The NSW government has warned of heavy job losses unless it can boost competition in gas supplies as it seeks to head off an expected surge in prices when Queensland finalises a series of export projects.
One of the measures proposed is to force gas producers to set supplies aside to protect local consumers, as a last resort.
"NSW isn't simply looking at gas supply," NSW Energy Minister Chris Hartcher said. "It is looking at increasing the competition in gas supply."
Mr Hartcher was speaking before an energy summit to be held in Sydney on Thursday, with federal Energy Minister Ian Macfarlane to attend, along with members of business lobby groups and energy specialists.
Gas prices are forecast to double over the next few years as prices on the east coast rise towards international levels.
"The failure to develop affordable gas is a very real threat to future employment," Mr Hartcher said. "There is a lot of anecdotal stories of people threatening job losses and threatening relocation, to China or to Victoria. It is building up a head of steam."
Earlier this year, Incitec Pivot opted to build a new plant in the US to access cheap gas prices rather than invest in Australia due to concerns over rising gas prices.
"The problem isn't the lack of gas," Mr Hartcher said. "The problem is the future affordability - that's the real challenge. We have to ensure that there is not just the supply but there is sufficient competition in the supply ... especially for manufacturing."
The domestic gas price is rising "and will continue to move unless we can address this issue. That's the urgency of it."
The NSW government is to finalise regulations over the next few weeks which will clarify details of the planned two-kilometre exclusion zone between urban areas and coal seam gas exploration and development, along with detailing zones around the wine and equine industries in the Hunter to ensure their operations are not compromised.
Detailed planning controls for wind energy will not be clarified until next year.
"Like coal seam gas, wind has had a failure to develop community acceptance, and we've got to look at alternative areas or better community engagement," Mr Hartcher said.
"This is not the government's problem alone. Sure, the government's got a major role to play but it is a problem for industry and it's a problem for unions as well."