Malcolm Turnbull has his finger on the trigger for gas export controls but is giving energy companies one last chance to make up a shortfall in supply before he pulls it.
The prime minister received twin reports on Monday showing the expected shortfall in gas for 2018 is more than three times larger than projected earlier in the year.
This is despite the mere threat of the domestic gas security mechanism encouraging exporters to put more of their supply on the Australian market instead of sending it overseas.
“We will not let the power bills of Australians rise further and further because of a shortfall of gas on the east coast of Australia,” Mr Turnbull told reporters in Sydney on Monday.
“If we are not able to receive the assurances from the industry to our satisfaction and that of (competition watchdog) the ACCC, then we will impose those export controls.”
He spoke with gas companies earlier on Monday and will talk to their bosses again during the week, seeking concrete plans on how they will avoid running out of gas for the domestic market.
Labor has been scathing of this approach, saying the nation needs a formal declaration of a shortfall, not just talk.
“It’s not enough for the prime minister to continue to call in business industry chiefs … and assume that wagging his prime ministerial finger and giving them a stern talking to is going to deliver action,” opposition energy spokesman Mark Butler told reporters in Adelaide.
Opposition Leader Bill Shorten, who has called for weeks for the government to pull the gas trigger, took a break between meetings in South Korea to tweet the prime minister’s response was “hopeless”.
The Australian Competition and Consumer Commission and the Australian Energy Market Operator both predict a shortfall of nearly 110 petajoules of gas in 2018 and similar in 2019.
This is about one-sixth of the projected amount of demand for gas.
ACCC chairman Rod Sims said this could be significantly reduced if expected sales on international LNG spot markets were instead redirected to the domestic market.
He wasn’t sure why this hadn’t happened already.
AEMO chief executive Audrey Zibelman said projections of gas production and demand varied, indicating a dynamic situation that could change rapidly and needed a close eye kept on it.
She wants to see reforms to improve predictability and stability in energy markets to the benefit of consumers.
Mr Turnbull will also again write to the Victorian and NSW premiers and Northern Territory chief minister, urging them to lift moratoriums on gas exploration and development.
Federal Energy Minister Josh Frydenberg said it had been estimated there could be 200,000 petajoules of gas potentially undeveloped in the NT – dwarfing the 110 petajoule shortfall.
“We are now starting to pay the price of the states’ mindless moratoriums and bans on gas development,” he said.
Anti-coal seam gas campaigners the Lock The Gate Alliance say restricting gas exports is a better option than digging up prime agricultural land.
“Australian farmland is being put at risk for gas that is getting exported off overseas,” spokeswoman Naomi Hogan said.
“Pushing more expensive fracked gas will only lock us into more high-priced gas into the future.”