Federal Resources Minister Madeleine King has warned there may be little the government can do to reduce soaring wholesale gas prices in the short-term.
Ms King has been urging the chief executives of Australia's biggest gas producers to get more supply into the domestic market, which could lead to cheaper wholesale spot prices.
"I am assured by them that they are doing everything they can — both maximising production in their plants and seeking to maximise supply into New South Wales and Victoria," Ms King told the ABC.
On Sunday, Nationals leader David Littleproud said gas companies were unlikely to cooperate with the new resources minister, arguing Labor had been "demonising" them for nine years while in opposition.
But Ms King said the chief executives were working in good faith and were open about some of the challenges the sector faced, such as a pipeline from Queensland running at 98 per cent capacity.
"There is not much more they can provide, to be honest, and I have every reason to believe what they tell me," Ms King said.
Wholesale energy costs on the east coast have been pushed up by a cold snap, ageing coal-fired power stations going offline, and a surge in demand for fossil fuels after Russia's invasion of Ukraine.
The Australian Energy Market Operator has already intervened and told gas producers to ensure supply to power generators to avoid a shortfall.
A $40 per gigajoule price cap has already been imposed after wholesale prices were expected to hit around $382, although that figure is still crippling for many manufacturers.
'My discussions are not threats': Gas trigger still an option
Ms King said the federal government was still considering whether to pull the so-called gas trigger — forcing exporters to divert more supply to the domestic market.
That option was discussed with the chief executives, although the government insists it is not a short-term solution and would only apply from January 1.
Opposition Leader Peter Dutton said the government was making excuses rather than acting.
"They told the Australian people before the election that they were the party with answers to all these problems, it turns out they don't have the answers," Mr Dutton said.
Santos expansion welcomed amid push for more supply
Gas giant Santos has also announced it will expand its operations in the Cooper Basin, which spans the South Australian-Queensland border.
The company's managing director Kevin Gallagher says an additional 15 terajoules of gas per day could hit the domestic market by the end of the year.
The boosted capacity was welcomed by Ms King, who said other companies are also planning expansions.
"Shell has also said they are trying to maximise their production, and (the fact that) everyone is doing their bit to push more molecules into the system is really important at this time," Ms King said.
Labor's support for gas development has been criticised by the Greens – which have a greater representation in the 47th Parliament – and want to stop new gas projects.
"Methane gas is more expensive than renewables, up to 86 times worse for the climate than carbon dioxide and is responsible for up to 12 per cent of the burden of childhood asthma," Greens leader Adam Bandt said last week.
Manufacturing business working Sundays to save costs
One South Australian manufacturing business reliant on wholesale rate was unable to work last week due to unaffordable prices, with 90 staff members instead working on Sunday when demand was lower.
InterCast and Forge managing director Brett Lawrence said his company did not have a retail contract for electricity, so was reliant on the spot price which can vary every five minutes.
"(What) we are finding is the price is so high that if we were operating, we would be running at a loss," Mr Lawrence told the ABC.
Mr Lawrence said his staff agreed to work on Sunday when there was less demand for energy from industry, leading to cheaper prices.
"We are looking at trying to minimise that as much as possible, but we foresee it could be three, four, maybe five weeks, that we will have to implement these sorts of changes to our work pattern."
He has urged the federal government to pursue a reservation policy to ensure that similar problems are not experienced next winter.
"That's what we would really be after, that little bit of insurance to ensure we don't all cease production."
