Gas stakeholders to let off steam
The Morrison government will hold a roundtable with major gas producers and users on Thursday aimed at thrashing out a code of conduct.
The Morrison government will hold a roundtable with major gas producers and users on Thursday aimed at thrashing out a code of conduct as tensions simmer over the prospect of commonwealth intervention in the energy market.
More than 20 suppliers, major consumers and industry groups have been invited to the meeting which follows the government’s gas-fired recovery policy where it laid out the biggest shake-up of Australia’s east coast energy market in decades to fire the nation’s economic recovery and support the manufacturing sector.
The Morrison government in September said big producers should aim to better meet the needs of commercial and industrial customers through an industry-led code of conduct. If they fail to agree on a shared pact by February, the federal government will consider stepping in and enforcing a mandatory code.
Big manufacturers such as Incitec Pivot complain they are unable to strike competitive long-term deals for gas to supply their plants, placing them at a disadvantage to international rivals. Incitec said on Tuesday it had abandoned a tendering process launched earlier this year to win a long-dated gas contract extending beyond 2022, but hoped the federal government would make good on promises to drive down domestic gas prices.
Energy Minister Angus Taylor and Resources Minister Keith Pitt will chair the code of conduct meeting with the Australian Competition & Consumer Commission also to attend and monitor talks between the sides.
The code discussions are among a raft of measures rolled out by Canberra to help boost supply and lower gas prices amid frustrations that Australian users can’t get cheap energy despite its huge reserves.
Other more controversial measures include pending talks with industry to “strengthen price commitments” as it looks to negotiate a new heads of agreement with Queensland gas exporters to ensure enough supplies are in place locally and a domestic gas reservation scheme.
Mr Taylor is expected to tell participants in the code-of-conduct meeting to negotiate in good faith.
“The code must be industry-led and negotiated in good faith by both sides. Promising signs of this have already emerged and I encourage you to keep going,” Mr Taylor will say on Thursday.
Mr Pitt will tell the meeting the two sides need to recognise the correct balancing act.
“I have consistently said that we need to strike a balance as a government — between ensuring that we have gas that is affordable and a gas supply that is secure — while also providing a sufficient price for producers that will encourage them to bring on new gas supplies,” he will say.
Australia’s big oil and gas producers have said there is no domestic supply shortage.