The Federal Government has been urged to consider intervening in the energy market ahead of a projected east coast gas shortfall for 2023.
A new report, released today by the Australian Competition and Consumer Commission (ACCC), noted Australia had more than enough gas reserves to supply the domestic market, but the majority was currently produced for export overseas and never reached Australian consumers.
Also read: Australia's southeast faces gas crunch
The shortfall for 2023 is expected to be a massive 56 petajoules (PJ), roughly 10 per cent of domestic demand and more than 25 times the nominal shortfall for 2022 predicted in last year’s report.
“The east coast of Australia could face a shortfall of 56 PJ in 2023,” a release from the consumer watchdog said.
“At the same time last year, our Gas Inquiry interim report found 2022 could face a 2PJ shortfall."
Noting the projected deterioration in market conditions, ACCC chair Gina Cass-Gottlieb encouraged the Government to activate the Australian Domestic GAS Security Mechanism - or gas trigger.
“Our latest gas report finds that the outlook for the east coast gas market has significantly worsened," Cass-Gottlieb said.
“To protect energy security on the east coast, we are recommending the Resources Minister initiate the first step of the Australian Domestic Gas Security Mechanism.
“We are also strongly encouraging LNG exporters to immediately increase their supply into the market.”
Activating the trigger would allow the Minister for Resources, Madeleine King, to intervene in the gas market by imposing export controls, ensuring sufficient supply was made available to meet domestic demand.
The Government had not yet formally responded to the ACCC’s recommendations, but Treasurer Jim Chalmers issued a statement, saying the Government took the report’s findings seriously and had urged gas producers to do the right thing by consumers.
"The ACCC's latest gas inquiry report highlights some alarming features of the east coast gas market," Chalmers said.
"The Government takes these findings extremely seriously and will shortly respond to the ACCC's recommendations.
"I urge gas producers to do the right thing by Australians."
With consumer inflation rising 6.1 per cent over the 12 months to June 2022, and gas prices up more than 60 per cent since last year, the Government is under immense pressure to ward off any further financial pain for Aussie households.