THE gas industry has agreed to supply more gas to the domestic market.
Some of the gas planned for export will be sold to the domestic market at a cheaper price.
It followed a request from Prime Minister Malcolm Turnbull to do something to ease what he called a looming "energy crisis”.
The Prime Minister fired an opening shot with the heads of big gas companies, saying it was "not acceptable” for Australians to face a gas shortage.
"We are shortly to become the largest exporter of LNG in the world,” Mr Turnbull told reporters at Parliament House, where they met.
"It is not acceptable for Australians, families and businesses to be short on gas.
"We are entitled to expect that our families, our businesses, which employ thousands of Australians, are entitled to access gas and do so securely and affordably.”
The PM and Energy Minister Josh Frydenberg urged gas companies to step up production after a report by the energy market regulator predicted a shortage of gas could lead to widespread power shortages as soon as next year.
It's expected the Turnbull Government and gas chiefs will pressure the Victorian and NSW state governments to end bans on extracting coal seam gas and onshore gas.
Mr Turnbull slammed the Victorian Labor government in particular, saying it had banned gas exploration while allowing Hazelwood Power Station to close down.
The industry feared the federal government could implement gas reservation policies or restrict exports if a solution wasn't reached.
"What I'm seeking to do is to ensure we have action from the gas companies,” Mr Turnbull said.
"I can say that the gas companies ... are very well aware they operate with the benefit of a social licence from the Australian people.
"They cannot expect to maintain that if while billions of dollars of gas are being exported, Australians are left short.”
Opposition Leader Bill Shorten has pledged to work with the government to ensure gas supply, saying the imminent gas shortage was "above party politics”.
Mr Shorten also accused the Prime Minister of not having a strategy to ensure Australia's supply.
"Gas companies will ignore Mr Turnbull,” he said. "Australia needs more leadership.”
A lack of policy certainty, the government's " ideological war” on renewable energy and ensuring legislation encouraged local gas supply were the key issues, Mr Shorten said.
Mr Frydenberg said a short-term solution would be to release existing supplies to the domestic market and a longer-term solution would be to increase production.
Shell chair Andrew Smith said it cost $3.50 to send a gigajoule of gas from Queensland to Victoria but $3 to send it to the US.
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