Turnbull wins with gas producers as Tony Abbott maintains pressure – October 2017

Filed under: Politics, Australian Politics, Trade and industry, Energy,

Prime Minister Malcolm Turnbull continues to nag the major gas suppliers about shortages on the east coast but finds himself under growing pressure to act rather than talk.

In his latest meeting with the major gas producers the Prime Minister appears to have secured a guarantee they will reserve sufficient gas from exports to cover the predicted shortfalls in 2018 and 2019, thus averting the implementation of new powers the Government gave itself earlier in the year to block gas exports. .

The Fairfax papers reported: “An imminent crisis in the availability of gas has been averted, Prime Minister Malcolm Turnbull has claimed, after gas producers agreed to increase supply to the local market and to improve transparency on prices.

“The three major gas producing companies – Santos, Origin and Shell – agreed to provide enough gas to cover a predicted shortfall in 2018 and 2019 at a meeting with Mr Turnbull, Deputy Prime Minister Barnaby Joyce and Energy minister Josh Frydenberg in Sydney on Wednesday.

“That agreement with the firms was enough to stop the Turnbull government from pulling the trigger on its controversial powers to limit gas exports.

“Under the deal, which will be the subject of another meeting next week, the companies have also agreed to regularly report to the Australian Competition and Consumer Commission on their sales, as well as offers by the companies to sell gas and the reasons why they have rejected bids to buy gas.”

The Daily Telegraph, a News Corp paper, was not so nuanced: “The country’s biggest gas companies yesterday agreed to put Australians first and boost domestic supply in a major victory for Prime Minister Malcolm Turnbull.

“Amid growing concern over the prospect of an energy crisis, the bosses of Origin Energy, Santos and Shell guaranteed they will offer enough gas to cover an expected shortfall next year, after a meeting with Mr Turnbull.

“It means the federal Government won’t have to follow through on its threat to restrict exports, though Deputy Prime Minister Barnaby Joyce warned that option was still on the table if shortages continued to be a problem.”

There is growing speculation that Mr Turnbull will have to take decisive action on energy policy before the end of this year to quell the divisions within the Coalition. These have been heightened by former prime minister Tony Abbott’s public declaration that he would cross the floor in Parliament to vote against a clean energy target, as proposed by the Finkel review of the energy sector.

The target is the only Finkel recommendation not endorsed by the Government. Mr Abbott has described it as “unconscionable”.

Auditor-General Grant Hehir has added to Mr Turnbull’s woes with a scathing report on the PM’s flagship $1.1 billion innovation agenda, saying it was poorly designed and lacked evidence to support its claims about economic growth

Mr Hehir criticised the policy's foundations, and attacked the quality of advice from the public service that underpinned the policy, which was announced in December 2015 – less than three months after Mr Turnbull became Prime Minister.

The Age reported: “In a report that reads as if it could be a script for the ABC television public service satire Utopia, the Auditor-General said: “The policy logic that can be inferred from this model is that: if the proposed actions are taken, they will reduce the barriers, which will move Australia towards the vision, which in turn will help achieve the objective of increasing productivity and diversifying the economy”.

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