Opinion article by Samantha McCulloch in the Sydney Morning Herald on the Gas Market Review

Opinion article in the Sydney Morning Herald by Samantha McCulloch, Chief Executive of Australian Energy Producers, December 8 2025.

The Federal Government is expected to shortly announce the biggest shake-up of the east coast market in years.

Ordinarily, gas producers would be alarmed at the prospect of such an overhaul, and for good reason. The past decade of gas market policy has been marked by rushed reforms, heavy-handed market interventions, and more regulation.

This time, there is a degree of optimism that change can be for the better. The Government’s Gas Market Review was set up earlier this year with an aim to “improve and streamline” the complex regulatory framework that currently governs the east coast gas market, and “ensure sufficient affordable gas supply in the longer term”.

Reform is necessary and long overdue. A well-supplied and affordable gas market is essential for Australia’s economic and energy security. Natural gas provides reliable electricity, fuel for heating and cooking in more than five million Australian homes, and is the main source of energy for Australian manufacturing.

Australian gas producers and users agree that the current gas market arrangements are not working for anyone.

As the Australian Competition and Consumer Commission (ACCC) recently found, the regulations that are meant to ensure a well-supplied and functioning market have not only failed to add any material volumes of new gas, or lower prices, they “appear to have had the unintended consequence of exacerbating the risk of domestic supply shortfalls.”

The Government’s response is likely to introduce a gas reservation policy for the east coast. The Government, from the Prime Minister down, has reassured our trade partners including Japan and Korea that the long-term gas export contracts so critical to their energy security will not be impacted.

This assurance is important because Australia’s gas exports continue to underpin investment in new gas supply for both the domestic and export market, and investment appetite remains subdued from past interventions. Our trade partners are closely watching the Government’s next move.  

Australian Energy Producers supports a prospective reservation policy that is linked to new supply. A well-designed reservation policy can provide long-term certainty for gas producers and users – particularly large manufacturers – to invest with confidence in major projects and infrastructure.

However, a reservation policy alone will not fix the east coast gas market. Bringing new gas supply online sooner is the only sustainable solution to put downward pressure on prices and ensure a well-supplied and functioning market. Reforms that fail to recognise this will simply prolong the cycle of looming shortfalls and higher prices.  

Tangible action is urgently needed to address the regulatory barriers to new supply, including slow approvals and activist lawfare.

The Government’s recent deal with the Greens to exclude gas projects from streamlined environmental assessment pathways was a missed opportunity to cut unnecessary costs and delays in delivering gas to Australian consumers.

Australia holds an enviable advantage: abundant energy resources at a time of record global demand, rising geopolitical uncertainty, and increasing pressure to balance the transition to cleaner energy with reliability and affordability.

We have enough undeveloped gas reserves to meet our long-term domestic energy needs and remain a reliable energy partner in our region.  

Australian Energy Producers’ analysis found there is up to 140 petajoules per year of additional east coast gas supply that could be brought to market by 2030 – more than three times the volumes need to avert the annual shortfalls the Australian Energy Market Operator forecasts for southern states from 2029.

That includes the Santos Narrabri project, which could meet half of New South Wales’ gas needs, but has been tied up in regulatory delays and court challenges for more than a decade.

Australian gas producers stand ready to work with governments and energy users to ensure we don’t squander the opportunity to break the cycle of failed reforms and restore certainty and stability to the gas market.

While the political stakes of getting these reforms right are high, the economic consequences of getting them wrong are far greater.