Blog: Why Australians aren’t benefitting from our own gas resources

By Emma Baillie, Young Nationals Treasurer

Australia is the world’s third largest LNG exporter despite ranking seventh for gas production.

With a relatively small population and an abundance of gas, it’s no wonder that gas companies continue to explore, extract and export Australian gas.

New projects, such as those in the Northern Territory’s Beetaloo sub-basin (covering an area of 28,000 square kilometres) have started reaching Final Investment Decision with gas from the Beetaloo poised to power Australia for decades and well positioned to solve the east coast’s chronic gas supply issues.

Yet, instead of building pipelines from the NT to the east coast, New South Wales and Victoria are building LNG import terminals to clumsily address supply shortfalls that could easily be met domestically.

It’s clear that the Australian gas market isn’t working for Australians and it’s costing government, industry and taxpayers in the process. '

In the last decade, energy bills in Australia have increased over 120% for Australian households and businesses alike. If it wasn’t for state and territory governments who are subsidising this mess, the cost to Australians would be a lot more.

That’s why it’s welcome news that the Federal Government has announced that it is adopting a domestic gas reservation policy for the east coast, similar to the one the Coalition brought to the last federal election.

When it comes to securing our nation’s energy future, Australians are not asking for much.

Households and businesses want cheap, reliable energy and a domestic gas reservation scheme keeps OUR gas here to make this possible.

Unsurprisingly, gas companies operating on Australian soil and extracting Australian resources are not a fan of this policy because it limits their ability to pump up prices in the gas market.

Claims from industry include that a domestic gas reservation scheme would effectively be a tax on gas development and a handbrake on economic growth.

Realistically, gas reservation policy or not, gas projects will continue to reach FID in this country.

Gas is a limited resource and Australia is lucky that we have a lot of it.

On the economic front, our GDP may get a bump with every new gas project and export, but our GDP does not fund hospitals or schools.

It doesn’t bring down energy prices and with workers flying in and out from gas wells and gas rigs, it certainly doesn’t create as many local jobs as it could for our regional communities.

Australians aren’t benefitting from our gas resources, we’re shipping those benefits out.

Domestic gas reservation policies also have the potential to draw criticism in relation to geopolitical implications.

As the first quarter of the “Asian Century” comes to a close, Australia should strive to be a strong partner in the region. After all, geographically, the Asia-Pacific is our backyard and major LNG export destinations like Japan are the neighbours we can rely upon for economic development and defence.

However, our energy system is in crisis, and in this moment of crisis, we cannot neglect the fact that we just don’t have enough gas for ourselves.

The adoption of a domestic gas reservation scheme boils down to whether we as a nation are willing to implement the mechanisms to power Australia for decades to come or power the Asia-Pacific.

The Nationals made it clear last election that a coalition government would bring gas companies to heel and deliver cheap, reliable energy to Australian households and businesses.

It’s about time that Labor finally made a domestic gas reservation scheme part of their plan for Australia’s energy future too, but there remains missed opportunities for regional economic development by linking up more LNG producers outside of the east coast (namely in the NT) to the rest of Australia.

The Young Nationals will continue to fight to ensure that Labor’s scheme doesn’t offer up a pipe dream of lower energy prices, but instead offers up pipelines of locally produced gas for Australian use.

This is the only way that Australia can get serious about its energy crisis and confront the role that excessive gas exports have played in creating this mess.