Australia’s state, territory and federal government ministers are meeting Wednesday to discuss a worsening gas crisis. Prices have soared by up to 400%. Analysts have said they would be even higher if the regulator, the Australian Energy Market Operator, had not intervened to impose price caps.
Major manufacturers have warned that thousands of jobs were at risk unless supplies of Australian gas earmarked for export were held back for domestic consumption.
That would require the government to pull the so-called ‘gas trigger’ that would divert supplies. However, analysts believe that could damage Australia’s reputation as one of the world’s leading exporters of natural gas.
Various factors have caused gas shortages in Australia, including unprecedented wet weather and a recent cold snap in eastern Australia.
Russia’s invasion of Ukraine in February has prompted a surge in demand for fossil fuels.
There have also been outages at ageing local coal-fired power stations.
Australian Treasurer Jim Chalmers told Australian television there was a “perfect storm of conditions.”
“Some of the generators are offline, we have had some flooding, we have got some international difficulties, of course. But sitting over the top of that is the cost and consequences of almost a decade now of energy policy chaos, and what we want to do by implementing our Powering Australia plan is to introduce some certainty and some resilience into the energy markets,” he said.
Many homeowners are bracing for higher-than-normal winter power bills. Australia is generally a warm to hot country, but last year Canberra, the national capital, shivered through its coldest winter morning of -6.0 °Celsius.
Analysts have said the gas shortage affects mostly the highly populated east coast, including Sydney, the largest city. In Western Australia, resources companies must reserve 15% of gas supplies for local use.
In the longer-term, business and community groups have urged Australia’s political leaders meeting Wednesday to agree on “a speedier move” away from natural gas to renewable sources of energy.