Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

The Senate will now consider the proposal from Senator David Pocock, which is also shown at item 13 on today's Order of Business:

The need for the government to legislate to redirect uncontracted export gas into the domestic market and bring down the price of gas and electricity for Australian industry and households, to recognise that Australian gas is for Australian households and businesses.

Is consideration of the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

With the concurrence of the Senate, the clerks will set the clock in line with the informal arrangements made by the whips.

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need for the government to legislate to redirect uncontracted export gas into the domestic market and bring down the price of gas and electricity for Australian industry and households, to recognise that Australian gas is for Australian households and businesses.

Fellow colleagues, representatives of states and territories in this great country, this urgency motion today is truly urgent when we look at electricity prices, when we look at Australian manufacturers and businesses doing it tough and when we look at smelters announcing that they are no longer viable. We hear many talk about a gas supply problem here in this country, but there is no such thing. We do not have a gas supply problem. We have a gas export problem in Australia. We are one of the biggest gas exporters in the world. We just happen to have a system that doesn't recognise that Australian gas actually belongs to Australians in the first instance and is happy to give away half of our gas for free—royalty free. And we have a situation where, as one of the biggest gas exporters in the world, we have a trillion dollars of national debt. Look at Norway, which has taken a different approach where they believe that natural resources belong to Norwegians and future Norwegians, and they are sitting on a $3 trillion sovereign wealth fund—two very different approaches. But that is not the focus of the urgency today. The urgency today is about pulling a lever that we have as a parliament when it comes to ensuring that Australian gas benefits Australian people, that Australian gas benefits Australian manufacturers, businesses and households.

Eighty-three per cent of gas extracted in Australia is used for LNG export. We export more than four times as much gas as is used domestically. Despite this, wholesale gas prices in Australia are more than three times higher than in the USA and seven times higher than in Qatar and Canada. Again, we don't have a gas supply problem; we have a gas export problem. According to the June 2025 interim report of the ACCC gas inquiry, there was 122 petajoules of uncontracted gas in 2024 and 79 per cent of that was exported. That is more than double the projected shortfall of 49 petajoules next year. We should be saying uncontracted gas has to go to Australian manufacturers, businesses and households. This is a solution that is on the table now. There is no sovereign risk. This is uncontracted gas that belongs to all Australians and I urge the government to actually do this. This is something you could do tomorrow, and I believe you would have the support of the vast majority of Australians. You would certainly have the support of the smelters and many other manufacturers who are really feeling the pain when it comes to gas prices.

We will potentially hear from the coalition saying that the answer is actually just more supply. 'We need more supply. We need more projects. We need Narrabri. We need all sorts of things.' Everyone knows that those things take a very long time to develop. And, again, we do not have a supply problem. We have more than enough supply. We just choose politically not to say Australian gas needs to benefit Australians. While that may be their line, they are missing the fact that uncontracted gas can solve issues for smelters and manufacturers. It would bring down the price of electricity because 17 odd per cent of electricity is firmed with gas, and that sets the price. Here is an opportunity.

The government will likely say: 'Well, we've got all sorts of reviews on foot. We've done a lot. We've got a $12 per gigajoule cap'—which I'm hearing is more of a floor at the moment. 'No need to hurry us. We've got time.' At the same time, we're spending billions of dollars of Australian taxpayer money bailing out smelters and heavy industry when we could just ensure that they had Australian gas to run on. This is nuts. Here is a solution that has broad backing from industry and from Australians, and I urge the government to get on with it.

Susan McDonald (Queensland, National Party, Shadow Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

If only solving our gas market problems was as simple as Senator Pocock has proposed. I truly wish it was. We can see that, in the last three years, Labor's interventions have not only failed; they have made the gas market shortfall even worse. We warned that the legislation that came into this place with the ink barely dry, poorly consulted, would result in worse outcomes, and what happened? The minister had to provide exemptions to the entire market. They have made our gas market more complex, more confusing and less secure. And guess what that means. It means there is less supply, prices have gone up and investors are worried.

Senator Pocock would have you believe that Australian gas being owned by Australians can be simply and easily extracted. Of course, that's not the case. These are multibillion dollar industries. For that reason, investment, certainty and confidence determine whether we bring more gas to market. In Australia, over generations, we have seen ebbs and flows of investor confidence, and what has undermined it the most? Unfortunately, it has been activist organisations like the Environmental Defenders Office currently, the Australia Institute and others who have talked down confidence in the Australian market. Some have funded appeals that have locked up more gas coming into the Australian market.

I'm delighted that in Queensland more gas reserves are being released. We're seeing great companies producing more gas for Australians. But guess where it's not happening. It's not happening in Victoria, where activists have shut down future gas investment in that state—the place that uses the most gas. It has a long history of gas production in the Bass Strait and a great reliance on manufacturing and domestic use. Guess where those jobs are going. They are leaving Australia because they cannot compete with the gas prices because it's not being produced locally. Moving gas around in pipelines costs dollars per gigajoule. It is expensive, so it's important that gas is produced where it's needed. But activist actions have meant that Victoria is off limits. The Narrabri project in New South Wales has been slowed for a decade. This is outrageous because those activists are undermining Australia's domestic energy security.

The gas market interventions that Labor has come in with more recently have clearly failed. They have had to introduce additional regulations, the gas code, to try and fix their mistakes. The ACCC has publicly blasted the government's intervention, stating that they have failed to reduce prices. They have worsened supply and have incentivised gas companies to produce less uncontracted gas for the domestic market and the increased shortfall risks.

We know that repeated interventions will not drive down prices or secure supply. They will only worsen it. The best example I can think of is Argentina in the 1980s. They followed exactly the advice that Senator Pocock and his advisers are providing, and what did that do? It meant that Argentina had to pay people to come back later to invest and produce their own gas. This is not simple. The US, Qatar and Canada are places that have been identified as having lower prices than Australia. That is because they are producing it. They are producing it by the well load. They have a glut of gas in the US, thanks to shale gas coming up with liquid fuels. That is what has driven down prices.

The idea that we are going to start interfering in the gas market further—I can guarantee what will happen. We will see additional Australian companies invest offshore. Gas will get increasingly expensive here. We would be much better off getting the Labor government out of the way. Stop funding the EDO. Stop encouraging activists to slow down investment and let the gas run, because that is in the best interest of Australians.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

It's my pleasure to rise this afternoon to speak on this energy motion raised by Senator Pocock about Australian gas. As a proud senator representing the greatest state, Western Australia, in the best nation on this earth, I know how critical gas is to Western Australia's domestic economy. Gas powers 60 per cent of WA's electricity, providing energy for many businesses and homes. While the Greens continue to criticise gas, I'd like to read a couple of figures into the Hansard for their benefit. Australia's oil and gas industry contributes approximately $105 billion a year to the national economy and supports 215,000 jobs around Australia, including many in regional and remote communities and many in my state and Senator Ghosh's state.

Last week, in fact, I had the pleasure of meeting some of these workers, here with a delegation of gas industry leaders and local community representatives, who met with parliamentarians to share their positive experiences working in and with Australia's natural gas industry. To those workers I met: thank you for your time; I wish you well in your careers.

Unlike those opposite, the Albanese government is committed to fixing the gas market mess left by none other than the former government, that mob. In the previous term, the Albanese government took strong action on gas supply and price, ensuring more gas was available for domestic use. Thanks to the Albanese Labor government, Australia has a stronger heads of agreement with LNG producers so gas is offered to the Australian market before it can be exported; a reformed Australian Domestic Gas Security Mechanism, which can reserve gas as a last resort if there's a shortfall; stronger powers for the market operator so it can issue directions to gas industry participants to resolve an imminent supply shortfall; and the gas code, which has secured more than 644 petajoules of gas for Australian homes and businesses. We have also legislated emissions targets, reformed the safeguard mechanism and invested in electrifying homes. We are building renewables at record rates. We also published the Future Gas Strategy, which maps out the role of gas in Australia and for our key trading partners as we decarbonise.

The Albanese Labor government has done a lot to make sure there is sufficient gas supply. To be very clear, no gas supply shortfall has eventuated. The Albanese government is focus on practical solutions that deliver affordable and reliable gas to households and businesses. Successive governments have put in place a range of policies and regulations to manage a crisis of supply or price or both.

Now for the best bit—way back in 2006, former Western Australian Labor premier Alan Carpenter, a very decent man, introduced a policy where between 10 and 20 per cent of domestic gas from the reserves around Western Australia would be made available to the Western Australian economy. How's that for leadership? It wasn't done by the Howard government; it was done by the Western Australian Carpenter government. When speaking about the WA domestic gas reservation policy in the Western Australia Legislative Assembly on 27 September 2006, Mr Carpenter said:

That policy is good for not only the Western Australian economy because it will establish our energy security for the next 30 to 40 to 50 years and in the absence of that policy, there will be no energy security, but also the national economy because what is good for the Western Australian economy is good for the national economy …

How true is that, Senator Ghosh?

Varun Ghosh (WA, Australian Labor Party) Share this | Link to this | Hansard source

I couldn't agree more, Senator Sterle.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Ain't that the truth! We Western Australians are very well aware of the contribution our economy makes to the success of the national economy. We are the engine room of this nation. Much like Alan Carpenter, whose visionary policy safeguarded Western Australia's energy security, the Australian government is committed to ensuring that our gas markets have a robust regulatory framework that safeguards Australia's energy security, delivers gas at a reasonable price and smooths the transition to net zero while continuing to meet our obligations to the trade partners.

A clear example of how we are doing this is the review into gas market regulations, which we opened in June of this year. The intent of this review is to carefully examine how our gas policies work for our economy as part of our energy transition. The review is examining the effectiveness and coherence of existing regulatory mechanisms and is identifying possible improvements with the aim of creating long-term stable regulatory environments. The review is considering the Australian Domestic Gas Security Mechanism, the Gas Market Code and the heads of agreement with east coast LNG exporters. That's not bad for four years in the job, is it?

Steph Hodgins-May (Victoria, Australian Greens) Share this | Link to this | Hansard source

I note that Senator Sterle neglected to mention the massive costs outlined in the National climate risk assessment as a consequence of burning coal, oil and gas. We have to face the facts. Australia's gas market is broken, and it was broken by former Labor resources minister Martin Ferguson, who went straight from parliament to gas lobbyists APPEA. Gas corporations have plundered our environment, caused 1,200 job losses in manufacturing and prioritised their greed for exports while everyday Australians pay the price.

Since large-scale LNG exports began on the east coast, domestic gas prices have tripled. Families, farmers, small businesses and manufacturers are bearing the cost while gas giants record billions of dollars in profits. The Australian Taxation Office has described some of these companies as systemic nonpayers of tax. The Australia Institute put it plainly:

It beggars belief that a company like Santos can sell nearly $50 billion of gas over a decade and not pay a cent of tax …

Australians are footing the bill for a public resource that they no longer control. Australian students pay four times more in HECS repayments than the gas industry pays in PRRT currently. Australian nurses pay more taxes than the gas industry. What a great shame that is.

And, as domestic supply tightens, we continue exporting vast quantities of gas overseas under the spin that Australian gas keeps the lights on in Tokyo. In reality, Japan onsell 30 per cent more gas than they consume. They make more money off gas than Australians do. Meanwhile, households back home face skyrocketing bills, regional manufacturers struggle to stay afloat and the east coast faces a real shortage of supply from 2028. Yet the Labor government remains addicted to coal and gas. Its policies protect fossil fuel interests, not the Australian public. Approvals for projects like the recent North West Shelf expansion and the barrelling ahead of Narrabri in New South Wales and Barossa off the Northern Territory make it clear whose side this government is on.

The paradox couldn't be sharper. Australia is rich in gas, exporting far more than we need, yet domestic prices soar and shortages loom. From what we heard about the gas market review, the government plans to incentivise new gas fields rather than use existing supply to secure domestic needs. That means rewarding the very corporations that created this mess. And, while this is happening, the Minister for Resources is courting industry, with even a taxpayer funded trip to Japan, rubbing shoulders with the very companies ripping off Australia, like Woodside and INPEX.

While Labor considers options to financially support these dirty, tax-evading corporations, we're focused on options and solutions that would support Australian families and businesses. Taxing gas companies is a simple, fair and principled reform option. It would restore balance to the market; compensate households and businesses, who have been paying the price; and ensure Australians share in the wealth of the resources we own, whilst redirecting gas back into the domestic market. It would direct value back to the public, not reward the lobby that has rigged the system for decades. Proposed options that essentially incentivise new gas fields aren't about energy security; they're about protecting corporate profits and prolonging our toxic dependence on gas. The lobby writes the playbook in this place; the government reads it out.

This is not some distant problem. From 2028, the east coast faces a growing gas shortfall because Santos are sucking the gas away from Australians to meet their export contracts. Existing supply must first serve domestic needs. It sounds pretty basic. New gas fields must not be incentivised. We are awash with gas; we just aren't allocating it to where it needs to be allocated.

We must rapidly wean ourselves off fossil fuels and accelerate investment in renewable energy and innovation for hard-to-abate industries. Energy must be affordable, secure and accountable, and properly managing our current resources is the first step towards a fast and fair transition. Prioritise domestic supply and invest in a fair, renewable future. Phase out fossil fuels. Protect households and industry. Secure our energy future without locking in decades more dependence on toxic gas. (Time expired)

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I welcome this motion because, finally, the Greens and Senator David Pocock, who has moved this, recognise that we need fossil fuels. We actually do. We need gas. At least, this motion is all about seeking to increase the supply and demand for gas in Australia.

I've sat through many lectures from that end of the chamber saying they wanted to shut down the gas industry and that we need to move away from fossil fuels, but now we have a motion saying, 'No, no, no, we actually want to increase supply of gas in this country.' So I recognise the belated arrival of the Greens and Senator Pocock to the land of common sense—that we actually do need energy and a supply of energy to maintain industry in this country, to keep our jobs, to keep down prices. So at least they're in—maybe I shouldn't have said 'the land of common sense'. They're in the universe of common sense now—on the outer orbits of that universe, perhaps, but at least somewhat in the vicinity of getting close to the right idea. But they are still a fair way, I think, from providing a real solution to the energy crisis in this country.

We just heard then another lecture saying that somehow it was these terrible evil companies that have caused this crisis. Well, if it weren't for those companies that invested in the LNG in my state and built the LNG trains in Gladstone, we would be in real strife right now because we wouldn't have this gas. May I remind the Senate—through you, Madame Acting Deputy President—that the Greens opposed all these projects. They opposed the building of the LNG facilities that now employ thousands of people in Central Queensland. They opposed the development of the gas fields of western Queensland that are now effectively meeting the gas needs of eastern Australia. They've opposed all of it. Now, having opposed their origin, they want to keep the proceeds for themselves. It's so hypocritical. If only we could just capture that hypocrisy and turn it into electricity, we'd never have a shortage again. We'd never have a blackout again. We would have a surplus of electricity if we could charge ourselves from the hypocrisy that comes from the Greens political movement.

Now they say that they blame these companies for causing it. They want it all to stay here. They blame this export industry now for causing this energy crisis. Nowhere have I heard how they tackle the inconvenient truth that, actually, the largest exporter now of liquefied natural gas in the world is the United States. The United States is the largest. They have overtaken us in the last couple of years. We were the largest exporter; the US is now the largest. The United States has the cheapest gas prices in the world, certainly in the developed world. It is supercharging their industry. This is not a Donald Trump thing, for those who might be angry with him. In 2024 the US produced more oil than any country in any year ever under President Joe Biden. They've had a massive renaissance in oil and gas development, alongside the development of a very strong—indeed the world's strongest—export industry of liquefied gas. So it's not LNG alone that's causing the problem, because, if it were, why isn't the same impact being felt in the United States?

The problem is not the geography of our exports of gas; it's the geology of the oil and gas under our feet. If the Greens and Senator Pocock, with all respect, had any knowledge of the gas industry, they'd actually come to this place with some facts and figures about how much it costs to develop oil and gas in this country and, therefore, what sort of price we'd able to achieve. A fundamental problem we have is that our coal-seam-gas fields in Western Queensland, as great as they have been in keeping us somewhat full of gas, unfortunately do not produce oil. They only produce methane. And the average costs of their production are higher than those in, particularly, the United States but also other in countries.

So whatever we do—and I'm not against some form of reservation policy; I was the minister when we first established the Australian Domestic Security Gas Mechanism that I know this government has built upon—the reality is that we will not force the price of gas below the cost of production. If we tried to, the production would stop. What we need to do is develop new gas fields, particularly in states like Senator Hodgins-May's. That state bans fracking, and now they're complaining and want to take all of Queensland's gas. Again, how much hypocrisy can you get? If you want gas in Victoria—which Senator Hodgins-May apparently wants—you need to develop the gas resources of Victoria. It's pretty simple. It's pretty simple economics. I do want to see lower gas prices in this country, but it won't happen until we get serious about developing our own resources.

Varun Ghosh (WA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to oppose the urgency motion of Senator Pocock. I want to do so by contrasting the simplistic and blunt nature of the motion with the measured, responsible and substantive approach that the government is adopting and to reflect on the importance of getting the nuance and detail of gas policy right. Gas already plays and will continue to play an important role in Australia's energy transition. That is made clear by the Future gas strategy, which examined the role of gas in Australia and among our chief trading partners. That strategy states that gas will be crucial to creating a smooth transition to renewable energy and to net zero. That includes placing downward pressure on prices and providing security to our grid as our reliance on coal winds down and our uptake of renewable energy sources increases. That's an uptake of renewable energy sources that has been driven and presided over by the Albanese government.

Unlike coal or nuclear, gas is a flexible form of power, and that's what makes it so essential in this transition. It can be turned on and turned off quickly and suits the needs of a modern energy grid like the one being built by this government. Gas doesn't just play an important role in our homes; it's crucial to supporting the industries that are important to our economy. The Australian Energy Market Operator says that 42 per cent of the energy used by Australian manufacturers is gas. AEMO has also highlighted the need for new investment in gas as we push towards net zero and rely on gas as a firming power source to a greater degree. It doesn't just assure that Australians are able to keep the lights on, which is vital, but gas exports also ensure that other nations around the world can also access the same reliable power source as they seek to transition as well.

Let me come to the terms of this motion itself. I think it goes to the difficulty of our problem now. We really do need to ensure that there is a balance between how gas is used for export and how gas is used at home. We need this to be available to Australian consumers, and I think I can agree with the final clause in this motion, which is that we need to bring down the price of gas and electricity for Australian industry and households. That is perhaps one point of agreement, but that's where our agreement ends with the motion. There are a number of reasons for that, but it's reflected in the terms of the motion itself. Australian gas benefits Australian households and businesses, but it benefits them in two ways. It benefits them through use, and it benefits them through exports, and investment in this industry that's necessary to ensure supply relies on both elements. Supply for the future relies on both elements.

This motion says the government should legislate to redirect uncontracted export gas into the domestic market, and that's a fairly blunt tool, but it's also a tool that's absent of any detail at this point in time. 'The government should legislate this.' The difficulty is: what volume is being directed? Is it all of it? Is it some of it? It's all of it, says Senator Pocock. All of it is redirected into the Australian market. The second difficulty is setting the price. Where's the price set at? Is it set by the market in Australia? Are we playing a global supplier price, or are we setting a price ceiling or floor? Are we doing that through limiting access to global markets overall?

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

Don't overcomplicate it.

Varun Ghosh (WA, Australian Labor Party) Share this | Link to this | Hansard source

No, the details are important, Senator Pocock. I appreciate that making the political point you're trying to make with this motion might not be complicated, but details in setting gas policy are complicated, and that's where grandstanding in this place differs from actually setting policy in the real world. We all agree we need to bring down the price of gas and electricity for Australian industry and households, but it's about how we do it. That's why the Albanese government is involved in reforming this part of Australia's energy market and Australia's energy industry. The government has created a stronger heads of agreement with LNG producers to help direct gas to the Australian market. We've also reformed the Australian domestic gas security mechanism, which allows gas to be reserved if there is a shortfall. It's dependent on whether there's a shortfall or not and responds to market conditions. It doesn't just set a blanket reservation in effect of all uncontracted-for-export gas. That might vary from time to time as well.

At the same time, market operators have been given stronger powers to help resolve supply shortfalls. There hasn't been a shortfall yet, but it is essential that we ensure that there isn't one, and that requires investment in the industry. It requires certainty for long-term investment in order for gas to be delivered at a lower price in the long term. So while this motion might be superficially appealing, the government opposes it because it does not reflect what's actually required to bring prices down, ensure stability in gas supply markets and ensure investment in those markets.

Claire Chandler (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The question is that the motion moved by Senator David Pocock be agreed to.