A major report into Australia’s gas supplies predicts a significant shortfall next year as spiking energy prices heap cost-of-living pressure on household budgets.
Treasurer Jim Chalmers says the latest gas inquiry report from the competition watchdog highlights some “alarming” features of the east coast gas market.
“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 Australian Competition and Consumer Commission report, released on Monday, said the shortfall would occur in 2023 if all the excess gas produced by exporters was sent overseas.
It foreshadows the shortage will occur amid rising demand and an increase in uncontracted gas, which will likely be sold offshore at higher prices.
The report said the shortfall 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 (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.”
The shortfall prediction comes after coal generation in NSW and Queensland hit record lows, putting pressure on other energy sources.
Black coal generation 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.
The government has reserved its decision on pulling its gas trigger to force exporters to set aside the resource for domestic use.
Mr Chalmers said the government took the report’s findings seriously and it would respond to the ACCC’s inquiry.
© AAP 2022
