Speech: Samantha McCulloch address to the 2026 Australian Domestic Gas Outlook Conference

Step on the gas: How gas market reform can unlock supply and restore investment confidence

Acknowledgment of Country

Good morning.

I would like to begin by acknowledging the Traditional Owners of the land on which we meet, the Gadigal People of the Eora Nation, and pay my respects to Elders past, present and emerging.

Energy security

The head of the International Energy Agency, Dr Fatih Birol, was in Australia last week to reinforce a key message to world leaders.

That “the world is facing the greatest global energy security threat in history.”

The message was not just a warning, but a call to action. The world needs to do more to navigate this crisis, and take steps to ensure we are more resilient and better prepared for the next one.

Since then, the outlook has only gotten more uncertain. It could be months, or years, before we see a return to something resembling normality in the international oil and gas trade.

The world is being reminded of an inescapable truth: energy security is fundamental to national security, food security, and economic growth.

Reliable and affordable energy underpins every facet of the economy:

Our transport, our electricity, our food production, our mining and manufacturing industries, and heating and cooling our homes.

If there was any doubt, it’s clear now: energy security must be the overriding consideration in energy policy.

There is another unspoken truth that the events of the past month have reinforced: the world runs on fossil fuels.

And few more so than Australia.

While oil, gas and coal account for around 80 per cent of the world’s primary energy consumption, in Australia that figure is 91 per cent.

Our vast continent depends on liquid fuels for 40 per cent of our country’s primary energy needs, especially petrol and diesel, to move goods and people across long distances every day.

Natural gas and coal each account for 25 per cent of our country’s primary energy.

Gas is the main source of energy used by Australian manufacturers; it’s used in half of all Australian households for cooking, heating and hot water. On the east coast, gas provides reliable electricity and supports the

transition to more renewables. In Western Australia and the Northern Territory, natural gas generates most of the electricity.

The Australian gas industry is also key driver of our economy, contributing more than $100 billion a year to the nation’s economy and supporting 215,000 jobs.

And despite what you might hear later today, the fact is that the oil and gas industry is also Australia’s second-largest corporate taxpayer. I’ll have more to say on that later.

Fuel insecurity – a cautionary tale

For a case study on the difference between energy security and energy insecurity, we need only look at the stark contrast between what we’re seeing with fuel and gas prices in Australia today.

While international gas prices have surged, the Australian gas market remains well supplied, and prices remain stable and comparatively low.

In fact, east coast prices remain the lowest they’ve been in years, and are almost a third of international LNG prices.

Australia’s strong domestic gas market means we remain insulated from the worst of the global energy crisis.

The events of the past month should be a wake-up call that we cannot let our gas industry become the next essential sector to be driven out of Australia.

Because we know how that story ends.

Today, Australia relies on imports for around 90 per cent of our liquid fuel needs.

As a result, Australia is extremely exposed to prolonged disruptions in the international oil market, and almost entirely reliant on our regional trade partners for our main source of energy, liquid fuels.

It wasn’t always so.

In 2000, Australia was largely self-sufficient in oil, with high volumes of domestic oil production and eight refineries supplying most of Australia’s liquid fuel needs.

Today, we produce only around 5 per cent of our demand, and our two remaining refineries only provide 17 per cent of our refined petroleum products, using mostly imported crude oil.

Australia now has one of the largest trade deficits in refined petroleum products in the world, despite having abundant undeveloped oil reserves.

Australia let the anti fossil fuel activists win. We allowed our fuel security to be outsourced to the rest of the world, and now all Australians are paying a very high price.

You would think that such a mistake would never be repeated.

But right now, we are seeing the same vested interests trying to stop new gas developments through well-funded and coordinated campaigns of disinformation and lawfare.

The relentless disinformation campaign that we’re seeing from The Australia Institute, the Greens and Teals in pushing for an additional 25

per cent tax on gas exports represents a major threat to Australia’s energy security.

It is no coincidence that these groups also want to stop all new gas projects in Australia.

It is right out of the Greens’ playbook: no more coal, oil and gas.

This campaign must be called out for what it is.

We cannot let extremism dictate Australia’s energy policy.

A tax on all Australians

It shouldn’t have to be said that this is the worst possible time to impose new taxes on an essential energy sector.

The facts are that the oil and gas industry is already Australia’s second-largest corporate taxpayer, contributing $21.9 billion in taxes and royalties last year.

Australia’s oil and gas tax regime already equates to an effective tax rate between 50 and 60%, across company tax, the Petroleum Resource Rent Tax, state royalties and a range of other government taxes and fees.

This tax framework is designed to ensure government revenue increases when company profits increase.

And it is working.

The Australian Taxation Office data confirms that Australian oil and gas companies have never paid more tax than they do today.

This is important context for the proposal to hit Australian oil and gas companies with an additional 25% tax.

Independent modelling from Wood Mackenzie shows that an additional 25 per cent tax would result in an effective tax rate as high as 80 to 90 per cent for some companies.

WoodMac found this would put Australia’s investment competitiveness behind the United States, Qatar, Canada, PNG, Indonesia, Malaysia and Nigeria.

In short, it would render Australia un-investable for new oil and gas supply projects.

It is a tax on investment, on jobs, and on Australia’s energy security.

It’s a tax hit on all Australians. Through higher energy prices. Through lost jobs. Through shuttered industries.

We need only look at the UK example to see the pitfalls of introducing a populist so-called windfall tax on the oil and gas industry.

In 2022, the UK Government introduced the Energy Profits Levy. Initially a 25 per cent windfall tax, later increased to 38 per cent, the levy has resulted in an effective tax rate for oil and gas projects of 78 per cent. The result? A steep decline in domestic oil and gas investment that has left the UK more reliant on expensive imported gas. Gas prices in the UK have almost doubled since the start of the Middle East conflict. This could be Australia’s future if we do not continue developing our own gas resources.

The proposal to import LNG into Victoria and NSW is a disaster waiting to happen.

The ACCC has warned that “LNG import prices may be higher than current domestic gas prices” because it would “create new direct links to international LNG supply and prices”.

But without continued investment in new supply and infrastructure, this could be our new reality within a few years.

Governments cannot say they weren’t warned.

Investment in Australia is already suffering from regulatory uncertainty, high taxes, slow approvals and unchecked activism.

Oil and gas exploration activity in Australia is already at historically low levels, and the full impact of years of under-investment is yet to be realised.

Imposing another new tax on the industry would send a very clear message to the world that Australia is closed for business.

The Federal Government must rule out new taxes on the industry, and instead focus on ensuring Australia can attract the investment in new gas supply needed to secure our energy needs and reinforce Australia’s crucial role as a reliable energy partner in the region.

Gas Market Review

The threat of new taxes on the gas industry also risks undermining the Government’s Gas Market Review, which has, as one of its core objectives, to “create a long-term stable regulatory environment to support investment certainty.”

The Gas Market Review is an opportunity to reset national gas policy with a focus on certainty for investment.

As the ACCC found last year, the current patchwork of policies and interventions hasn’t worked –and “appear to have had the unintended consequence of exacerbating the risk of domestic supply shortfalls”.

The latest Gas Statement of Opportunities confirmed Australia’s east coast gas market remains well supplied in the near term, and forecast seasonal and structural shortfalls have been pushed back to 2030.

The improved supply outlook means Australian governments and industry have time to continue to work together to ensure the east coast reservation policy is properly designed and supports a competitive and functioning gas market.

A well-designed, prospective reservation framework for the east coast gas market that is linked to new supply can provide the foundation for a competitive and well-supplied domestic gas market, while providing investment certainty for gas producers and users.

Getting the design of a reservation scheme right will be critical.

It must replace the complex web of overlapping regulations currently in place, which have added complexity and uncertainty to the market.

And it must be flexible enough to respond to market needs.

Without the flexibility to export gas that is surplus to the domestic market, the reservation would risk flooding an already well-supplied market at the expense of domestic-focused producers.

This conference has heard from small producers who have outlined why this would stifle investment in critical new domestic-focused projects, including in Victoria where the gas is most needed to avoid shortfalls.

This would be at odds with the intent of these reforms, and would consign a reservation policy to the long list of failed interventions in the gas market.

I am optimistic that we have learned the lessons from past mistakes.

Our industry is committed to working with the government to achieve our shared goal of ensuring Australian households and businesses continue to benefit from reliable and affordable gas for many more decades.

A reliable energy partner

Australia’s domestic gas policy must also recognise that our domestic gas market depends on a strong LNG sector. As the Gas Market Review highlighted, “Australia’s LNG exports have provided an important contribution to the Australian economy through taxation and royalties, jobs and skills.

“Australia’s LNG exports have also contributed to energy security in our region and at home by unlocking gas that would otherwise be uneconomic to develop solely for domestic use.”

Our LNG exports also support the energy security of our trading partners across Asia. And in return, those relationships support Australia’s fuel security, our economy, and our place in the region.

More than 400 billion dollars has been invested in Australia’s LNG industry since 2010.

This investment was built on trust and goodwill between Australia and our trading partners, which has delivered enormous returns to our economies.

LNG demand in Asia is forecast to almost double by 2050, according to Wood Mackenzie.

Australia is ideally placed to leverage our abundant gas resources to meet this growing demand, which will advance our own energy security, grow our economy and strengthen Australia’s strategic role in the region.

This investment will only happen if Australia shows that it will remain a reliable energy partner. Not just in words, but in actions.

As Japan’s Ambassador to Australia Kazuhiro Suzuki said last week, the term ‘good surprise’ is not in the Japanese dictionary.

Our other energy trade partners in the region also need certainty and stability for their multi-billion-dollar investments in Australia.

Because in a world where geopolitical risk is rising, these enduring partnerships matter more than ever.

The events in the Middle East have made that abundantly clear.

Unchecked lawfare

One of the biggest threats to Australia’s future energy security is the rise of lawfare in Australia.

Activist groups are weaponising the courts to delay, disrupt, and ultimately stop critical energy projects.

Lawfare is the new battlefront for the anti-gas movement, and it’s exacerbating delays and uncertainty in an already strained environmental approvals system.

This is not grassroots environmentalism. It is calculated economic vandalism, and it is putting Australia’s energy security at risk.

And it is being driven by well-funded, professional activists.

Resources Minister Madeleine King has rightly raised serious concerns about the conduct of the Environmental Defenders Office, which was found by the Federal Court to have presented evidence that amounted to “confection” and that was “so lacking in integrity that no weight can be placed on them”.

As the Minister said recently, taxpayer-funded legal organisations are not political campaign vehicles.

And she is absolutely right.

Yet the EDO receives more than $2 million a year from the Federal Government.

The taxpayer funding of the EDO must stop.

There must also be accountability and transparency for these groups that use their charitable status to receive millions of dollars in often anonymous donations.

And there must be consequences for misconduct.

As Senator Susan McDonald said this morning, Australians have a right to know who is funding these groups, what their motives are, and if there is foreign money pouring into Australia to drive policy and political results.

If companies and politicians are expected to meet the highest standards of disclosure, then organisations engaged in activist litigation should be held to exactly the same standard.

Because right now, the system is being gamed.

Conclusion

Australia’s energy policy is again at a crossroads.

We can choose a path of stability, investment, and energy security.

Or we can choose a path of higher taxes, regulatory uncertainty, and declining supply.

If we want reliable and affordable energy, we must support the industry that delivers it.

If we want investment, we must provide certainty and internationally competitive policy settings.

If we want to remain a trusted partner in our region, we must act like one.

Australia is blessed with abundant oil and gas resources.

And if we are to navigate the greatest global energy security threat in history, that is a huge advantage that must not be squandered.

Thank you.