LABOR HIDES GAS RESERVATION MODELLING AS INDUSTRY WARNS OF INVESTMENT AND FUEL SECURITY RISKS
The Albanese Government is refusing to release key modelling underpinning its proposed gas reservation scheme, despite warnings the legislation could discourage domestic gas production, undermine investment and threaten Australia’s liquid fuel security.
Senator Susan McDonald said recent Estimates hearings exposed serious concerns about the Government’s proposed requirement to make gas equivalent to 110 per cent of forecast domestic demand available to the Australian market.
Department of Industry officials confirmed modelling, including work commissioned from ACIL Allen, had informed Cabinet decisions but declined to make the underlying analysis available to the Economics Legislation Committee.
“Labor is asking Parliament to approve a major intervention in Australia’s gas market while refusing to show us the figures underpinning its decisions,” Senator McDonald said.
“Everyone wants affordable and reliable gas for Australian households and manufacturers, but the Government needs to demonstrate that its scheme won’t drive away the very investment needed to secure future supply.”
Beach Energy warned that forcing excess gas into the market could temporarily lower prices but make southern Australian production uneconomic, discouraging future investment and potentially increasing prices in the longer term.
The company also raised a significant fuel security concern, explaining that southern gas production yields oil used by Australian refineries to manufacture diesel, aviation fuel and other products.
“If this policy crowds out southern gas production, we could also lose domestic oil production and become even more dependent on imported fuels,” Senator McDonald said.
“At a time when Australia’s liquid fuel security is already a serious concern, that’s a potential consequence the Government cannot overlook.”
The Business Council of Australia also called for greater transparency around the modelling, while Shell and Australia Pacific LNG raised concerns about provisions governing gas trading, supply obligations and investment certainty.
Industry witnesses warned that unclear definitions could disrupt established arrangements allowing gas producers to transfer supplies between projects, particularly during maintenance shutdowns.
“These issues are not minor, they go to whether gas producers can operate efficiently, invest with confidence and continue supplying Australian businesses long into the future,” Senator McDonald said.
“The Government says its modelling accounts for the effects on domestic producers. If that’s the case, it should release the relevant analysis.
“The Albanese Labor Government’s policy must not discourage production and leave Australians facing tighter supplies and higher prices down the track.
“If companies are forced to make financial decisions to invest overseas, Australia loses jobs, taxes and royalties.
“The Prime Minister’s refusal to be transparent is astonishing considering how much is at stake. He is effectively asking gas companies, investors and workers to trust him, and his record means that’s quite a tall order.”
ENDS