Speaking at the East Coast Gas Outlook Conference in Sydney on Monday morning, Willox said the supply shortage on the east coast could be worse for businesses because it took the gas price to among the highest in the world.

“The gas price shock is a big part of the death of the competitive advantage Australia once enjoyed in energy costs,” he said.

He said there would be a number of repercussions for the hike, including challenges for gas-dependent manufacturers and a coal-to-gas switch would be stalled.

Willox said gas users who were looking for contracts at the moment were expecting to pay $5-9 per gigajoule from the long-term average of $3-4 per gigajoule.

He said some gas users had their heads in the sand about the price hike and supply problem but warned the threat was real.

Willox proposed a number of solutions to address the many issues that were causing gas troubles on the east coast.

He said price-smoothing agreements could help users if the price hike was short term, but the agreements would not offer much relief if the hike continued.

“Crucially, government can also play a role in helping demand to adjust as painlessly as possible,” he said.

He also made comments on how to deal with environmental regulation to ensure timely decisions were made and to make sure the industry was seen as credible by the public.

Willox said Australian regulators could model their system of the US Department of Energy’s approvals process, which took into account the public interest aspect.

He said he was looking forward to the summit foreshadowed by Industry Minister Ian Macfarlane expected to take place early next year.