After seizing control of the gas market with its new Mandatory Gas Code of Conduct, the Australian Petroleum Production & Exploration Association (APPEA) urges the Federal Government to prioritise addressing forecast gas supply shortfalls to avert blackouts and more cost-of-living misery.
APPEA stated the Gas Code places the Australian Government at the core of the gas market, determining the conditions for additional supply through bilaterally negotiated agreements with gas producers.
The Australian Energy Market Operator (AEMO) and the Australian Competition and Consumer Commission (ACCC) have both warned of gas shortage risks during peak winter months beginning this year and lasting until 2026-27, posing severe economic implications.
The ACCC stated that shortfalls “would place continued upward pressure on prices in the domestic gas market, as well as pressure on the electricity market.”
APPEA Chief Executive Samantha McCulloch said the Government’s Mandatory Code of Conduct will be tested to see if it can support the critically needed investment in additional gas supply.
“After more than 6 months of uncertainty as the Code was developed, investment in new gas supply is now urgently needed to avoid shortages that will add to energy security concerns and cost of living pressures for Australian households and business,” McCulloch stated.
According to her, the Government has acquired control of the east coast gas market, which comes with the obligation of ensuring enough supply and investment security.
“The industry has consistently demonstrated its commitment to the domestic gas market, including with 260 PJ of new indicative supply commitments made during the Code consultations,” she said.
Within the new framework established by the Gas Code and in creating the Future Gas Strategy announced in the May Budget, McCulloch noted that gas producers would collaborate constructively with the government and users.
“It is critical that the Future Gas Strategy delivers the long-term economic, energy security and emissions reduction opportunities associated with Australia’s natural gas resources while ensuring sufficient gas supply in the near- to medium-term,” McCulloch added.
