"The Government's decision to move towards gas export controls in response to shortfall warnings by the ACCC is absolutely necessary. It is also a terrible choice to have to make given the current global energy crisis driven by Russia's invasion of Ukraine. And if anything today's ACCC report undersells the gravity of our situation. More difficult choices lie ahead," Ai Group Chief Executive Innes Willox said today.
"It was always going to come to this but it doesn’t fix the underlying issues.
"We should use all other options to ensure the shortest and lightest reliance on export controls. Urgent action to cut our local reliance on gas and shore up supplies is badly needed. Vulnerable energy users should be supported.
"The Government’s intention to invoke the ADGSM is indeed necessary, but also deeply troubling and insufficient.
"It is necessary because the absolute shortfall it was designed to address is now a very real prospect. But holding back gas from international markets will increase global economic pain and worsen the perils facing our allies.
"Australia must safeguard our energy security but the less we need to rely on export cuts, the better.
"The ADGSM is also insufficient, both because it is hard to use in its current form – the ACCC believes that all the export cuts would fall on the one 'LNG project with the least amount of excess gas' – and because reducing the risk of shortfall will still leave gas prices at extremely painful levels.
"Prices are likely to be high despite these policy responses, and gas demand reduction will take time and be unevenly distributed. In the short term especially, vulnerable business and household energy users will need financial help. More and more will be in this position as their old energy contracts expire.
"The Federal Government is taking a difficult decision today, but more are coming. Getting out of this gas crisis will require all of us to recognise the dangers we face, and act on them," Mr Willox said.
Tony Melville – 0419 190 347