Anthony Albanese says the federal government is talking with Western Australian gas producers to keep stocks up as the country teeters on the brink of an energy crisis.
Newly appointed Resources Secretary Madeleine King has involved Woodside and other major suppliers in discussing supplying liquefied natural gas to the eastern states.
A cold spell in southeastern Australia, coal-fired power plant shutdowns, the collapse of a gas supplier, and sanctions against Russia have all combined to spike the wholesale price of gas.
The spot price was already on the rise due to increased global demand as countries shifted from using Russian gas and coal in response to the invasion of Ukraine.
The local supply shortage has arisen despite Australia being one of the world’s largest producers of liquefied natural gas.
Camera icon Anthony Albanese has said the government is in talks with gas producers to bolster supplies. NCA NewsWire/Martin Ollman Credit: News Corp Australia
The prime minister said on Friday that some of the energy supply restrictions are “out of a government’s control”, but he blamed some of the blame on the coalition.
“What has happened to Russia and Ukraine and the resulting significant rise in world prices are beyond people’s control,” Mr. Albanian told ABC Radio Perth.
“But what the government had under control is that we have an energy policy, and we haven’t had an energy policy for nine years.”
He reaffirmed Labor’s support for Woodside’s Scarborough gas project off the coast of WA and said a “simple stop” position on fossil fuels would not meet the economy’s needs.
Mr. Albanese said Energy Secretary Chris Bowen was also in talks with the industry on easing immediate pressures on businesses and households.
Mr. Bowen said on Thursday that the Australian energy market was facing a “perfect storm” and warned that skyrocketing wholesale prices could not 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 Albanian Labor government will take all measures necessary to ensure continued reliability and affordability for the energy markets… based on expert advice,” he said.
Camera IconEnergy Minister Chris Bowen does not rule out special 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”, which would requisition gas destined for export to bolster local supplies.
He said introducing the emergency mechanism would not help in the short term, as it would not come into effect until January next year.
Another suggested option would be to introduce a national domestic gas reservation policy – similar to the one in WA – that requires some of the gas produced in Australia to be kept here.
Mr. Bowen does not rule out any special measures.
The national secretary of the Australian Workers’ Union, Daniel Walton, has called on the Albanian government to pull the trigger immediately.
“Yes, it won’t go into effect until January, but manufacturers who are on top of it can tell investors that some relief is on the way,” he said.
Mr. Walton said the government could not rely on negotiations with gas companies unless they guarantee affordability.
Camera IconThe national secretary of the Australian Workers’ Union, Daniel Walton, has warned the government that it must rely on gas producers to solve the crisis. Grant Wells. Credit: Included
Australia Institute chief adviser Mark Ogge said research by the progressive think tank found that domestic gas consumption was dwarfed by the amount of gas produced for export.
“Australia has no problem with the gas supply; it has a gas export problem. Eighty percent of Australia’s gas is exported,” he said.
“The idea of a gas shortage is a joke, but the only ones laughing are the gas managers – to the couch.”
Mr. Ogge said the gas price crisis in Eastern Australia was the “direct result” of the export market exposing the Australian gas market to volatile international gas prices.
Sarah McNamara, chief executive of the Australian Energy Council, says spikes in wholesale prices are unlikely to be passed on to consumers anytime soon, as energy retailers are contractually obligated to smooth out delivery costs.
“However, as there is general upward pressure on prices, people will see higher bills in the coming year,” she told ABC on Friday.
“We recommend that people pick up the phone and call their retailer and make sure they have the best and cheapest deal for their circumstances.”
Deputy Prime Minister Richard Marles told Nine’s Today on Friday that the Albanian government does not rule out the possibility of more coal being generated in the short term.
Opposition leader Peter Dutton took part in the same program in an interview that quickly degenerated into a guilt contest between the two men over who was responsible for rising energy prices.
Dutton said the Albanian government – which has been in office for less than two weeks – is 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.
