The Australian Petroleum Production and Exploration Association (APPEA) has submitted its response to the consultation on the Australian Domestic Gas Security Mechanism (ADGSM).
According to APPEA’s submission, the proposed amendments risk compromising Australia’s standing as a reliable trade and energy partner while failing to address the fundamental causes of predicted domestic gas shortfalls.
APPEA urged the Australian Government to prioritise additional gas supplies rather than jeopardising international partnerships with export law changes and jeopardising the economic benefits these exports provide all Australians.
The Australian Competition and Consumer Commission (ACCC) has unequivocally stated that investment in new gas supply is the solution to the domestic gas market’s expected deficits.
The proposed export rule changes, according to APPEA, expand ministerial authority to curtail exports and potentially give essential trading partners such as Japan as little as 30 days’ warning for breaching critical gas contracts.
APPEA Chief Executive Samantha McCulloch stated that rather than addressing the core reasons for potential deficits, the measures essentially shift the region’s domestic gas market uncertainties to Australia.
“Importers of Australian natural gas are key investors in our energy industry and our economy more broadly. These nations are also our diplomatic and national security partners in the region,” McCulloch said.
According to McCulloch, the Federal Government’s domestic market interventions, particularly continued price regulation, have generated great uncertainty and are already impacting additional domestic gas supply, which is exactly what the ACCC says is required.
“In the next stage of these cascading interventions, the government is proposing to disrupt gas export contracts to our important allies in Asia,” McCulloch stated.
She added that the sector is committed to securing domestic supply, and exports play an essential role in this, with LNG contracts often supporting the economics of new domestic gas supply while giving billions of dollars to the Australian economy.
In keeping with recent ACCC recommendations, APPEA has urged that the Commonwealth Government prioritise boosting home gas supplies.
“The government is squeezing gas supply which independent research has found will increase the pressure on the budgets of households and businesses,” McCulloch said.
McCulloch stated that increased investment in natural gas is the best long-term option to ensure energy security and reduce family prices.
According to McCulloch, the procedures for triggering the ADGSM must be stronger and more objective, with less ministerial discretion and more warning offered to LNG producers and buyers. Any assessment of shortfalls must be objective and honest, she emphasised.
“Further, the ADGSM reforms cannot be considered in isolation and must align with the ongoing Heads of Agreement (HoA) and Code of Conduct discussions and processes,” she added.
