Nicolette Boele (Bradfield, Independent) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) south-east Australia is at risk of seasonal gas shortfalls by 2027 as a result of prioritising our export market;

(b) there are several reasons for this upcoming shortfall, including:

(i) gas exports commenced from Gladstone, Queensland in 2015;

(ii) within a decade, 75 per cent of the total east coast gas volume demand was being exported; and

(iii) since 2017, successive Commonwealth Governments have introduced overlapping, interim measures to avert shortfalls;

(c) in June 2025, the Government announced it would conduct a review into gas market regulation; and

(d) Australians deserve, and it should not be difficult to achieve, a sufficiently predictable, reliable, affordable and transparent market; and

(2) calls on the Government to:

(a) only allow uncontracted gas to be exported after it has been offered to the domestic market at a reasonable price;

(b) end the cycle of changing government and regulator intervention in the gas market;

(c) conduct a thorough consultation process with key stakeholders for the purpose of reviewing the Future Gas Strategy, including to more deeply consider the impact of different gas users across the economy, the role of demand management and Australia's climate change policy commitments;

(d) establish a clear framework for the deployment of gas in the transition to a net zero economy, to give suppliers, investors, and large gas users the confidence to invest in clean technologies and infrastructure; and

(e) anchor the approach to gas market regulation in two key objectives:

(i) impose an ongoing obligation on LNG exporters to supply the domestic market, by embedding it in their export licences; and

(ii) improve transparency, by transferring the gas market monitoring role from the Australian Competition Consumer Commission to the Australian Energy Regulator, with a requirement to regularly aggregate and publish price and contract terms, and market imbalances.

This motion speaks to the heart of our energy security and our economic future. It asks a simple question: will Australians have access to affordable, reliable energy in the years ahead, or will we allow uncertainty and inadequate regulation to undermine our prosperity? My motion is about effective gas market regulation, and, upfront, I want to make something very clear. We have enough gas in this country. We do not have a gas supply problem. We have a gas export problem. To the extent that we have shortfalls predicted on the east coast, it is an infrastructure and distribution problem, not a problem of production. As always, we need to be clear about the facts.

Two developments have transformed our gas market. First, in 2015 liquefied natural gas exports began from Gladstone, Queensland, and within a decade 75 per cent of total east coast gas demand was being exported overseas. Overall, around 80 per cent of gas produced in Australia is being exported. Second, production from traditional, south-eastern fields, particularly Gippsland, is falling sharply. Peak day production capacity there will drop by 58 per cent between 2024 and 2028.

Governments have tried to manage this risk since 2017. We've seen the Turnbull government's Australian Domestic Gas Security Mechanism, codified to become a Heads of Agreement under the Morrison government, and then the Gas Market Code introduced by the Albanese government. These measures have helped avert shortfalls—but at a cost. Buyers and sellers alike are frustrated. Long-term contracts have shrunk, and short-term deals have surged from 28 petajoules in 2021 to 79 petajoules in 2024. This is not stability; this is volatility, and Australians deserve better. They deserve a gas market that's predictable, reliable, affordable and transparent. It should not be difficult to achieve this, and yet, today, our system depends on ad hoc ministerial decisions and quarterly negotiations with LNG exporters.

This is no way to run a market—a market that underpins manufacturing, electricity generation and household energy security. Worse still, the fact that a huge majority of our gas is exported means Australians may be in the absurd position of paying more for our gas than people in international markets do. Japan has even started reselling the Australian gas that it imports, which is surplus to requirements, at a substantial profit. Something has to give, and my motion sets out a clear path forward.

First, it calls for the government to ensure that uncontracted gas is offered to the domestic market at a reasonable price before it is exported. This principle is not radical; it's common sense.

Second, it calls for an end to the cycle of changing interventions. We need a single, integrated framework that operates continuously, not a patchwork of mechanisms that require constant activation. Export licences should carry an ongoing obligation to supply the domestic market.

Third, the motion calls for a thorough review of the Future Gas Strategy, and that review must go beyond supply. It must consider demand management, the impact of gas users across the economy and our climate commitments. Gas will play a role in the transition to net zero, but what role and for how long? Without clarity, investors cannot make decisions about pipelines, storage or regasification of terminals, and, without those investments, the risk of a south-east gas shortfall will increase.

Fourth, the motion calls for transparency. Today, the ACCC monitors the gas market while the AER oversees the broader energy system. This duplication creates confusion. The monitoring role should move to the AER, supported by AEMO's forecasting, with a requirement to publish aggregated price and contract data and market imbalances. Transparency is the foundation for efficiency and trust.

Finally, the motion anchors reform in two objectives: an ongoing obligation on LNG exporters to supply the domestic market and improved transparency through regular publication of market data.

These changes will give suppliers, investors and large users the confidence that they need to invest in clean technologies and infrastructure—and this is not just about gas. It's about energy security, economic competitiveness and the credibility of our transition to net zero. If we fail to act, manufacturers will face higher costs, householders will face even higher energy bills, and our electricity system will face greater risk during peak demand. If we succeed, we'll have a market that works—one that delivers affordable energy, supports jobs and aligns with our climate goals. (Time expired)

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

Is there a seconder for the member for Bradfield's motion?

Zali Steggall (Warringah, Independent) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Thanks to the member for Bradfield for this resolution—I agree. Australians deserve a gas market that's predictable, reliable, affordable and transparent, not a radical proposition. Right now, our gas system defies even the gravity of basic economic logic. The consequences of this are felt in households, factories and businesses across the country. We face a projected seasonal gas shortfall by 2028, not because we don't have enough gas but because the gas that comes from beneath Australian soil is prioritised for customers offshore rather than customers onshore. Pre-pandemic gas prices sat at around $3 or $4 per gigajoule; today they're at around $10.30.

When I said that our gas prices defy the gravity of conventional economics, I meant this: domestic gas demand has actually fallen. Supply has sustained but been shunted off overseas. That's why falling demand hasn't been reflected in prices. The market is fundamentally distorted. Over decades, governments have entrenched this, largely by inaction, hoping the problem would go away. I'm proud though to say that, in the last term, this government was the first to have the guts to tackle this, even with the active resistance of the coalition. In late 2022, the government capped prices at $12 per gigajoule despite warnings from exporters and foreign buyers, who predicted the worst. Those predictions soured. We stepped in at a moment of crisis, and we were right to do so. Access to stable, affordable gas is not an industrial preference; it's a sovereign capability necessity. It'll be essential to the transition to net zero.

Predictable voices will tell you, 'All we need is more supply.' That's misleading. We need supply at the right prices, and we need contracts that are fair. Manufacturers often tell me they're unable to get contracts longer than 12 months because of the profiteering obsession of gas companies holding out to ramp up prices beyond the contract period. This is intolerable. Tinkering at the edges is not enough to fix this. The ACCC has doubted that past interventions aren't having a perceivable effect. We need strong action—a complete rethink of the terms on which Australian resources serve the Australian national interest.

In this country, it's almost like we're embarrassed about possessing so many resources and are so timid we feel we just have to cop what overseas companies and buyers tell us—what rot. Or we are spooked by this argument: if we demand too much these companies won't invest in new fields—lame. Former WA premier Alan Carpenter stared down that threat and established a west coast reservation system. Our generation trades on the courage of past generations without displaying the spine to do the same today. This timidity has allowed a structural flaw to fester, with domestic prices influenced by export prices and Australian users competing with Tokyo, Seoul and Singapore for Australian gas. We beg for the scraps—forced to cop globally indexed pricing that has absolutely no relationship with the cost of production. Our gas, our prices—that should be the bedrock, the cornerstone, of our thinking. The cost of doing business in this country, for multinational gas firms, is that they must provide a gas price in line with historic pre-pandemic levels. This should apply to any new field that's open, too. We absolutely need to establish a gas reservation policy to meet our local needs in this decade, not in the next.

We must stand firm on another issue. We cannot tolerate being lectured to by overseas buyers telling us what we can do with our gas when they on-sell the gas they get from us to make a massive profit. Last year, Japan resold a third of the LNG it had purchased from Australia, making over $1 billion in profit and in quantities large enough to supply our domestic industry for a year. We should reshape the Australian Domestic Gas Security Mechanism to allow the government to intervene, adjusting future supply based on past resold volumes. This nation should not be reduced to pauper status. We should be an energy superpower, and that should translate to economic strength. That's the ambition we should have no hesitation in pursuing. We may also need to prevent the sale of uncontracted gas offshore and ensure companies don't sidestep this by ramping up sales of uncontracted gas to drain what's available for locals.

We cannot wait for a better deal for this country. We should have the ambition to pursue better for this nation, and we should reject the naysaying and the fearmongering by those who want to tell us that we should cop something that we all in this place know we should not.

Zali Steggall (Warringah, Independent) Share this | Link to this | Hansard source

I rise to support the motion from the member for Bradfield. Australians deserve a fair, affordable, transparent and predictable energy system and not the export distorted market that we have today. This motion highlights an underlying truth in Australia's energy debate—Australia does not have a gas shortage problem. We have lots of gas, but, instead of prioritising our domestic markets, we allow companies to exploit it for great profit. We do not need more gas approvals. What we need are rules that ensure gas in Australia stays for Australia and that we fast-track transition off gas for households, where electrification is much more efficient, affordable and better for their health and their wallets. We don't need more gas; we just need to be smarter about where we use it, what we have and who we prioritise.

It's been ten years since we started exporting LNG. We now export around 80 per cent of the gas that we produce. A small group of LNG exporters control 90 per cent of our proven and probable gas reserves. You will hear them crying poor and complaining about transition, and the ads on radio and TVs have accelerated—all talking about the natural benefits of gas and how gas is part of our transition and we should all need it. What they don't say is the price that Australians are paying.

Australian users of gas have been paying the price of poor policy. Instead of benefiting from their natural resource, domestic users are forced to compete with international markets. Since 2015, consumption for gas in eastern Australia has fallen by 32 per cent, but prices have tripled. Pressure on our domestic households and business remains unacceptable. Australians pay four to seven times more for gas than other large gas-producing nations, including the US, Russia, Qatar and Canada. According to ACOSS, people on low incomes bear the brunt of this, spending five times more of their income on energy than high-income earners. This is not a market that's delivering for Australians.

In 2023-24, Australians paid more than four times on HECS or HELP debts than our gas companies did on PRRT. Instead of rules to protect our domestic requirements, exporters have strong incentives to maximise exports. Projects like Santos's GLNG project in Queensland have siphoned gas from the domestic market to fulfil export commitments. It is wrong. For too long governments, have been applying temporary bandaid solutions to avoid shortfalls, building an energy system reliant on fossil fuels and continuing to let the gas industry shape policies long after the science shifted. However, as the government looks to reform the gas market, we must recognise the broader climate reality—1.5 degrees is not just a goal; it's a threshold, beyond which things will change dramatically. Here we are, the week after COP30, and very little was achieved.

Gas driven by methane emissions is a major contributor to global warming. Australia's methane accountability is jeopardising our emissions reduction targets. We still do not have proper accounting, measuring and monitoring of methane emissions from LNG facilities. We know methane emissions are expected to account for 68 to 95 per cent of Australia's targeted emissions by 2035, and, unfortunately, Australia continues to underreport methane by as much as 60 per cent, according to the International Energy Agency. We cannot fix the gas market while ignoring the parallel climate failure that it represents.

Last week, I sent an open letter, alongside 100 other leaders from across politics, academia, NGOs and business, to the Prime Minister and Minister for Climate Change and Energy, to sign on to the Mutirao road map. The pledge would look to construct a phase-out of fossil fuels. I'm pleased to hear that, over the weekend, Australia signed up to the declaration, on a just transition away from fossil fuels, recognising the need to phase out inefficient fossil fuel subsidies as soon as possible. With the lack of funding received by Australians on the PRRT—I was strongly opposed to the way the government structured that legislative change—I look forward to hearing from the government on how they propose to now meet these new commitments. There are many inefficient fossil fuel subsidies in the Australian system that we can talk of—in particular, the diesel fuel tax credit.

I support this motion because it moves us towards a fairer, more secure and more climate aligned energy system—simple measures and ones that the government should have the political will to pursue. Now the government must act with ambition and integrity to ensure reforms actually deliver for Australians.

Zaneta Mascarenhas (Swan, Australian Labor Party) Share this | Link to this | Hansard source

I am open to a conversation about how sometimes the gas industry does not work for all Australians. This is a government that believes in the national interest and is not afraid to stand up for it. Similarly, antagonising industries that Australia relies on is not the answer. We will defend the public interest in the names of jobs and energy security. I know this because I remember when, before Labor governments state and federal, in WA 15 years ago, we had $170 billion' worth of LNG projects happening in the North West Shelf but not one of those projects was being developed in WA. Hundreds of engineers lost their jobs, and the workshops were empty. That experience taught me something important: when governments fail to plan, Australians pay the price. We cannot afford to repeat the mistakes.

Today the Albanese Labor government is taking gas supply and energy transition seriously. We know that gas markets must work for households, businesses and our economy, not just for exporters. That is why we opened a comprehensive gas market review earlier this year. We received 112 submissions, and the departments are now working through them to make sure our regulatory framework is strong, stable and fit for the future. We have acted.

Since coming into government, we have strengthened the heads of agreement with LNG producers so gas is offered to Australians before it can be exported. We have reformed the Australian domestic gas security mechanism, giving us the power to reserve gas if there is a shortfall. We have also introduced the gas market code, securing more than 644 petajoules of gas for Australian homes and businesses. Given the market operator's stronger powers to prevent supply crises, let's be clear, there's been no gas shortfall under this government. We are delivering practical solutions to keep gas affordable, reliable and, at the same time, we are driving the transition to clean energy. We've legislated emissions targets, reformed the safeguard mechanism and invested in renewable energy at record rates. Since May 2022, we have added over 18 gigawatts of wind and solar, enough to power six million homes. Wind and solar capacity is up 45 per cent since we came to office.

But while we accelerate renewables, we do not ignore the five million Australian homes that still rely on gas for heating, cooking and hot water. Industries also need gas to process critical minerals and to manufacture batteries, solar panels and wind turbines. Gas, unlike coal, is flexible. It can be switched on and off in minutes, making it essential to back up the variable renewable energy generation. Our future gas strategy makes this clear. As existing sources decline, we need to replace them to keep prices down, keep the lights on and maintain energy security.

The Albanese government is not a caricature the opposition makes us out to be. However, the opposition does beggar belief lately, especially regarding gas, energy and resources. How is this certainty for industry and households—net zero or maybe not net zero, or definitely not net zero? That is possibly in Paris or not in Paris, if the National Party will let them. We won't sugar coat it. We're too exposed, we were too exposed leaving COVID, when the war in Ukraine began a global gas price shock and exposed the weaknesses. Sometimes there is still too much exposure. Thanks to a decade of neglect by the opposition, we are fixing the mess, planning for the future and doing it in a way that supports jobs, industries and households.

We know gas will play a key role in the orderly transition to net zero. We are ensuring that Australians also have the energy they need, while preparing for tomorrow. When people say that the government isn't taking gas supply or energy transition seriously, we must look at the facts and recognise that defending the national interest cannot be done with just ideals. We are guided by real consultation and experts and we work constructively with industry to get results. I note that when we needed to intervene into the gas market and cap prices at $12 a gigajoule, we did that to make sure we help Australians because that's what the Albanese government does.

Debate adjourned.