Natural gas is vital to Australia's prosperity, our manufacturing industry and our energy security. It is one of our country's greatest natural assets, and we have a responsibility to make sure Australians benefit from the resources beneath our own soil and waters. Gas is essential to the production of products we rely on every single day. It helps our manufacturers produce steel, aluminium, glass and fertiliser. It provides households with energy for cooking and heating, and it plays an important role in backing up our electricity system, helping keep the lights on when the demand is high and renewable generation is not sufficient. The gas industry also supports tens of thousands of Australian jobs, attracts investment into our regions and generates over $60 billion a year in export income.

I am a strong supporter of the Australian gas industry. I want to see it continue to invest, create and grow. But supporting our gas industry also means making sure our domestic market has the reliable and affordable supply it needs. Australian gas should not simply be a resource that we extract, export and sell to the highest bidder overseas. It should support Australian families, Australian businesses and Australian manufacturing. When the east coast LNG market was opened up, Australians were promised this would not come at the expense of domestic supply. But the development of the export industry fundamentally changed the market, with some companies entering into contracts which export more gas than they produce. The result has been a market in which Australian businesses are competing with overseas buyers for access to gas produced here at home.

This is a problem when gas is an essential input into Australian manufacturing. It is a problem when businesses cannot secure affordable long-term contracts with confidence. And it is a problem when families are left dealing with high energy bills and the rising cost of living. We have seen wholesale gas prices rise significantly from the levels that Australians enjoyed before the LNG export industry transformed the market. In 2014, Australia had some of the cheapest wholesale gas prices in the world, at $4 a gigajoule. Today that sits at $14 a gigajoule. These pressures matter in my electorate of Holt. Across Cranbourne, Clyde, Narre South, Hampton Park and surrounding suburbs, families are working hard to keep up with the cost of housing, groceries, transport and energy. For a young family, every increase in the household bills matters. For a local business trying to keep its doors open, higher energy costs can mean difficult decisions about staffing, investment and expansion. And, for Australian manufacturers in places like Dandenong South or Cranbourne West, the cost of energy affects their ability to compete, employ local workers and keep production here in this country. We cannot control movement in international energy markets but we can make sensible decisions about how we manage our own resources and strengthen our resilience to those movements. That is what this legislation seeks to do.

We do not have to look overseas to see how a domestic gas reservation policy can work. We can look west. In 2006, Western Australian Labor Premier, the honourable Alan Carpenter, introduced a domestic gas reservation policy requiring new gas developments to make the equivalent of 15 per cent of their gas available for the domestic market. The policy was designed to secure long-term energy supplies for Western Australians, while allowing the state to develop its significant LNG export industry. This has seen gas remain consistently lower on the west coast than in the east coast markets. It has also seen significantly less volatility, with the market highly insulated. During the peak of the 2022 energy crisis, while the east coast market spiked fivefold to over $50 a gigajoule, the west coast gas market remained stable at $8. This disparity is why, in 2025, we embarked on the gas market review. This review recommended that the Australian government adopts a national domestic gas reservation scheme requiring exporters to reserve up to 20 per cent of their annual export production for domestic use. The Domestic Gas Reservation Bill 2026 seeks to implement that recommendation.

From 1 January 2028, gas exporters will be required to hold a gas export licence carrying a legally binding domestic supply obligation. The Australian Energy Regulator will oversee the scheme and determine the quantity of gas that must be supplied to the domestic market—up to 20 per cent of the suppliers production. The scheme is designed to collaborate domestic supply to 110 per cent of the forecast demand. That oversupply will provide a buffer against unexpected demand and increase the volume of gas available to Australian customers, putting downward pressure on prices.

The bill requires exporters to physically supply the gas required under the obligations. It is not enough simply to advertise gas for sale or make an offer that never results in delivery. Companies that fail to meet their obligations will face significant corporate penalties and may have their export licence suspended or cancelled. Licence holders will also be required to submit annual plans explaining how they intend to comply, followed by compliance reports which their performance can be assessed against.

This bill provides four flexible compliance mechanisms to help suppliers meet their obligations. First, the 90-to-10 rule provides flexibility between compliance periods. A company that delivers at least 90 per cent of its obligations in a year can make up the shortfall over the following three years. Equally, extra supply in one period can help offset a shortfall in a in another. Second, commercial arrangements with third party producers can allow exporters to obtain additional gas, providing the arrangements actually deliver additional supply rather than simply redirecting gas that would otherwise have entered the domestic market. Third, the framework allows for production of renewable gases, including biomethane and green hydrogen, to contribute towards compliance. Fourth, industrial demand reduction can be recognised where improvements genuinely reduce the amount of gas required across the economy.

This bill also recognises the reliance on Australian gas of our Asian security partners. for Japan, South Korea, Singapore, Taiwan, Australian LNG is vital, representing over a third of all gas consumed in these countries. At a time of such uncertainty in the world with the closure of the Strait of Hormuz, Australia has continued to be the bedrock of energy security for these nations. That is why this bill continues to respect existing export contracts. The bill provides an adjustment mechanism for pre-existing contracts entered into before 22 December 2025. It allows exporters to seek adjustments to their domestic supply obligations where there is no viable alternative to satisfy the local reservation requirement without defaulting on these commitments.

For Victoria, ensuring the supply of gas is significant. Victoria has a proud manufacturing history, and our future prosperity depends on retaining the capacity to make things here at home. Manufacturing provides skilled jobs, supports local supply chains and creates opportunities for workers at different stages of their careers. Gas remains an important input for a range of industrial processes, including high-temperature heat and the production of essential materials. When gas becomes unaffordable, manufacturers face pressure on their ability to compete with overseas producers. That is not an outcome we should accept without taking action. We should be giving Victorian businesses the confidence to plan for the future, rather than leaving them exposed to avoidable cost pressures, and we should be giving households greater confidence that Australian resources will help meet Australian needs.

I also want to be clear about what supporting gas means for our future. Australia is investing in renewable energy, storage and the infrastructure needed to modernise our electrical system. Gas has a role to play alongside those investments, particularly where reliable, dispatchable energy is needed to support the system. We need an orderly and practical energy transition that maintains reliability, supports workers and households and protects Australian industry. That means being realistic about the energy our economy needs today while preparing for the technologies that will power tomorrow. It means recognising the value of our existing resources, supporting responsible development and making sure that our energy policies put Australian households and businesses first. It means understanding that energy security is not simply about how much gas we produce; it is also about whether that gas is available at an affordable price when Australians need it the most.

Natural gas is one of Australia's valuable resources. It supports our economy, our industrial capacity, our international relationships and our energy system. As one of the world's largest gas exporters, Australia should be able to maintain a strong export industry while ensuring our businesses and households have the access to the gas they need. This bill establishes a framework to achieve that. By requiring exporters to oversupply the domestic market, the scheme will put downward pressure on prices.

For families in Holt, this is about taking pressure off those household bills. For Victorian manufacturers, it is about supporting investment, jobs and competitiveness. For the Australian gas industry, it is about maintaining their social licence by ensuring that the development of our resources delivers benefits at home as well as abroad.

I support a strong Australian gas industry. I support the workers, businesses and regional communities whose livelihoods depend on it. I also support making sure that Australians receive a fair benefit from the resources that belong to our country. This bill is an important step towards achieving that objective. That is why I commend the Domestic Gas Reservation Bill 2026 to the House.

I would like to thank the Minister for Resources, the Hon. Madeleine King, for her work on this legislation. As a proud Western Australian, the minister understands the importance of the gas industry to our national prosperity, and the experience of Western Australia's reservation policy provides valuable lessons for a national framework.