SYDNEY—Australia’s minister for resources said March 19 that the government would take action to avert an energy shortage if big natural gas producers did not boost supply for the country’s domestic market.
Australia is on track to become the world’s largest exporter of LNG, yet its energy market operator has warned of a domestic gas crunch beginning in 2019 that could trigger industry supply cuts and broad power outages.
Major gas producers, including ExxonMobil Corp. and Royal Dutch Shell, who have large export contracts, made guarantees to the government during last week’s talks that natural gas would be available for the domestic market.
“If the commitments are not met, if we don’t see more gas, we’ll act; we’ll take decisions in our national interest to secure our nation’s energy supplies,” Resources Minister Matt Canavan told the Australian Broadcasting Corp.
Australia’s power supply problems made international headlines last week when Tesla Inc. CEO Elon Musk offered to save South Australia, the country’s most renewable-energy dependent state, from blackouts by installing large-scale battery storage.
Manufacturers have long complained of tight gas supplies and soaring prices as producers have focused on supplying gas to LNG plants that have locked in 20-year export contracts. Restrictions on drilling coal seam gas have added to supply constraints.
Producers blame state drilling bans, uncertainty over Australia’s climate policy and, more recently, potential increases in petroleum producer taxes, for deterring development of new gas fields.
Canavan, who did not elaborate on what action would be taken, said the companies had given strong commitments to the government.
“This is what every nation around the world would do. The gas industry understand that. That’s what we need to see delivered,” he said.
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