The Federal Government has announced it will formally investigate a domestic gas reservation scheme to sure up local supply.
Federal Resources Minister Matt Canavan said the government was examining how to bring down gas prices on Australia’s east coast and would look at Western Australia’s gas reservation scheme to see if something similar was applicable nationally.
Additionally, the government will also review pipeline regulation and prolong the Australian Competition and Consumer Commission’s (ACCC) monitoring of the gas industry until 2025.
Senator Canavan said Australia needed to be able to rely on its own industries.
“Imitation’s the best form of flattery and what we’re seeking to do is imitate the best things about what is working in the west and possible apply it to eastern Australia,” he said.
“Our market is different over here, we’ve got multiple state governments, a pipeline network that straddles those jurisdictions, so we’ve got to work through a lot of issues.
“Price and supply are inextricably linked.”
The Australian Petroleum Production and Exploration Association (APPEA) said it would work with the government to ensure confidence in the industry was restored, not undermined.
“Sensible reforms can improve the efficiency of the gas market and its operation,” said APPEA Chief Executive Andrew McConville.
“But market interventions can adversely affect confidence in the oil and gas sector and discourage new market entrants and supply diversity.
“We have consistently highlighted that while governments may seek to intervene in markets for political purposes, there should be no illusion that intervention is without costs – not least of which that sovereign risk can adversely affect confidence in the sector.
“The best way to put downward pressure on gas prices remains more gas supply.”
Australia is currently the world’s largest exporter of LNG but gas on the east coast can be as much as $7/GJ more expensive than those in WA.
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