Daily Bulletin


The Conversation

  • Written by Michelle Grattan, Professorial Fellow, University of Canberra

Malcolm Turnbull has threatened to use the Commonwealth’s power over exports against gas producers if they do not carry through with undertakings to make more gas available for the domestic market.

Turnbull emphasised the industry was operating on “a social license” from the community.

“It is fundamental for Australians to be able to have the gas they need. There’s no point boasting about being, shortly, the largest exporter of liquefied natural gas if you don’t have enough gas at home,” he said after meeting east coast producers.

The producers guaranteed gas would be available to meet peak demand periods in the national electricity market, such as during heatwaves, with implementation arrangements to be in place for next summer.

They also promised to make more gas available for the local market “as soon as possible, to keep downward pressure on prices”.

Producers will revise their production forecasts for domestic gas and the Australian Energy Market Operator (AEMO) will update the supply outlook.

Turnbull said the projection last week showed a shortage of supply in the eastern market with deep implications for energy security. The AEMO said then: “A projected decline in gas production could result in a shortfall of gas-powered electricity generation impacting New South Wales, Victoria and South Australia from the summer of 2018-19.”

Turnbull said two of the east coast LNG exporters, APLNG and QGCLNG, have committed to being net domestic gas contributors – putting more gas into the domestic market than they took out of it – while the third, GLNG, “is taking the matter on notice”.

The meeting also called on state and territory governments to revisit present restrictions on gas exploration and development. Turnbull condemned new Victorian legislation banning gas exploration and development onshore, describing it as a reckless policy undermining the gas market.

There will be work on reforming the gas market and improving transparency, including to facilitate competition between producers and information for purchasers.

Another meeting will be held in a month to review progress.

Turnbull said the undertakings meant there wouldn’t be a repeat of a situation where the regulator called on a gas-peaking power plant for electricity in a heatwave, and there was no gas available.

But he said that while considerable progress had been made, there was more work to be done.

The government wanted as much freedom in the market as possible. “But I stress, we will not shirk from any measures that would be required – if all else fails – to protect Australian businesses, jobs and families,” he said.

“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.”

“We are a massive gas exporter. It is utterly untenable, unacceptable, for us to be in a position where domestic gas consumers – whether it’s generators, whether it’s businesses and industry, or whether it’s families – cannot have access to affordable gas.”

What the government wanted was to have more gas produced, more exported, and more available to create thousands of Australian jobs and to warm Australian homes.

The Australian Industry Group said it would take time to judge the effectiveness of the commitments the gas exporters were giving to domestic supply.

The group’s chief executive, Innes Willox, said supply into the gas market during extreme peaks was critical for a secure electricity system, “but it is the chronic tightness of the gas market that is driving contract prices to extremes.

"The test for the gas exporters will be whether they can stabilise the domestic contract market, not just tip some gas into the spot market from time to time.”

Willox said Australia was now paying the highest gas prices in the developed world.

“The soaring price of Australian gas has now reached record levels, taking Australia from having a competitive advantage in low gas prices to the point where even Japanese customers are able to buy gas on spot markets for well below the prices being offered to Australian customers today.”

Labor renewed its call for a reservation policy to ensure an adequate local supply.

Authors: Michelle Grattan, Professorial Fellow, University of Canberra

Read more http://theconversation.com/turnbull-warns-of-consequences-if-gas-industry-doesnt-keep-its-promises-74637

Writers Wanted

The Best Android tools and Utility Apps

arrow_forward

How to Find the Best SEO Services Company That Offers Guaranteed Results

arrow_forward

The Conversation
INTERWEBS DIGITAL AGENCY

Politics

Prime Minister Interview with Ben Fordham, 2GB

BEN FORDHAM: Scott Morrison, good morning to you.    PRIME MINISTER: Good morning, Ben. How are you?    FORDHAM: Good. How many days have you got to go?   PRIME MINISTER: I've got another we...

Scott Morrison - avatar Scott Morrison

Prime Minister Interview with Kieran Gilbert, Sky News

KIERAN GILBERT: Kieran Gilbert here with you and the Prime Minister joins me. Prime Minister, thanks so much for your time.  PRIME MINISTER: G'day Kieran.  GILBERT: An assumption a vaccine is ...

Daily Bulletin - avatar Daily Bulletin

Did BLM Really Change the US Police Work?

The Black Lives Matter (BLM) movement has proven that the power of the state rests in the hands of the people it governs. Following the death of 46-year-old black American George Floyd in a case of ...

a Guest Writer - avatar a Guest Writer

Business News

How to Find the Best SEO Services Company That Offers Guaranteed Results

As a business owner, you have to be strategic about how you’ll be able to reach your target market. That is why entrepreneurs implement various marketing tactics to reach their goals. With today...

News Co - avatar News Co

Top Reasons Why Your Business Needs SEO

SEO is crucial for the ranking of a website. You may think that SEO offers greater searchability while it can do more than this. The most cost-effective tool for the survival of smalls businesse...

News Co - avatar News Co

Nisbets’ Collab with The Lobby is Showing the Sexy Side of Hospitality Supply

Hospitality supply services might not immediately make you think ‘sexy’. But when a barkeep in a moodily lit bar holds up the perfectly formed juniper gin balloon or catches the light in the edg...

The Atticism - avatar The Atticism



News Co Media Group

Content & Technology Connecting Global Audiences

More Information - Less Opinion