Turnbull blames state governments for gas crisis

Malcolm Turnbull blames state governments for gas crisis


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Prime Minister Malcolm Turnbull speaks to the media on arrival at Parliament House in Canberra ahead of a meeting with gas executives on Wednesday 15 March 2017. Photo: Andrew Meares  Photo: Andrew Meares

Prime Minister Malcolm Turnbull speaks to the media on arrival at Parliament House in Canberra ahead of a meeting with gas executives on Wednesday 15 March 2017. Photo: Andrew Meares Photo: Andrew Meares

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Prime Minister Malcolm Turnbull says national leadership is required to avert a looming gas crisis in Australia.

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Prime Minister Malcolm Turnbull has lashed the states and territories for what he has called a looming energy crisis, saying they had "locked up" resources and favoured lucrative overseas exports, leaving families facing shortages.

Mr Turnbull has summoned energy industry bosses to Canberra on Wednesday. Ahead of the crisis talks, he warned the federal government retains significant powers over exports, and could intervene further in coming months.

"It is not acceptable for Australia shortly to become the world's largest exporter of liquefied natural gas to not have enough gas for its own families and its own businesses," Mr Turnbull said.

As the federal government's anger over South Australia's plan to go it alone in energy policy grows, Energy Minister Josh Frydenberg demanded state governments follow a federal lead to ensure homes and businesses aren't left without adequate gas supply.

Mr Frydenberg also said he had sought seek legal advice over South Australia's $550 million plan to go it alone, which he said was a possible breach of national rules.

Mr Turnbull promised the Coalition would provide leadership to resolve the situation.

"Australians are entitled to expect they will have access to the gas they need and at prices they can afford, whether it's for their homes or in their businesses," he said.

"Thousands of jobs depend on secure, reliable and affordable gas. It is not acceptable for Australia, shortly to become the world's largest exporter of liquefied natural gas, to not have enough gas for its own families and its own businesses."

The Prime Minister said looming domestic shortfalls, coming amid record overseas exports of Australian gas, had been created by state government policies.

He singled Victoria and South Australia - which both have Labor governments - out for criticism.

"The worst example is Victoria," Mr Turnbull said.

"In Victoria, where there is a huge amount of gas, and, indeed, there is still a very large offshore gas resource in Bass Strait, but there is also an enormous amount of gas onshore that can be accessed by conventional means, without fracking."

"I can say that the gas companies - I have no doubt - are very well aware they operate with the benefit of a social licence from the Australian people and they cannot expect to maintain that if while billions of dollars of gas are being exported, Australians are left short."

States including Victoria and South Australia had pursued massive renewable objectives without back-up plans, Mr Turnbull said.

"That type of sleep-walking into an ideological energy policy has created in South Australia, where Jay Weatherill has had to provide a $500 million - half a billion dollars - an apology note for a electricity system that he said was a grand experiment and perfect and world's best, only a few months ago.

"What he's doing is playing a very expensive game of catch-up for his own failures."

Mr Weatherill announced a new energy package worth $550 million on Tuesday, designed to tackle blackouts faced by his state. The package includes $150 million for 100 megawatts of battery storage for renewable energy, the largest in Australia; $360 million for a new gas power plant and new laws to give the state the power to override the Australian Energy Market Operator.

Mr Frydenberg told ABC radio said many gas reserves in Australia remained undeveloped, in part because of state government imposed exploration bans.

"What we've heard from the Australian Energy Market Operator is that there will be a shortfall of gas in both South Australia, NSW and Victoria from 2018-19 onwards.

"We would like to see these reserves developed faster and we stand ready to assist them. They also have existing reserves and supplies that they could release into the domestic market," he said.

Mr Weatherill blamed the Turnbull government for allowing the national energy market to break.

"The reason it's broken is because the obvious policy response is being destroyed by a bunch of right-wingers in the federal parliament who love coal and hate renewables.

"What we're doing is making the national energy market work for South Australia," he said.

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