Foreign-owned gas companies export 80% of Australia’s gas, including 70% from the eastern states, 90% from the west coast, and nearly 100% from the Northern Territory.
According to Executive Director at The Australia Institute, Richard Denniss, the more gas Australia exports, the faster it’s gas reserves run out resulting in higher energy bills for Australian households and businesses.
These companies receive 56% of the gas they export royalty-free and have never paid Petroleum Resource Rent Tax. Their strategy of exposing Australian customers to high global gas prices has added billions to their profits, harming local households and businesses.
The Coalition’s recent statements committing to “prioritise supply to the domestic market” is welcome recognition that gas exports are hurting Australians.
“The government can achieve this tomorrow by capping exports. It is not complicated. We have provided certainty of supply and price to the Chinese market for decades, while ripping off customers at home.” said Denniss.
Australia is one of the world’s largest gas exporters, with no shortage of gas, as the Coalition recently stated. Even with new projects supplying the domestic market, more gas would be exported from fields currently serving local needs.
Gas giants could be forced to divert supply to Australia
Under a Coalition reservation scheme, gas giants would be required to divert gas to the domestic market in exchange for faster environmental approvals for new projects.
Industry sources anticipate that Labor will adopt a similar approach as part of an election strategy to secure more energy and lower prices.
Opposition Leader Peter Dutton will likely detail the Coalition’s policy “imminently”, potentially as soon as Thursday in his budget reply.
Gas giants could be forced to supply more energy to the domestic market under gas reservation plans likely to be adopted by both political sides in a bid to secure more energy and lower prices.
The Coalition is nearing an announcement of its “prospective” gas reservation plan, offering eased environmental and carbon emissions regulations in exchange.
While initially expected to be announced during the election campaign, sources suggest Peter Dutton may make it a key part of his budget reply speech on Thursday, potentially unsettling major export partners like Japan.
There’s widespread expectation that Labor is ready to counter Mr. Dutton with its own version of a reservation plan to boost gas supply to the east-coast energy market.
While domestic reservation has long been considered too risky due to concerns over “sovereign risk” for global investors, the possibility of a hung parliament has given the idea new momentum, as many teals and independents support increasing domestic gas production.
The Coalition plans to announce its reservation policy alongside promises to “flood” the market with gas by 2028, when the ACCC warns of a supply shortfall.
Dutton’s $331 Billion Nuclear Energy Plan
The Coalition’s gas plan, central to Mr. Dutton’s $331 billion nuclear energy proposal, is designed to serve as an interim energy source as coal power phases out, given the decades-long timeline for nuclear energy development.
Labor’s energy plans also rely on more gas to “firm” intermittent wind and solar power. Gas reservation policies already exist in states like WA and Queensland, where released acreage includes a domestic supply requirement.
Prime Minister Anthony Albanese on Monday scoffed at the former Coalition government’s “gas-led recovery”, saying it led nowhere, and that providing the industry with policy certainty was the key.
Tasmanian senator Jacqui Lambie blasted the government’s planned household energy relief, saying it was money that would flow to multinational energy companies.
Gas Giants’ Concerns
Gas giants are concerned about policies that blur the definition of an existing gas project. Would new wells drilled in existing gas fields be considered additional and required to supply domestic reservations, or would the policy only apply to future supply contracts?
The constitution limits federal gas reservation policies to offshore gas, covering future projects in the Northern Territory, Western Australia, and Bass Strait, including Gippsland and Otway zones.
The opposition believes it can unlock around 143 petajoules of gas annually by fast-tracking about a dozen projects awaiting approval, with domestic demand currently at 400 PJs per year.
The Coalition’s projected projects, set to be operational by 2028, include Narrabri (onshore), Gippsland’s Lake Blue Energy Wombat project, and GB Energy’s Golden Beach Gas Field.
