Malcolm Turnbull says Australia's gas shortage is 3 times worse than anyone thought - but won't block exports just yet

Australian prime minister Malcolm Turnbull. Photo: Glenn Hunt/ Getty Images.

Australian prime minister Malcolm Turnbull will meet with the bosses of the country’s major gas exporters in a bid to secure more supply for the domestic market after the ACCC’s report into the problem found that the local shortage in 2018 is enough power 55 cities the size of Wollongong.

The ACCC released its government-commissioned report into a looming shortage in east coast gas supply today, confirming that gas exports are the cause of the shortfall, that consumers and businesses face much high gas prices next year and that the problem could be so bad, the shortfall would be enough to power a city with a 2.2 million population.

The prime minister said he was prepared to act on several fronts, attacking the states for blocking gas exploration – a challenge singled out in the ACCC report – saying it was the biggest long-term problem. He is also prepared to introduce the government’s previously threatened export restrictions.

“We will not let the power bills of Australians rise further and further because of a shortfall of gas on the east coast of Australia,” Turnbull said.

“We are determined to ensure and we will ensure that that shortfall — which we’ve been advised of today is three times bigger than we thought it would be six months ago — is not going to occur.”

The prime minister said he would write to state premiers and the Northern Territory chief minister, asking them to end moratoriums on gas exploration in their states.

“The fact is the development of these onshore gas resources is very much in the hands of the states — they have failed,” he said.

Treasurer Scott Morrison has already threatened state and territory governments with cuts to GST payments if they continue to block gas exploration.

Coal seam gas exploration in NSW, Victoria and the Northern Territory has been a controversial and politically sensitive issue for those governments, who announced exploration bans ahead of going to the polls. Victoria legislated a ban on fracking, while there is a moratorium in NSW, plus a range of exclusion zones for exploration. Earlier this year, Victoria extended its moratorium on conventional onshore gas exploration until 2020.

Turnbull said that whether the government introduces export restrictions will depend on whether the gas companies come to the party in reserving supply for the domestic market.

“If we are not able to receive the assurances from the industry to our satisfaction and that of the ACCC, then we will impose those export controls,” he said

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