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Australian gas exporters will be forced to keep 20 per cent of new supplies in the country under a finalised East Coast reserve plan to avert catastrophic shortages and drive down prices.
Unveiling the plan on Thursday, Energy Minister Chris Bowen said it would push prices down by ensuring “a modest oversupply of Australian gas use”.
“We spent the last five months consulting deeply right across the industry about the details, and today, we can announce that we have settled on a model which we will seek to legislate through the parliament,” he told a press conference in Sydney.
“That model will involve 20 per cent of Australian gas exports being reserved for Australian use first.
“There’ll be a requirement on gas producers to sell that 20 per cent to Australian users.
“This is a carefully calibrated model which ensures that Australia’s national best interests are put first.”
The scheme, which kicks in mid next year, came after years of warnings that Australia would face gas shortages in the near-term without action, with an inquiry by the consumer watchdog warning supply could fall short of East Coast demand by 12 petajoules in July.
The sector has also drawn criticism in recent years amid price surges spurred by global energy shocks.
While Australia is among the top global gas producers, there were no requirements to ensure domestic supply.
Mr Bowen said that the government had spoken with key countries that buy gas from Australia and that all existing contracts would be honoured.
“We have consulted closely and worked closely with trading partners to ensure that it’s well understood around the world that Australia will always be a reliable supplier of energy, but will be a reliable supplier of energy with Australian needs being catered for and Australia needs being met,” he said.
“Australia has been the only gas exporting country in the world without some form of reservation.”
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