Industry Minister Ed Husic says government interventions forcing gas companies to ensure consistent domestic supply should be able to be triggered by price.
After the government announced plans earlier this week to extend the so-called gas trigger mechanism until 2030, Mr Husic said reforms were needed to on how the trigger could be pulled.
The minister said a price trigger to ensure supply would help crack down on gas companies, as well as mitigate supply amid global factors.
“These conditions are going to last for a while, they’re largely being shaped by international events, notably Russia’s improper and illegal invasion of Ukraine,” he told ABC Radio on Wednesday.
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“They will shape prices in a way that I think will continue for quite some time, looking at current conditions, and we do need to be prepared for that.”
The government also announced it would issue a notice of intent to invoke the gas supply mechanism from next year.
It comes after the release of a report by the Australian Competition and Consumer Commission, which revealed a gas shortfall would occur in 2023 if all excess gas produced by exporters was sent overseas.
Mr Husic said action was needed to help reform the sector, in a bid to stop producers briefly solving supply issues, only for them recur a short time afterwards.
“We’re getting to a point where we’re going to have to take hard action in activating the trigger and reforming it in a way that allows us to activate it on the basis of price,” he said.
“We have to put in sharp focus what is going on right now … we are a country with a lot of reserves in gas, we think it should be available for use.”
The minister said he had been concerned with the larger increases in gas prices, indicating companies had a corporate responsibility.
“I have been concerned that they’ve ignored their social licence, and I think that that would be a poor reflection on them,” he said,
“If we had to activate a legislative response to deal with this situation, then it will show you how far they’ve slipped.”
Mr Husic said a country such as Australia with large amounts of gas in reserves should be available for use, particularly after warnings of shortages.
“(It) is just nuts when you think about the fact we have so much of his resources,” he said.