Malcolm Turnbull is dragging in gas companies to talk about Australia's 'energy crisis'

Malcolm Turnbull. Photo: Stefan Postles/ Getty Images.

Prime Minister Malcolm Turnbull has called an urgent meeting of big gas producers to try and avert an eastern coast “energy crisis”.

Speaking at The Australian Financial Review Business Summit in Sydney on Thursday, Mr Turnbull said he was concerned by the latest report by the Australian Energy Market Operator that showed there could be both gas and electricity shortages within the next few years.

Mr Turnbull said Australia was in danger of losing its competitive advantage in energy with electricity prices doubling in the past decade and the grid struggling to cope with the influx of renewable energy such as wind and solar.

The Prime Minister took aim at the state Labor governments, especially the Victorian government, about bans on on-shore gas exploration.

“We are facing an energy crisis because of this restrictions on gas,” he told the summit. “What we have now is a scarcity of gas driven by politics because state governments are not allowing exploration and development of onshore gas.

Absurd position

“The Victorian government, in the absurd position of a 50 per cent renewable target, has encouraged the closure of Hazlewood [power station]. They’ve seen that closed at the same time that they will not allow the development of gas resources in their boundaries. We need to have more gas, which will deliver more opportunities for industry and households.”

Mr Turnbull said he was bringing together the chief executives of east coast gas companies to have a “serious discussion” with the bulk of gas being sent overseas in LNG.

“We must think very carefully about how we manage our electricity system,” Mr Turnbull said. “In a rapidly changing market we must be keeping the lights on.”

Big energy producers and users have called for an emissions intensity scheme for the electricity sector to bring down carbon emissions and provide certainty in the NEM.

Born of necessity

Some industrial users have threatened to close down and move overseas because of a scarcity of gas or high prices threatening their competitiveness.

But Mr Turnbull sidestepped the issue of an EIS saying the bigger question was the availability and the price of gas.

“Adhering to a particular technique is easy to do… but what you need to do is deliver an outcome. If the answer [from an EIS] is close down coal and move to gas, where is the gas?,” he said.

“The gas issue is a very, very big one.”

The Prime Minister also used his speech to the summit to reaffirm the Coalition’s plans for budget repair. In a speech emphasising the need for returning the budget to surplus, Mr Turnbull said fiscal repair was “not an ideological goal” but was “born of necessity.

“Fixing the budget is fundamental to raising living standards and productivity,” Mr Turnbull said.

Warning that it would be immoral to dump “mountains of debt on the shoulders” of younger Australians, Mr Turnbull noted that intergenerational reports have been warning for years that spending growth is too high.

Mr Turnbull also reaffirmed his government’s commitments to cut company tax saying it was still a priority for the Coalition.

This post originally appeared on the Australian Financial Review. Read the original here, or follow the AFR on Facebook.

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