Anthony Albanese is set to take on Australia’s wealthy gas companies as exporters are accused of sending all of our supplies overseas while we struggle with dire shortages.
An Australian Competition and Consumer Commission report on Monday predicted a significant gas shortfall next year that will further drive up spiking energy prices.
LNG giants who’ve cashed in on $70billion worth of exports this financial year are being warned of sweeping industry reforms if the shortfall, of up to 10 per cent of domestic demand, isn’t plugged.
Treasurer Jim Chalmers said the latest gas inquiry report from the competition watchdog highlighted some ‘alarming’ features of the east coast gas market.
LNG exporters have seen a windfall of profits as global energy prices soar (pictured: the Curtis Island, Queensland LNG project)
‘It projects a significant gas shortfall for next year unless gas producers supply more of their uncontracted or excess gas to the domestic market,’ he said.
The report, released on Monday, said the shortfall would occur in 2023 if all the excess gas produced by exporters was sent overseas.
It foreshadowed the shortage would occur amid rising demand and an increase in uncontracted gas, which would likely be sold offshore at higher prices.
The report said the gap would be worse than the situation in 2017, when both the ACCC and the Australian Energy Market Operator predicted shortages the following year.
That resulted in the then-coalition government triggering the domestic gas security mechanism process and ultimately striking a deal with gas exporters to make excess gas available in Australia before it was sold overseas.
The Albanese government has put gas exporters on notice after a domestic shortfall was forecast
The Albanese government is completing its own overhaul of the domestic gas security mechanism trigger after the energy market crises earlier this year.
It has so far reserved its decision on pulling its gas trigger that will force exporters to set aside the resource for domestic use.
But industry sources are reportedly expecting it will be pulled in the next few months with the Albanese government ramping up its rhetoric against the gas companies.
Mr Chalmers said the government took the report’s findings seriously and it would respond to the ACCC’s inquiry.
‘The (ACCC’s) findings are deeply concerning and I urge gas producers to do the right thing by Australians,’ Dr Chalmers said.
‘It’s critical that our domestic gas supply is secure and competitively priced, particularly when households and businesses are under extreme pressure.’
A showdown could be looming, however, with Australian Petroleum Production and Exploration Association acting chief executive Damian Dwyer recently saying Mr Albanese should back down on ‘irresponsible calls to intervene in our gas export market’.
The shortfall could further drive up household gas bills and costs for businesses that rely on gas (file image)
Black coal generation in NSW and Queensland fell to its lowest-ever second quarter output following coal-fired power plant outages and fuel constraints, according to the Australian Energy Market Operator.
East coast wholesale gas prices have increased more than threefold in the second quarter, jumping to an average of $28.40 per gigajoule compared with $8.20 in the same quarter last year, the operator revealed in its quarterly report.