Australian Energy Producers Chief Executive Samantha McCulloch
The Federal Government’s draft domestic gas reservation framework released today has deepened industry concerns that the proposed scheme will undermine investment in new gas supply, displace domestic-focused producers, and damage Australia’s standing as a reliable export partner at a critical time for our bilateral energy trade.
The proposed framework imposes complex and opaque compliance obligations, threatens existing export contracts and entrenches a structural oversupply that would mute investment signals for new domestic gas supply.
It will also send a concerning signal to key trade and investment partners including Japan, South Korea, Malaysia and Singapore, which have been given repeated assurances from Prime Minister Anthony Albanese that LNG contracts will not be impacted by the reservation scheme.
At a time when Australia needs more gas supply, this proposal risks crowding out smaller domestic producers, discouraging future projects and exacerbating long-term supply pressures in the east coast gas market.
The patchwork of exemptions also creates significant and ongoing uncertainty for gas producers and users in Western Australia and the Northern Territory.
Australia’s oil and gas industry supports a prospective reservation policy that encourages investment and promotes a competitive and functioning gas market. But the proposed design does the opposite and, if implemented, would be an own goal for Australia’s future energy and economic security.
Australian Energy Producers has engaged constructively with the Government throughout the consultation process and will continue to advocate for a framework that supports investment, maintains competition and strengthens Australia’s long-term energy security.