A cross-sector alliance has warned the Albanese Government’s domestic gas reservation is on course to be captured by narrow vested interests. 

The group includes many of the biggest players in the reservation debate – Australia’s chief industry advocate, the union for gas workers and gas-intensive heavy industry, the country’s largest environmental group, and the peak body supporting energy-poor low-income households. 

It warns that draft legislation for the reservation, published last month, contains weaknesses that will be exploited by some gas producers keen to avoid supplying the local market in favour of more exports. The reservation risks failing to deliver on its key objectives of cheaper, reliable domestic gas. 

The group has advanced a catalogue of amendments to the draft legislation, and is seeking meetings with the Prime Minister and other key Ministers, to get the initiative back on track. 

It says a few gas producers are seeking to undercut the reservation to preserve the high-cost, supply-constrained status quo. But the preferences of any one company or project must not be allowed to override the national interest in affordable, reliable energy that is compatible with Australia’s climate progress. 

The group’s amendments aim to ensure all gas exporters are required to supply the local market equitably and according to domestic needs. It expects the legislation to be formally introduced to Parliament in the coming weeks – warning time is fast running out to avoid capture and an ‘imitation reservation’. 

 

Paul Farrow, National Secretary, Australian Workers’ Union 

“Let’s be honest – the Santos-GLNG project is by far the biggest weight on local gas users, pilfering mountains of gas for export without supplying the domestic market. Their imitation reservation would just preserve this broken status quo.” 

“Santos and a few other producers claim we’ll solve the gas crisis by letting them shirk a reservation. We can’t fall for it. We can have free reign for Santos or a fair go for everyone else. 

“If we get this right, we get much needed gas price relief and greater energy security. If we fall for Santos spin, we get a leave pass for them that we all pay for.” 

“The AWU has spent 14 years fighting for a reservation to restore sanity to our gas market and stability for gas-reliant workers and industry. The government can’t let it fall at the last hurdle.” 

 

Innes Willox, Chief Executive of Australian Industry Group 

“Australians got a raw deal when Eastern gas exports began: all the risk of price swings from increasingly chaotic overseas energy markets, with no guarantee of local gas for local usage. More than a decade later we’ve produced more gas than ever before, but prices have soared and gas users have done it tough or shut up shop.” 

“The gas reservation debate looks complex but it really isn’t. Will we do now what we should have done before, and put strong clear and fair expectations on gas exporters ahead of their next wave of contracts? Or will we fudge it until it’s too late, and condemn Australia to decades more of costly insecurity?” 

 

Dr Adam Bandt, CEO of the Australian Conservation Foundation 

“Big gas has gamed the system for too long, and it’s time the government reined it in and delivered a loophole-free reservation scheme. 

“Instead of giving free passes to big corporations like Santos to keep on polluting, the government must ensure that any gas reservation puts Australian homes and industry first by diverting existing gas back to Australia, not rewarding speculative schemes for expensive new gas basins.” 

 

Dr Cassandra Goldie, CEO of Australian Council of Social Service 

“Gas exports have led to a tripling of domestic gas prices. A functioning national domestic gas reserve is critical alongside the transition to renewable energy, to bring down energy prices, inflation and relieve cost of living pressures – especially for those on the lowest incomes. 

“The design of the reserve must put the interests of people in Australia first, not highly profitable exporters and foreign investors. The Labor Government must shut down loopholes and prevent corporate carve-outs and gaming.” 

Media contacts: 

Australian Industry Group: Gemma Daley (0418 148 821) 

Australian Conservation Foundation: Freya Cole (0477 638 774) 

ACOSS: Media mobile (0419 626 155) 

Australian Workers’ Union: Anil Lambert (0416 426 722) 

 

Summary of proposed amendments 

The group has presented the Government with a series of changes to the draft reservation Bills to make sure the scheme can meet its goals and serve the people of Australia. The Bill must be made lobbyist-proof and strengthened to: 

• Ensure every gas exporter is required to contribute to the domestic market fully and fairly. 

• Guarantee that the supply of gas (or investment in alternatives) will be made available based on the amount of gas Australia needs to achieve downward pressure on prices. 

• Prevent exporters from further raiding the local gas market – driving up prices and drying up supply for Australian manufacturers and households. 

• Make clear in law that the reservation cannot be gamed with dodgy gas deals with third parties or promises of speculative and expensive new gas basins, which would function to reserve high-cost, high-emitting gas for Australians. 

• Hold exporters to their obligations to reserve gas over time and properly supply Australia, and recognise where they do more than asked. 

If the Albanese Government is serious about its commitment to deliver a workable gas reservation that serves the interests of people in Australia, we urge the adoption of these amendments. It’s time we put Australia first and back our manufacturers, workers, households and the environment.