Good news for SA as PM weilds stick on gas producers to increase production

AFTER the PM got gas producers to agree to meet peak demand, including during heatwaves, the state Opposition announced it would introduce a 10-year moratorium on fracking if it wins office.

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GAS producers have guaranteed there will be enough gas to meet peak demand, including during heatwaves, as the Prime Minister warned that Government wields “enormous power” to ensure companies comply.

At crisis talks in Canberra on Tuesday, the companies agreed to make more gas available to the domestic market as soon as possible and to revise their domestic forecasts.

Prime Minister Malcolm Turnbull said the Australian Energy Market Operator would produce an updated supply outlook based on the commitment, after its report last week warned of dire supply shortages.

“It is untenable, unacceptable to be in a position where domestic gas consumers — whether it’s generators, whether its businesses and industry or whether it’s families — cannot have access to affordable gas,” Mr Turnbull said.

Malcolm Turnbull at the roundtable with gas industry representatives in Canberra. Picture: Kym Smith

“Last week the Operator provided a projection that there would be a shortage of gas supply in the eastern market with big implications for energy security.

“Two of the east coast LNG exporters — AP LNG and QGC LNG — have given a commitment to being net domestic gas contributors. That is to say, they’ll be putting more gas into the domestic market than they’ll be taking out of it. The third — GLNG (owned by Santos) — has taken the matter on notice.”

When asked what the Government could do to ensure GLNG was not taking too much gas out of the Australian market, Mr Turnbull ominously warned that “the Commonwealth Government has enormous power in this area”.

“We have the ability to control exports, so what we’re seeking from the industry — and they understand the context in which their commitments are being sought - ... (are) commitments that ensure the domestic gas market is well supplied. That is fundamental,” he said.

Those at the meeting also discussed calls for state and territory governments to axe bans on gas exploration and development.

Victoria has just introduced a lifetime ban on onshore exploration.

The SA Liberal Opposition has announced that, if it wins Government at the 2018 state election, it would introduce a 10-year moratorium on fracking in the state’s South East.

Mr Turnbull said his Government would meet with the gas company representatives again in a month.