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Turnbull calls emergency gas meeting

Prime Minister Malcolm Turnbull has called a meeting of east coast gas companies following the release of a dire report from the Australian Energy Market Operator (AEMO).

The report from AEMO predicts that gas-fired power stations in New South Wales, Victoria and South Australia will suffer from gas shortages in 2018-19 and 2025, which the Prime Minister has labelled “very concerning”.

“That’s why I’ll be urgently calling the chief executives of the east coast gas companies together to explain how they plan on addressing this threat to their customers,” said the Prime Minister.

“I again call on the states to lift their restrictions on gas exploration and development.

“We are facing an energy crisis in Australia, because of this restriction on gas.

“You can have all of the economic mechanisms, market mechanisms, you like but they’re only as good as the assumptions you feed into them.”

The Prime Minister’s sentiments were echoed by the Minister for the Environment and Energy Josh Frydenberg who urged stares to follow Queensland’s “creative” solution to provide more gas to the local industry.

“I’ve recently seen what has happened in Queensland where that state government has offered a tenement for companies to invest in on the condition that that gas is supplied domestically,” Mr Frydenberg told ABC Radio.

“That’s quite a creative way forward because it doesn’t introduce the possibility of sovereign risk because it doesn’t affect existing investments but it does encourage further investment to supply the domestic market.”

In the short term, AEMO has identified a range of potential industry responses that could mitigate both electricity and gas supply shortfalls, however notes that these responses rely on appropriate market signals, and may be impacted by considerations such as the retirement of coal-fired generators, and the direction of energy policy such as the existing moratoria on various gas developments across eastern Australia.

The long-term outlook identifies that early investment in exploration and development programs will be needed to bring uncertain and undiscovered resources to market in time to meet forecast increases in demand for gas.