’ve been given.” The meeting came after the Australian Energy Market Operator (Aemo) warned last week that Australia was facing energy shortages that could close businesses if governments did not carry out national planning as exports continue to dominate the country’s gas supply. Australia is the second-largest LNG exporter, with two thirds of the country’s gas sent overseas. The peak industry body, the Australian Petroleum Production and Exploration Association (Appea), aims to become the world’s largest LNG exporter by 2020. Turnbull’s intervention comes less than a month after he blamed state Labor governments’ renewable energy targets for rising prices, blackouts and energy shortages. The South Australian government released its energy plan on Tuesday for a state-owned gas plant, large battery storage and compelling energy retailers to source South Australian energy. The Turnbull government has also asked for advice on options to improve transparency and competition in the gas market from the Australian Competition and Consumer Commission (ACCC) and Mike Vertigan, the head of the gas market reform group in the Council of Australian Governments (Coag) energy council. Asked whether the gas guarantee would make make any difference to the amount of money being paid by local industrial gas users, Turnbull said it would depend on the amount of gas available. “But my expectation is yes – but time will tell.” Turnbull warned gas chiefs the commonwealth would not be afraid to use its powers to control exports if the domestic gas supply commitment was not fulfilled. “All of the powers that we have under the constitution, we reserve to be able to be used as and when the national interest demands it,” Turnbull said. “We have a responsibility – which we do not shirk from – to ensure that there is adequate gas supplies for the Australian domestic market.” Turnbull said gas producers APLNG and QGCLNG had agreed to increase their domestic supplies while Santos GLNG had agreed to “take it on notice”. “There’s no point boasting about being shortly about [to be] the largest exporter of liquefied natural gas if you don’t have enough gas at home,” Turnbull said. “Gas availability and affordability in Australia is the priority. The industry understands how important it is to the government, and to the Australian people, from whom they get the social licence they need to operate.” The chief executive of the Australian Petroleum Production & Exploration Association, Malcolm Roberts, told Guardian Australia Wednesday’s talks with the government had been “very constructive.” He said gas companies had given the government a “firm guarantee” that supply would be made available for periods of peak demand. Roberts said the industry had also made undertakings about increasing market transparency. He said it was desirable that transparency applied to all the costs gathered along the supply chain. He said the industry wanted to see restrictions around new gas developments removed to help boost supply. Roberts said the Victorian government, which has banned all gas development, was currently “very exposed”. The prime minister also called on states to lift their bans on conventional and coal seam gas. Last week, the Victorian government banned conventional and non-conventional gas exploration in that state. Less than a year ago, the ACCC completed a review which found gas suppliers on the east coast of Australia had used a market restructure to hike prices on domestic consumers and found evidence pipeline operators had set monopoly prices. The inquiry was sparked by complaints from Australian industry that from 2012 they could not get offers for gas supply for 2016 and beyond or received few offers at high prices. The meeting occurred on the day more than 800 staff were stood down from the $36bn Inpex gas project in Darwin over a contract dispute. |