I rise today to speak on the Domestic Gas Reservation Bill 2026, which establishes licensing and domestic supply obligations for the Australian gas industry. The coalition haven't reached a final position on this bill. There is a Senate inquiry being undertaken at the moment, which will, I'm sure, come back with some recommendations. But I do have to say that, at this point in time, I would find it very hard to support this bill in its current form.

Let's go to the nub of the problem here, and it is that, on the east coast of Australia, there is a shortage of gas for not only household use but also industrial purposes, and that is creating some difficulties for business and also higher costs for homes and communities. How did we get to this position, you might ask? It's great to follow on from my friend, the member for Holt, a Victorian Labor member. The Victorian government has banned the extraction of gas in Victoria, so to now complain that they don't have enough gas is quite sobering, really. You ban the extraction of gas but then complain about not having any gas. That just doesn't make any sense to me.

When the current government won power federally in May 2022, the Minister for Climate Change and Energy said the Kurri Kurri power plant could not run on gas. He sacked Paul Broad, the CEO of Snowy Hydro, the owner of that facility, because Mr Broad said it wouldn't run on green hydrogen—it can't; it won't happen. Where are we today? We're desperate for gas to run the Kurri Kurri power station, and the minister now says that he never bought into the green hydrogen dream. Well, you could have fooled me and a lot of people through that time! Let's face it, gas has been demonised in this place for a long time now. We talk about the vitriol on social media. If you're a gas producer or you work in the gas industry, you'd certainly understand that particular scenario.

We're now in a situation where the government is looking to force gas exporters to supply 20 per cent of their gas into the domestic market. As has been mentioned by many of the speakers here and as you'd be well aware, Deputy Speaker Mascarenhas, as a proud Western Australian, Western Australia has a gas reservation policy. But it is a completely different beast to the one that we're talking about here. The first point that I'll make is that the WA gas reservation policy applies to new gas developments. Before a company makes an investment decision, it is aware of what its obligations are. So the companies that operate off the North West Shelf of Western Australia were aware of their obligations before they invested extraordinary amounts of money. In the case of INPEX's Ichthys project, it was $70 billion. They went to the Northern Territory, so they actually weren't caught up in the reservation policy.

The companies that operate off the North West Shelf are certainly supplying that domestic market, but there is a great deal of flexibility built into that program. While they have to provide 15 per cent of their production, it doesn't have to be done year on year. They can stagger that contribution over the life of the project. So, if domestic prices are low, they'll provide less gas into the market, and when domestic prices are high, they will provide more into the market. It's a price-buffering system for the Western Australian domestic market. At the end of the day, they've still got to supply 15 per cent of their production over the life of the project, so at some point that'll average out and it'll be 15 per cent per annum. That, I think, is a very good system for regulating price and supply.

What is being proposed with this legislation is forcing up to 20 per cent or 110 per cent of supply. If you oversupply a market by even one per cent and the buyers or the consumers in that market know that there's going to be an oversupply, then they're just not going to pay the price. They're just going to wait until that excess supply comes on the market and the price collapses. 'That's fine,' you may say. As Kevin Gallagher of Santos said to BlueScope steel, how about you supply us with some discounted steel? Everybody wants discounted gas, right? But nobody wants to provide discounted steel or other products that they produce from the gas.

One wonders why the gas industry is being forced to provide, effectively, a discount to their customers. What that means is you get a 20 per cent additional supply or oversupply into the market. If you're a domestic producer and you don't have an export market to effectively offset a very low price on the domestic market, then there's your business gone. Domestic suppliers of gas will literally go out of business overnight because they don't have the other 80 per cent that they're sending offshore. They supply the domestic market, and they take the domestic price.

The medium- to long-term effect of this policy will be that we will have less gas available, there'll be less investment and we'll all be paying higher prices. We'll see the gas industry go offshore. Already, companies like Woodside are looking to invest in the United States. While there are many in this place who would like to see that, I'll just remind people that the gas industry contributes $105 billion to the national economy. The coal industry, by the way, contributes $165 billion. That's $265 billion from those two industries contributed to the Australian economy. I haven't seen anybody tell me how we're going to replace that national income.

This legislation, while it might provide a short-term sugar hit for the states that have not extracted their own gas—I actually spoke to a Western Australian industrial company the other day who has a plant in Melbourne that's been sitting idle for 10 years because they can't get gas. That is what this problem is trying to solve; I get that. I get it, but why should producers in other states have to bail out Victoria? I don't understand that. By the way, this particular company was moving its operation to Houston, and they said that they could have approvals and be up and running within 12 months. They estimate the same process here would take five to seven years.

While the intent of the bill is to make more gas available to the local market, which I absolutely support, and a reservation policy of some description is a worthy goal—and I have said to my very good friends in the gas industry that to retain their social licence they will need to supply affordable gas into the domestic market—this current legislation is going to have the opposite effect in the medium- to long-term because it will crush the supply going forward. The Chamber of Minerals and Energy, which is the peak minerals and energy body in Western Australia, have called for amendments to this bill, and I think that some of them are very worthy of consideration.

The bill currently gives the minister discretion, and the CME say that this shouldn't be part of the bill; it should be much more specified. If you're going to make an investment of many billions of dollars in a future project and you don't actually know exactly what your supply obligations are going to be—you're having to wait for the minister to make up their mind—then that makes it very difficult to plan and very difficult to make that final investment decision. So I a hundred per cent agree that that needs to happen.

The other thing that needs to happen is that Western Australia needs to be exempted. We—as you would know, Deputy Speaker Mascarenhas—already have a reservation policy. The reservation policy is working well. The Premier, Roger Cook, is coming to Canberra tomorrow, I believe, ostensibly to talk about backpackers—and all power to him; good on him, because that's an important issue, particularly in regional WA and across my electorate. But I reckon he might be talking about the gas reservation policy as well, while he's here, because to create this uncertainty for the Western Australian producers is going to cost the Western Australian economy. It is going to put a brake on future investment, and that will cost the people of Western Australia dearly. So, with a $35 billion contribution to the Western Australian economy, we need to look after our gas producers in WA. I say: all power to Roger Cook for coming to Canberra, and let's hope that he can convince the Prime Minister and the Minister for Climate Change and Energy that Western Australia needs to be exempt from this program.

The other thing that no-one's been able to explain to me is whether Western Australian producers will be forced to physically supply the gas. I mean, yes, they can make it available at the wellhead, but it would be pretty costly to get it to Melbourne—if you actually could; I'm not sure that they've actually gone ahead and built an unloading facility there. But no-one in the industry has been able to tell me whether they understand whether that's their obligation or not—to actually physically deliver the product.

These are key issues for Western Australians and Western Australian producers, and, I'm sure, for the Western Australian government—and, hopefully, for Western Australian members, to fight for WA, to protect our industry. It's a magnificent contributor to our state. It employs thousands of people, in very well-paid positions. So I would expect that every Western Australian member in this place will be standing up for WA and will be making it very clear to their respective parties that WA has a system that works and that we're going to fight to protect that system.