The Berejiklian government has comprehensively failed to develop enough gas reserves to help Australia head off grave shortages and keep power bills low, according to Prime Minister Malcolm Turnbull, amid predictions of a looming national gas shortfall three times worse than first thought.
The Prime Minister took aim at his NSW Coalition stablemate on Monday, as he ordered state governments and gas giants to shore up gas supplies to east coast consumers or face strict export limits.
Mr Turnbull on Monday said the government had received two reports from the Australian Energy Market Operator and the Australian Competition and Consumer Commission, showing gas shortages in the east coast domestic market over the next two years "will be considerably higher than that estimated six months ago".
"It's estimated there will be a shortfall ... of around 110 petajoules of gas - more than three times the figure we were advised earlier in the year," Mr Turnbull said.
He said recent rises in gas costs were the "single biggest factor in the current rise in electricity prices" because gas sets the wholesale electricity price.
"More expensive gas has huge implications for industry and for struggling families, but it feeds directly into the electricity market," Mr Turnbull said.
"We will not let the power bills of Australians rise further and further because of a shortfall of gas on the east coast of Australia."
Mr Turnbull said the government's controversial powers to limit gas exports would be invoked if exporters and states with gas development bans did not show how the shortfall will be met.
The limits, known as the Australian Domestic Gas Supply Mechanism, were introduced on July 1 and allow the government to intervene to ensure sufficient supply of natural gas to meet the predicted needs of Australian consumers. It would require LNG projects that draw gas from the domestic market to limit exports, or find offsetting sources of new gas.
Mr Turnbull lamented "a comprehensive failure on the part of state governments to develop their own gas resources".
"Queensland is an honorable exception. Queensland is producing most of the gas on the east coast of Australia. But both Victoria and NSW are not doing enough," he said.
"We strongly encourage the NSW Government to approve the development of the Narrabri Gas Project, for example, which will add over 58 petajoules of gas per year. That is critical to the energy security of Australia," he said, adding that NSW imports 95 per cent of the gas it uses "so it needs to produce more gas".
In NSW there is a ban on the use of so-called BTEX chemicals in fracking, as well as bans on coal-seam gas exploration within two kilometres of residential areas and in key horse breeding and viticulture areas.
It is understood that Mr Turnbull believes the approval process for Santos' Narrabri Gas Project has been too drawn out and he wants NSW authorities to fast-track a decision. A final ruling on the project will be made by the independent Planning Assessment Commission.
NSW Energy Minister Don Harwin said the state's gas plan was science-based, and gas exploration was ongoing.
"In June we implemented the Strategic Release Framework, which identified new areas for gas exploration," he said, adding that two prospective conventional gas troughs in Western NSW were under evaluation, and the Narrabri Gas Project was being considered by planning authorities.
Victoria's Andrews government last year banned the gas extraction process known as fracking, in response to strong community concern.
A Victorian government spokesperson said Mr Turnbull "can no longer ignore the facts and must immediately act to restrict LNG exports".
The gas limit policy has been designed to come into effect at the start of a calendar year, and decisions on the level of shortfall and restrictions applying to each exporter must be made before November 1.
Mr Turnbull said the government's foreshadowing of export controls earlier this year meant "more gas brought into the market ... but it has clearly not been sufficient to date".
Mr Turnbull had been in talks with the chief executives of major gas exporters and "we expect them to demonstrate to us ... [that] they will ensure that there is not a shortage of gas next year on the east coast", he said.
Gas exporters are staunchly opposed to export restrictions, which they say create a sovereign risk.
Exporter Origin said it was aware of the need for reliable gas supply at sustainable prices.
"We continue to actively sell gas to domestic customers and our recent sales demonstrate we are making supply available and prices have come down rapidly from a peak in April," said Origin's head of energy supply and operations, Greg Jarvis.
The Australian Industry Group says pressure should be applied to gas exporters to ensure industrial businesses can access affordable, plentiful gas supplies. Industrial users comprise more than 40 per cent of Australia's gas use.
Mr Turnbull also blamed Labor for allowing gas exports from Queensland and failing to protect the interests of domestic customers. Labor said it had repeatedly called on the government to implement gas export limits reduce power bills.
Resources Minister Barnaby Joyce, who has responsibility for the gas trigger, was not present at the Prime Minister's press conference, which was attended by Energy Minister Josh Frydenberg and Treasurer Scott Morrison. Mr Turnbull said Mr Joyce was attending to duties in his electorate.
Labor says Mr Turnbull has ignored "serious questions" surrounding the legitimacy of decisions made by Mr Joyce, who is embroiled in Parliament's citizenship fiasco before the High Court and may not be eligible to sit in Parliament.
The Australian Workers' Union on Monday accused Mr Turnbull of giving "yet another reprieve to multinational gas exporters who are denying Australian gas to local businesses and households".
- With Cole Latimer