Energy companies urged to find more gas for Australia as Labor mulls supply ‘trigger’ to ease price surge

New minister Madeleine King has asked resource companies to find more gas to direct into Australian markets as she considers pulling the so-called gas "trigger".

However, the resources minister has also claimed more coal supply was key to combating a brewing energy crisis.

It comes as treasurer Jim Chalmers called on the Australian Competition and Consumer Commission to investigate factors behind spiking energy prices, flagging the new Labor government was mulling "a number of actions" to address electricity and gas concerns.

"Given the interdependence between gas and electricity, managing coal supply issues is crucial in relieving unusually high spot prices in the gas market," King said.

Energy minister, Chris Bowen, will on Wednesday afternoon host a video conference meeting of state and territory energy ministers, to address what he last week described as a "perfect storm" of factors supercharging energy prices. A cold snap across much of Australia led to a surge in demand for heating, on top of international gas prices spiking due to the conflict in Ukraine, maintenance on some key local power stations, and even flooding of some coal mines leading to a shortfall in fuel.

Bowen last week claimed Australia would have been "much better placed to deal with the current challenges" if the former Coalition government had invested more in renewable energy, storage and transmission, claiming the Morrison government's policies had left the nation "ill-prepared for the challenges we are facing".

Government sources said they believed greater collaboration between state and commonwealth governments would be a key factor in reducing prices, with the meeting to discuss a number of small changes at the margins which can be made in the short term.

The Australian domestic gas security mechanism, which has been referred to as a gas supply "trigger", is a policy available to the resources minister which can require natural gas projects to limit exports or find new gas sources.

Bowen last week shrugged off suggestions this could be an immediate fix, noting the mechanism would not come into effect until the following January, and was "not the answer to this short-term crisis".

But with some of the factors in the current energy shortfall potentially persisting for months to come, King was still considering enacting the ADGSM trigger.

"The ADGSM remains on the table as an option, but it was not designed to target price spikes like the one we are currently seeing. The ADGSM was designed to address lack of supply - at present there is no evidence there is a lack of supply," King told Guardian Australia.

King has also been having what she called "very positive" discussions with large gas companies like Origin, Shell and Santos about what they can do to inject more supply into the Australian market, such as finding supply not already contracted out, or having conversations with large energy consumers about temporarily slowing down their shipments to get more gas to households. However, with much of Australia's gas tied up in long-term contracts, and structural constraints such as gas pipelines already operating near full capacity, options to increase supply may be limited.

The Australian Energy Market Operator said on Thursday that, after its activation of a gas supply guarantee mechanism calling on producers to increase supply, the south-west Queensland pipeline into New South Wales, Victoria and South Australia was last week operating at 98% capacity.

"Gas industry representatives indicated openness to working in good faith, and discussed some of the challenges of increasing gas supply in the southern states, such as pipeline capacity from Queensland to the south," King said.

The gas supply guarantee, which led to more gas flows, and a reduced demand with the easing of last week's cold snap saw the guarantee mechanism turned off on Friday. Aemo said its administered price caps of $40 per gigajoule would remain until Tuesday. The government believes that even small factors, such as getting some flooded coal mines back online in coming days, will help further ease energy prices and supply shortfalls.

"It is important to get coal energy generation back online as soon as possible, noting a great deal of electricity generated for consumers in the national energy market is from coal-fired power stations," King said.

"Over the long term, additional gas and renewable electricity generation capacity, as well as storage and transmission, will need to come online to meet Australia's future energy needs as we pursue a net zero emissions future."

Chalmers said on Monday he had written to the ACCC with his "deep concern about skyrocketing electricity and gas prices", asking the commission to probe any inappropriate conduct in the market.

"While there are a number of factors driving these price increases, the ACCC plays a critical role in monitoring and reporting on developments in the electricity and gas markets and it will be important for the ACCC to ensure that the factors influencing prices in these markets are made fully transparent," Chalmers said in a statement on Monday.

"I also expect that the ACCC will investigate any concerns about anti-competitive or false and misleading conduct in these markets and take appropriate action.

"I have asked the ACCC to advise the government of any regulatory changes that may be required to ensure these markets are functioning properly."

Chalmers said the new Labor government - including with Bowen, King and industry minister, Ed Husic - was "considering a number of actions in response to the energy crisis we've inherited".

The treasurer did not detail what actions or possible regulatory changes were under consideration.

Husic, currently in Indonesia as part of a government delegation led by the prime minister, Anthony Albanese, has been speaking with large industrial consumers of gas such as manufacturers who have expressed concerns about whether the impact of rising prices may have flow-through implications on their workforce.

Industry accounts for about half of Australia's domestic gas consumption, according to the Aemo.