Cashed-in gas companies are slammed as Australia faces dire shortage as ‘greedy’ exporters send $70 billion worth of supplies abroad
Australian gas exporters have made huge profits as global energy prices soar
But a new report predicts a domestic gas shortage of up to 10 percent next year
Albanian government warned LNG giants to ‘do the right thing by Australians’
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Anthony Albanese is on the cusp of taking over Australia’s wealthy gas companies as exporters are accused of sending all our supplies overseas as we grapple with severe shortages.
A report from the Australian Competition and Consumer Commission on Monday predicted a significant gas shortage next year that will push rising energy prices further.
LNG giants that have brought in $70 billion in exports this fiscal year are warning of sweeping sector reforms if the deficit of up to 10 percent of domestic demand is not closed.
Treasurer Jim Chalmers said the competition watchdog’s latest gas research report highlighted some “alarming” features of the East Coast gas market.
LNG exporters have seen a windfall in profits as global energy prices soar (Photo: Curtis Island, Queensland LNG Project)
“It predicts a significant gas shortage for next year unless gas producers supply more of their uncontracted or surplus gas to the domestic market,” he said.
The report, released Monday, said the shortage would occur in 2023 if all the excess gas produced by exporters were sent abroad.
It predicted the shortfall would occur amid rising demand and an increase in uncontracted gas, which would likely be sold offshore at higher prices.
The report said the gap would be worse than it was in 2017, when both the ACCC and the Australian Energy Market Operator forecast shortages for the following year.
That led the then-coalition government to initiate the domestic gas security mechanism process and eventually strike a deal with gas exporters to make excess gas available in Australia before it was sold overseas.
Albanian government has warned gas exporters after a domestic deficit was forecast
The Albanian government is completing its own overhaul of the trigger for the domestic gas security mechanism following the energy market crises earlier this year.
It has so far reserved its decision to pull the throttle, forcing exporters to set aside the resource for domestic use.
But industry sources reportedly expect it to be withdrawn in the coming months as the Albanian government ramps up its rhetoric against the gas companies.
Mr Chalmers said the government took the report’s findings seriously and would respond to the ACCC’s investigation.
“The (ACCC) findings are very worrying and I urge gas producers to do the right thing by Australians,” said Dr. Chalmers.
“It is critical that our domestic gas supply is secure and competitively priced, especially when households and businesses are under extreme pressure.”
A showdown could be looming, however, as acting chief executive of the Australian Petroleum Production and Exploration Association Damian Dwyer recently said Mr Albanese should fall back on “irresponsible calls to intervene in our gas export market”.
The shortfall could further drive up household gas bills and costs for gas-dependent businesses (file image)
Black coal generation in NSW and Queensland fell to its lowest level ever in the second quarter following coal-fired power plant outages and fuel restrictions, the Australian Energy Market Operator said.
Wholesale East Coast gas prices more than tripled in the second quarter, to an average of $28.40 per gigajoule compared to $8.20 in the same quarter last year, the operator revealed in its quarterly report.