Turnbull, Shorten spar over government's decision to restrict gas exports

The Turnbull government will restrict gas exports to alleviate domestic shortages, as Labor calls for proof that prices will drop.

Prime Minister Malcolm Turnbull (centre), Industry Minister Arthur Sinodinos (left) and Minister for Resources Matt Canavan address the media on April 27

Prime Minister Malcolm Turnbull (centre), Industry Minister Arthur Sinodinos (left) and Minister for Resources Matt Canavan address the media on April 27 Source: AAP

Labor leader Bill Shorten is questioning whether new federal government restrictions on gas exports to prevent domestic shortages are merely "hot air".

The opposition was responding to what the Prime Minister Malcolm Turnbull has labelled as a short-term solution to the looming gas supply problems.

Resources Minister Matt Canavan will have the power to limit how much gas can be exported in the event of a domestic shortage.

"The longer term solution is more gas. In the short time I have to protect Australian jobs," Mr Turnbull said on Thursday.

"In Victoria, where there is a huge amount of gas, you have a Labor government, which will not allow even conventional gas exploration and development."
Mr Turnbull said the latest measure would protect 65,000 jobs in gas-dependent industries and bring Australian gas prices in line with the global market.

Domestic gas prices on the east coast are substantially above those on offer for exported gas overseas, despite Australia being on track to become the world's biggest exporter on LNG.
Mr Turnbull said domestic prices were sometimes four or five times more than those on offer in the US.
"People are being offered prices of $20 a gigajoule (in Australia). It should be around half of that, or less."

Mr Shorten seized on that claim, calling for confirmation prices would in fact halve from July 1.

"Without the gas companies confirming that, what Mr Turnbull is saying is just hot air," he told reporters outside Melbourne.
The Australian Industry Group described the announcement as appropriate and welcome.

"We are hopeful that the government's intervention will see the gas supply and price crisis ease in the near future - and that these steps will also take pressure off electricity prices," chief executive Innes Willox said.

However, the Grattan Institute's energy program director Tony Wood doubts domestic prices will return to where they were five or so years ago.

The government's latest moves follow two meetings between gas industry bosses and the prime minister in Canberra.

Senator Canavan stressed gas companies would be able to choose how they respond to the intervention, including through swaps - where gas could be found elsewhere in the world to meet contractual needs in Asia.

And if shortfalls don't emerge the government would not need to activate the new rules, which he said would be the ideal situation.

Gas producer Santos will seek clarification of how the new policy will work in practice.

"Santos will work collaboratively with government and its joint venture partners to ensure an outcome in the best interests of its shareholders," it said in a statement.

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3 min read
Published 27 April 2017 11:26am
Updated 27 April 2017 5:59pm
Source: AAP


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