This article is more than 3 years old

This article is more than 3 years old

The chairman of federal parliament’s environment and energy committee has called for a serious discussion about whether a proportion of natural gas supply in Australia needs to be reserved for domestic use rather than sold overseas.

The Nationals MP Andrew Broad told Guardian Australia’s Politics Live podcast there needed to be consideration about whether 15% of gas supply should be reserved for Australian manufacturing rather than exported.

Noting that his view differed from the position of federal Liberal party colleagues on the question, Broad said: “I think there’s a real discussion that has to be had about a reserve policy.”

He said there was already a reserve policy in Western Australia and that policy had worked. There now needed to be consideration at the national level about whether 15% should be reserved for Australian manufacturing “to ensure we are best using those resources to lift Australians’ wealth”.

Facebook Twitter Pinterest The Nationals MP Andrew Broad says Western Australia’s natural gas reserve policy has been a success. Photograph: AAP

“I believe the wealth of Australia is the common wealth,” he said.

In WA, 15% of the gas produced by each liquefied natural gas project must be kept for domestic use.

This week the WA premier, Colin Barnett, argued that the WA policy should apply at the national level.

“The situation on the east coast is there is no reservation and indeed successive federal governments have argued against a reservation policy,” Barnett said. “I’ve got to say it’s a failed position.”

The Australian Workers’ Union, which has long championed a reserve policy, also this week wrote to the prime minister, Malcolm Turnbull, urging him to sit down with gas companies to renegotiate contracts.

The AWU secretary, Daniel Walton, said allowing unchecked gas exports created bumper profits for “foreign multinational gas companies” but the behaviour had “upended Australia’s energy market”.

“Cheap gas has traditionally fuelled Australia’s energy competitiveness and powered downstream manufacturing for decades,” Walton said in the letter to Turnbull. “Going forward it should be providing abundant and cost-effective carbon reductions as Australia moves to a cleaner energy future.”

Broad’s comments about a reservation policy came during a wide-ranging interview with Guardian Australia about a new inquiry he has established with Labor’s Pat Conroy, the deputy chair of the parliamentary committee on environment and energy, to examine the policies required to modernise Australia’s energy grid.

The two MPs, who entered parliament together in the 2013 election and have parliamentary offices close to one another, have taken it upon themselves to try to carve out some territory of mutual agreement in an effort to get past the pitched partisan battle that has raged about power prices and energy security.

Conroy, who is the shadow assistant minister for climate change and energy, said there was “real merit” in looking at a domestic reserve policy for gas but he said the major issue was price.

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“At the moment, Australian manufacturers are not paying export parity, they are paying above export parity,” Conroy said.

He said Australian manufacturers were paying more for gas than energy companies in Japan and South Korea “and that means there’s something wrong with the market”.

“This issue is not just reservation, it’s pricing.”

Gas prices have soared, rising from $3 to $4 a gigajoule on average to about $6 or $7 – with periodic price spikes as high as $20.

The energy and environment minister, Josh Frydenberg, has thus far resisted calls for a domestic gas reserve.

Frydenberg noted in early February the Australian Competition and Consumer Commission and the Productivity Commission had argued a national gas reservation policy was unwise.

He said the government was interested in “innovative ways” of getting more supply into the domestic market to overcome the roadblocks created by state moratoria on coal seam gas exploration.

A spokeswoman for the prime minister said the government was “open to considering ideas that will improve gas supply” but it was “not currently government policy to support gas reservation”.