New gas projects need to deliver gas to Australians, argues minister
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Federal energy minister Chris Bowen says new gas projects cannot export everything they produce, needing to offer at least something to the local market.
The government has launched a new review of the rules governing Australia's gas markets, aimed at ensuring the market is delivering enough gas for the local market at a reasonable price.
The review has sparked suggestions the government could be looking at an east coast gas reservation scheme, a version of which it opposed at the recent federal election.
A consultation paper released as part of the review points out that on the east coast, new gas projects are not opening at a pace required to fill the void left by retiring gas fields.
Chris Bowen has argued that, given the need for more gas on the east coast in particular, there is an expectation that new projects cannot be entirely export-focused.
"It's important that if there is new supply, that Australians have the chance to get access to it," he said.
"New supply wholly for export will not help Australia's domestic gas needs."
There are a number of major gas projects nationwide progressing towards approval, including Santos's $3.6 billion Narrabri Gas Project, which cleared a legal hurdle last month.
Pilot projects are already underway in the NT's Beetaloo Basin and Woodside has lodged applications for its massive Browse gas project off the WA coast.
The gas market review will look at three different sets of rules that currently govern Australia's domestic gas market all at once, rather than looking at each individually, as some were required by regulation.
The review will look at whether all three could be replaced with a "streamlined" set of rules to simplify how Australia's market works and ensure gas shortfalls are avoided.
Mr Bowen was asked whether it could lead to an east coast gas reservation scheme.
The minister pointed to the existing gas code of conduct as working effectively, but left the door open to further changes.
"[Resources Minister Madeleine King] and I will look at sensible, holistic, carefully designed, well-calibrated opportunities to ensure that Australian users get access to Australian gas," he said.
"I think that's reasonable. That's a reasonable request by the Australian people and one that we will continue to work to deliver."
The Coalition took its own form of an east coast gas reservation scheme to the last election, which was heavily opposed by Labor.
Samantha McCulloch from Australian Energy Producers said streamlining regulation was helpful, but also flagged that "restoring market signals" was vital.
"The review is an opportunity to future-proof the east coast gas market and ensure reliable and affordable gas supply for Australian households and manufacturers," she said.
"Natural gas will play a critical role in Australia's energy mix for decades to come.
"The east coast gas market needs to be fit-for-purpose to support continued investment in our abundant gas resources and avoid projected shortfalls."
The Coalition criticised the government's planned review, but did not reiterate calls for a reservation scheme like it took to the election.
Instead, shadow resources minister Susan McDonald said the government's interventions in the gas market needed to be dumped.
"The government's review will appropriately look at regulatory settings, including Labor's poorly designed gas market interventions," she said.
"Labor has pushed Australia's gas market to the brink, driven away new investment, stalled job-creating projects across the country and severely jeopardised our international credentials as a reliable trading partner."
By political reporter Tom Lowrey
The government has launched a new review of the rules governing Australia's gas markets, aimed at ensuring the market is delivering enough gas for the local market at a reasonable price.
The review has sparked suggestions the government could be looking at an east coast gas reservation scheme, a version of which it opposed at the recent federal election.
A consultation paper released as part of the review points out that on the east coast, new gas projects are not opening at a pace required to fill the void left by retiring gas fields.
Chris Bowen has argued that, given the need for more gas on the east coast in particular, there is an expectation that new projects cannot be entirely export-focused.
Chris Bowen said new gas projects would need to sell at least some of their gas to the domestic market. (ABC News: Callum Flinn)
"It's important that if there is new supply, that Australians have the chance to get access to it," he said.
"New supply wholly for export will not help Australia's domestic gas needs."
There are a number of major gas projects nationwide progressing towards approval, including Santos's $3.6 billion Narrabri Gas Project, which cleared a legal hurdle last month.
Pilot projects are already underway in the NT's Beetaloo Basin and Woodside has lodged applications for its massive Browse gas project off the WA coast.
The gas market review will look at three different sets of rules that currently govern Australia's domestic gas market all at once, rather than looking at each individually, as some were required by regulation.
The review will look at whether all three could be replaced with a "streamlined" set of rules to simplify how Australia's market works and ensure gas shortfalls are avoided.
Mr Bowen was asked whether it could lead to an east coast gas reservation scheme.
The minister pointed to the existing gas code of conduct as working effectively, but left the door open to further changes.
"[Resources Minister Madeleine King] and I will look at sensible, holistic, carefully designed, well-calibrated opportunities to ensure that Australian users get access to Australian gas," he said.
"I think that's reasonable. That's a reasonable request by the Australian people and one that we will continue to work to deliver."
The Coalition took its own form of an east coast gas reservation scheme to the last election, which was heavily opposed by Labor.
Industry welcomes review, Coalition calls for change
A key industry body representing the gas sector said the review was an important opportunity to shake up the complex rules governing the sector, and make more supply available to consumers.Samantha McCulloch from Australian Energy Producers said streamlining regulation was helpful, but also flagged that "restoring market signals" was vital.
"The review is an opportunity to future-proof the east coast gas market and ensure reliable and affordable gas supply for Australian households and manufacturers," she said.
"Natural gas will play a critical role in Australia's energy mix for decades to come.
"The east coast gas market needs to be fit-for-purpose to support continued investment in our abundant gas resources and avoid projected shortfalls."
Instead, shadow resources minister Susan McDonald said the government's interventions in the gas market needed to be dumped.
"The government's review will appropriately look at regulatory settings, including Labor's poorly designed gas market interventions," she said.
"Labor has pushed Australia's gas market to the brink, driven away new investment, stalled job-creating projects across the country and severely jeopardised our international credentials as a reliable trading partner."
By political reporter Tom Lowrey
