Tempers fraying Down Under Australia’s gas reservation policy has been the center of attention for political sparring ahead of elections. Increasingly, the administration of Western Australia has institutionalized this discriminatory policy for decades. Most notably, it orders gas exporters to put the demand on the domestic market first. The policy was once supported by the Labor Party. They’ve not gone on record supporting it by name as a dollar-for-dollar replacement for this year’s election cycle. Fortunately, Australia’s new Prime Minister Anthony Albanese appears prepared to do just that. If necessary, he will enforce the law to make gas companies deliver for the Australian market, underpinned by the government’s action to cap gas and coal prices in 2022.
The Coalition cleared up any confusion about their position. As for Exporting, they pledge to reserve the majority of uncontracted gas for domestic consumption. They contend that such a move would be effective at reducing power prices nationwide. In a statement, Shadow Energy Minister Ted O’Brien hailed this as proof that Australia is “awash with gas.” He recommended insulating the domestic market from international turbulence by stabilizing long-term capacity investments. The Coalition has spent more than a year developing this policy. Their aim is to bring back onshore up to 20 percent of gas that otherwise would flow to international markets, directing it instead to Australian consumers.
Government’s Stance and Powers
The new federal government already has emergency powers to order those gas giants to redirect their supplies for use in Australia. This capacity was supercharged with the introduction of price caps last year. Prime Minister Albanese has made it clear that he would not hesitate to deploy these powers should an emergency arise.
“We’ve actually put in place … a system where we can direct gas companies to secure domestic supply. We put that in place. Peter Dutton voted against it.” – Anthony Albanese
According to the Prime Minister, the legislation not only allows for but offers better tools to introduce a gas reservation policy if that is ever found to be necessary.
“Effectively it is [a gas reservation policy]. If it’s needed, the government has the power to do that.” – Anthony Albanese
Coalition’s Proposals
The Coalition’s plan is to guarantee that up to 20 per cent of uncontracted gas is reserved for Australian users. They argue that this blunt measure will reduce power prices by the end of the year. Shadow Energy Minister Ted O’Brien articulated a vision for a market less tied to international pricing fluctuations, insisting that abundant local gas resources should benefit domestic consumers.
“We will legislate using the Commonwealth’s significant legislative power to require that happens.” – Senator Paterson
Even on the Coalition’s own terms, there is plenty of skepticism that their plan would produce those expected economic results.
Political Dynamics and Challenges
The political calculus around the gas reservation policy is equally mind-boggling. While the Coalition pushes for more aggressive domestic gas reservation policies, they face criticism from opponents who question the feasibility and past opposition to regulatory measures.
“We won’t make the same mistake that Anthony Albanese did before the election when he lied to the Australian people 97 times and told them their electricity bills would go down $275.” – Senator Paterson
Senator Paterson’s remarks underscore a contentious narrative between the major parties as they vie for public trust and electoral support.
