Australia is considering activating a last-resort power to limit gas exports to protect the east coast’s domestic supply after the consumer watchdog forecast a potential shortfall for this year’s winter.
Minister for Resources Madeleine King has issued a notice of her intention to consider using powers under the Australian Domestic Gas Security Mechanism (ADGSM) for the months of July, August and September.
She will consult with major gas producers over the next month about domestic supply and will make a decision on whether to use the ADGSM by mid-May.
If activated, the mechanism would empower Ms King to intervene and force liquefied natural gas projects to limit exports or find new gas sources.
The ACCC Gas report forecast Australia’s gas supply for the third quarter faces a possible shortfall of 12 petajoules, including a potential shortfall of 10 petajoules in July.
On Thursday, Ms King described the move as a “precautionary one” and insisted Australia’s domestic gas supply was secure.
“My decision to issue a notice of intent is a precautionary measure that gives me the flexibility to intervene if Australia is at risk of facing an energy shortfall,” she said in a statement.
“The notice does not place any limits on gas exports. Currently, Australia’s domestic market is well supplied with Australian gas.”The notice would ensure Australians remained the priority for energy suppliers, she said, if war ravaging the Middle East continued to cause supply disruptions.
“Australia remains in a strong position to ensure gas is available for Australians as well as for our international partners,” Ms King said.
“Australia remaining a reliable supplier of gas will help ensure Australia continues to receive the essential supplies we need from international partners.
“This measure is about ensuring the government has all tools available to assist Australians if we need to do so.
“I will continue to consult with gas producers and consult my ministerial colleagues and seek advice from my department, the ACCC and AEMO to determine whether Australia will remain well supplied before making a decision on whether to invoke the ADGSM.”
