Australia moves toward domestic gas reservation policy

The Australian federal government is advancing a domestic gas reservation scheme designed to ensure a steady supply for local consumers and manufacturers. The policy will require gas producers to set aside 20 per cent of their annual exports for the Australian market, a move Energy Minister Chris Bowen described as fundamental reform to ensure gas is used by Australians first.

While the Labor government originally pitched the plan as a method to lower electricity prices, it is now being framed as a way to support the manufacturing sector. The legislation is expected to pass through the federal lower house shortly. The Liberal Party has indicated support for the principle of the deal, though some concerns remain regarding new gas production in Western Australia.

Industry body Energy Networks Australia (ENA) has commented on proposed Australian Energy Market Commission (AEMC) gas network reforms. ENA stated that the reforms should include safeguards and long-term outlooks to ensure costs are shared fairly among customers. ENA emphasized that regulation must allow for regional differences and avoid making permanent changes to asset values based on uncertain forecasts.

The Greens have criticized the policy, arguing it may encourage environmentally damaging projects and serves as a windfall for gas companies rather than addressing the need for higher resource taxes.