Vic resists state gas reserve amid crisis

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Victoria will not be going it alone on a gas reservation scheme amid the national energy price crisis.

The state government has been urged to follow the lead of Western Australia's reservation policy, which mandates producers hold 15 per cent of liquefied natural gas production for domestic use.

As Australian households and businesses grapple with rising energy costs this winter, Premier Daniel Andrews said he would prefer a national scheme after calling for a domestic reserve as far back as 2017.

"It's not about going it alone," he told reporters at state parliament on Wednesday.

"What's been consistent - certainly from me and our government - is the need for Victorian gas, Australian gas to be for Australian businesses and Australian households first.

"I've made that position clear to a number of PMs, including the current one."

Sustainable Australia MP Clifford Hayes said the Andrews government should act if the federal government and gas companies cannot agree on a domestic reserve.

"This is the only way to solve the gas crisis," he said.

But the premier said it is not practical for Victoria to set up its own gas reserve, with the state plugged into the gas network along Australia's east coast.

In 2017, former prime minister Malcolm Turnbull introduced a "gas trigger" to allow exports to be diverted to domestic supply to limit energy price rises.

Mr Andrews said the mechanism, which involves the Australian Energy Market Operator confirming to the federal government that it forecasts a domestic supply shortage for the forthcoming calendar year, isn't the "simplest way home".

"At the time there was quite a bit of commentary that that was less than streamlined, but it could be used now and indeed you could go beyond that," he said.

"It just makes no sense to families across our state, and businesses, that we should be making them compete with the rest of the world for something that comes out of our ground."

Victorian energy minister Lily D'Ambrosio flagged the trigger and other potential solutions were on the agenda for Wednesday's meeting of state and territory energy ministers with federal Climate Change and Energy Minister Chris Bowen.

She said her state was a net exporter of gas and slapped down a "myth" the country was running out of the resource.

"The problem has been that too much of what is produced, certainly to the north of the country, is being exported overseas," Ms D'Ambrosio said.

"NSW has ... been very heavily reliant on gas supply. There is a real need for a conversation around how more gas can be released domestically to be pulled into NSW."

The Victorian coalition is sticking to its 2017 pledge to make companies exclusively supply any new conventional gas into the Victorian market, unless granted an exemption.

Opposition Leader Matthew Guy said the Andrews government should have enacted a state-based reserve years ago.

"Our domestic gas supplies ... should be preserved," he said.

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