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Prime Minister Scott Morrison’s call for gas to become the transition fuel until clean energy can be made more reliable does not necessarily sound the death knell for new coal-fired power, his office said.While the government has no intention of funding new coal-fired power stations, it did commit before the election to a feasibility study into underwriting a so-called clean coal power station in Collinsville, Queensland.

Prime Minister Scott Morrison says gas is the transition fuel for the energy sector. AAP

On Wednesday, Mr Morrison told the National Press Club that technological advance was the best way to reduce carbon emissions. As part of this, the Commonwealth would negotiate bilateral energy agreements with each of the states under which they would reduce emissions.

He demanded the eastern states lift their moratoriums on gas development, saying the fuel was vital for the transition away from coal-fired power towards clean energy sources.

“There is no credible energy transition plan for an economy like Australia, in particular, that does not involve the greater use of gas as an important transition fuel,” he said.”Sweating our existing coal-fired power generation assets will only take us so far.”

A spokesman for the Prime Minister clarified this did it mean he was slamming the door on so-called clean coal if it proved feasible.

The Collinsville project was mooted after the Nationals protested the Prime Minister was putting too much emphasis on renewable energy projects in the lead-up to the federal election.

As part of a policy to underwrite new generators to increase competition in the sector, Mr Morrison chose a pumped hydro project in Tasmania as the first project to be mooted. He also emphasised the government’s expansion of the Snowy-Hydro scheme.

Subsequently, the Prime Minister announced that a High Efficiency Low Emissions coal-fired power station in Collinsville, about halfway between Townsville and Mackay, would be considered as one option to power heavy industry in the region.

Mr Morrison stressed the government would not be building or subsidising a new HELE plant but could underwrite it by agreeing to be a last resort purchaser of its power.

Former West Australia Premier Colin Barnett backed the call for the freeing up of more gas on the east coast. Gas prices have been high for years because much of the gas already being extracted has been earmarked for exports.

“The Australian gas industry needs to lift its game in supplying the domestic market if it wants to retain public support for the export of gas as LNG,” he said.

“Australia is the world leader in gas exports, yet there is a gas shortage at home. Gas exports are four times gas supply to the Australian market.”

The limits on gas development, especially the controversial coal seam gas, have been imposed by state governments. Last year, The Australian Financial Review reported the NSW government was close to giving the go ahead on the Narrabri coal seam gas project proposed by Santos.

The government has said that if any new gas field is developed, it would be subject to a reserve, meaning the gas must be set aside for domestic use.