Anthony Albanese says the federal government is in talks with West Australian gas producers to shore up supplies as the nation teeters on the brink of an energy crisis.
Newly-appointed Resources Minister Madeleine King has engaged Woodside and other major providers in discussing supplying liquefied natural gas to the eastern states.
A cold snap across southeastern Australia, outages at coal-fired power stations, the collapse of a gas supplier, and sanctions on Russia have combined to fuel a sharp increase in the wholesale price of gas.
The spot price was already rising due to increased global demand as countries transitioned from using Russian gas and coal in response to its invasion of Ukraine.
The local supply shortage has developed despite Australia being one of the world’s biggest producers of liquefied natural gas.
Camera IconAnthony Albanese has said the government is negotiating with gas producers to shore up supplies. NCA NewsWire / Martin Ollman Credit: News Corp Australia
The Prime Minister on Friday said some of the constraints on energy supply were “beyond any government’s control” but he placed some of the blame on the Coalition.
“What has occurred with Russia and Ukraine and the consequential significant hike in global prices are beyond people’s control,” Mr Albanese told ABC Radio Perth.
“But what was in the government’s control is having an energy policy, and we’ve been through nine years of no energy policy.”
He reaffirmed Labor’s support for Woodside’s Scarborough gas project off the WA coast, saying a “simple stop” position on fossil fuels wouldn’t meet the economy’s needs.
Mr. Albanese said Energy Minister Chris Bowen was also in talks with the sector about alleviating the immediate pressure on businesses and households.
Mr. Bowen on Thursday said the Australian energy market was facing a “perfect storm” and warned skyrocketing wholesale prices couldn’t necessarily be solved immediately.
Mr. Bowen will meet with state and territory energy ministers next week to be briefed by the Australian Energy Market Operator and the energy regulator.
“The Albanese Labor government will take whatever action is necessary to ensure ongoing reliability and affordability for the energy markets … based on expert advice,” he said.
Camera IconEnergy Minister Chris Bowen hasn’t ruled out any particular measures to solve the crisis. NCA NewsWire / Martin Ollman Credit: News Corp Australia
Mr. Bowen was asked about the prospect of pulling the government’s “gas trigger” to requisition gas marked for export to bolster local supplies.
He said enacting the emergency mechanism wouldn’t help in the short term as it wouldn’t come into effect until January next year.
Another option being floated would be to introduce a national domestic gas reservation policy — similar to that in WA—requiring a proportion of gas produced in Australia is kept here.
Mr. Bowen hasn’t ruled out any particular measures.
Australian Workers’ Union national secretary Daniel Walton has called on the Albanese government to pull the gas trigger immediately.
“Yes, it won’t come into effect until January, but ,manufacturers hanging in there by the skin of their teeth will be able to tell investors some relief is on the way,” he said.
Mr. Walton said the government couldn’t rely on negotiations with gas companies unless they guaranteed affordability.
Camera IconAustralian Workers’ Union national secretary Daniel Walton has warned the government about relying on gas producers to solve the crisis. Grant Wells. Credit: Supplied
The Australia Institute principal adviser Mark Ogge said research done by the progressive think tank showed domestic gas consumption was dwarfed by the amount of gas produced for export.
“Australia does not have a gas supply problem; it has a gas export problem. Eighty percent of Australia’s gas is exported,” he said.
“The idea that there is a gas shortage is a joke, but the only ones laughing are gas executives – all the way to the bank.”
Mr. Ogge said the gas price crisis facing eastern Australia was the “direct result” of the export market exposing the Australian gas market to volatile international gas prices.
Australian Energy Council chief executive Sarah McNamara says wholesale price spikes aren’t likely to be passed onto consumers in the short term because power retailers are contractually obliged to smooth out supply costs.
“However, because there’s general upward pressure on prices, people will experience higher bills over the coming year,” she told ABC on Friday.
“We recommend that people pick up the phone and call their retailer and make sure they’re on the best and cheapest deal for their circumstances.”
Deputy Prime Minister Richard Marles on Friday told Nine’s Today the Albanese government wasn’t ruling out ramping up coal-fired power generation in the short term.
Opposition Leader Peter Dutton took part in the same program in an interview that quickly descended into a blame game between the two men over who was accountable for rising energy prices.
Mr. Dutton said the Albanese government — which has been in office for less than two weeks — was too inexperienced in dealing with the crisis.
“The public will get sick of this line coming out of the government: ‘The last government is to blame for everything’,” he said.
