Winter energy crisis looms: Australia considers gas trigger to protect local gas supply

The Government has warned Australia could face shortages of gas over winter as the Resources Minister says she’s considering using the gas trigger to keep gas on home soil.

Madeleine King has given notice she could exercise powers to force gas giants which typically prioritise international exports, to divert a larger share of their supply to the domestic market.

It marks the latest escalation of the government’s response to implications from the US-Iran energy war and came hours after Prime Minister Anthony Albanese gave a national address on the crisis.

Ms King said in a statement on Thursday that there could be a deficit of 12 petajoules for the third quarter, and warned 10 petajoules of that shortage could occur as early as July.

The projection, based on the recently released ACCC Gas report, has prompted her to open a consultation period with gas giants across the next month .

She will request information over their supply before formally deciding to use the Australian Domestic Gas Security Mechanism.

“As we head into the winter months, the Government is taking action to be prepared to face challenges,” Minister King said.

“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.

“The notice does not place any limits on gas exports. Currently, Australia’s domestic market is well supplied with Australian gas.

“The notice of intent ensures Australians will be a priority for energy supplies during the period of disruption caused by the conflict in the Middle East.”

The Government has reformed the trigger in 2022 after the Russian invasion of Ukraine, so it could be rolled out more swiftly if needed.

While the ACCC report projects the east coast gas market will experience a supply gap, both Western Australia and the Northern Territory are expected to maintain sufficient levels.

WA has a Domestic Gas Reservation Policy which requires major offshore gas exporters to reserve 15 per cent of their production specifically for local use.

It comes as Mr Albanese is expected to fly into Singapore, and possibly Malaysia, after the Easter break to shore up fuel supply agreements from Australia’s oil exporting neighbours.

Singapore’s Energy Minister Tan See Leng was also in Canberra on Wednesday after the two nations signed an agreement to continue their exchange of refined fuels and LNG.

Foreign Minister Penny Wong also met with Dr Tan and said several ministers across portfolios were engaging with international partners to try to shield industries from the implications.

“Dr Tan and I discussed the critical importance of keeping trade flows open and supporting continued movement of essential supplies like LNG and diesel,” she said.

“We also discussed practical steps to strengthen energy supply resilience in our region, including better coordination and information sharing to respond to any disruptions.

“Australia and Singapore want to strengthen our collective energy resilience and accelerate work on arrangements that support the trade of essential supplies.”

Singapore is considered a critical fuel partner for Australia, acting as a major supplier of refined petrol, diesel, and jet fuel, with over 80 per cent of this country’s supplies imported from Asian refiners.

Government sources have confirmed the Prime Minister is intending to head to south-east Asia at some point after the Easter long-weekend, but insist final plans are not yet “locked in”.