Victorian Premier Daniel Andrews and PM Malcolm Turnbull were all smiles last week when shaking hands for the cameras at the latest COAG meeting, but it was all a front.

 

Andrews told ABC TV yesterday it was the "definition of market failure" that AGL Energy was considering importing natural gas into his state - a move for which his department has been heavily lobbying as it will bring significant investment into Victoria, Australia's largest gas market.

 

Andrews defended his state's ban on onshore unconventional drilling, repeatedly ducking and weaving to avoid questions about whether locking up his state's gas reserves had pushed up energy prices.

 

"The key point is this: Last year, 402 petajoules of gas — that's what was produced in Victoria. How much did we use? 206 petajoules. Put another way, enough supply for 7 million houses. We used three-and-a-half million houses worth," he said.

 

"There is not a problem with supply. There is sufficient supply. What there is not though is sufficient political leadership from the Commonwealth and the Prime Minister because he is the only one who can get this done, to reserve our gas for our households and our businesses first.

 

"What's left over, export it to whomever you want at whatever price you can get for it."

 

Turnbull also lashed out at Alan Jones last week, as the radio shock jock had been attacking the Coalition daily also saying the gas crisis is one of price, not supply.

 

Turnbull suggested Jones lacked basic economic understanding that price is a function of supply and demand, so supply was a big part of the problem.

 

As pollies argue whether it's a gas price or supply issue, the Australian Pipelines and Gas Association's new CEO Steve Davies said both energy policymakers and industry stakeholders attending a conference in Sydney this week needed to stop thinking about gas and electricity separately.

 

"Energy conferences usually have a gas stream and an electricity stream, and these are often attended by different people," Davies said.

 

The same was the case for energy policy papers which have an electricity section and a gas section, as do most government energy departments and most energy businesses - something Davies would be acutely familiar with as APGA's former policy chief.

 

Yet Davies says this must change for any progress to be made to benefit the upstream sector, manufacturers and government alike.

 

"Energy policy is almost always managed and progressed in silos," Davies said.

 

"Electricity, gas and petrol are considered separately as commodities rather than sources of energy.

 

"Households and businesses, those that produce energy, those that transport energy and those that use energy are all examined in silos."

 

Even emissions policy is broken down into the same silos - "but we have to stop doing that" - and Davies suggested that the Coalition's "energy technology agnostic" approach would be the best way to go.

 

"Australia has future energy needs, not gas needs or electricity needs. Different energy sources have different strengths and we need all of those," Davies said.

 

"The challenges to gas supply are challenges to energy supply and the challenges to electricity reliability are challenges of energy reliability.

 

"We need to start thinking of them that way so that we can develop a cohesive national energy policy to reliably and affordably meet our needs into the future."