Australia’s competition watchdog has been directed to monitor the liquefied natural gas industry as part of efforts to force more transparency in the gas market, with the government expressing concern current supply guarantees from the industry are insufficient.
Malcolm Turnbull said at the conclusion of talks with gas chiefs in Canberra on Wednesday the Australian Competition and Consumer Commission had been directed to use its inquiry powers to compel the gas industry to provide information that would “shine a light on transactions with the Australian gas market and help it operate more fairly and efficiently”.
The monitoring regime will run over the next three years and the ACCC will produce six-monthly public reports examining the state of the gas market.
The prime minister said in a statement the government remained concerned “that the east coast export LNG operators have not yet clearly articulated how Australian households and business will get adequate supply at reasonable prices”.
“The government has asked the exporters to provide further information, in the context of possible regulatory options to address the short-term market issues.”
Wednesday’s talks in Canberra follow an emergency meeting in mid-March where the prime minister warned the LNG industry he would use the commonwealth export powers “in the national interest” if the companies did not deliver explicit guarantees of more supply to the domestic market.
The ongoing discussions between the government and the LNG industry were triggered by a public warning from the Australian Energy Market Operator earlier this year that there would be shortages of gas domestically by next summer if the government failed to intervene.
The AEMO attended Wednesday’s discussion, which included the prime minister and three cabinet ministers.
In a separate statement, the treasurer, Scott Morrison, said imposing monitoring on the industry would allow the ACCC to compulsorily acquire information, providing the government and the public with a complete picture of how the gas market operates, including prices and volumes.
“The ACCC will be able to identify impediments to efficient supply and where the use of market power may exist – and propose measures to address any issues found,” Morrison said.
“This monitoring will hold the gas suppliers to account with respect to their commitments to make more gas available to the domestic market and LNG exporters with respect to their commitment to be net domestic gas contributors.”
The government has signalled it could be open to facilitating gas swaps, in which export contracts are fulfilled using overseas gas, to reserve more product for Australia’s domestic supply.
