The federal government is poised to announce its blueprint for a new east coast gas reserve as early as next week, following a six-month review of the market. The move represents a significant intervention aimed at securing domestic supply and containing soaring energy costs for households and businesses.
Unions and Manufacturers Demand Immediate Action
As the government finalises the scheme's design, it faces intense pressure from blue-collar unions and major manufacturers to adopt a robust model that applies to existing gas projects. The Australian Workers' Union (AWU) and industry group Manufacturing Australia argue that a policy limited to future projects would fail to deliver quick relief.
Paul Farrow, the AWU's national secretary, stated that affordable gas is needed "right now – not years down the track." He warned that a scheme only for new projects would "achieve virtually nothing for anyone" in the current crisis.
Ben Eade, CEO of Manufacturing Australia, echoed this, stating an effective scheme must see the immediate reservation of uncontracted gas to force prices down and protect local jobs. His organisation represents large energy users like BlueScope Steel and Rheem.
Two Models Under Government Consideration
According to sources familiar with the policy development, the government has privately canvassed two potential models with stakeholders over the past six weeks.
The first option would directly target the three major Queensland-based LNG exporters, requiring them to supply a set amount of gas to the domestic market in exchange for export permits. The AWU supports this model, arguing these exporters "broke the domestic market in the first place" by linking it to volatile international prices.
The second model would mandate all gas producers, including those who only supply the domestic market, to reserve a certain volume for local use.
International Concerns and Political Divisions
The government's deliberations are complicated by diplomatic sensitivities. Key export customers like Japan and South Korea, which rely heavily on Australian gas, have historically resisted interventions they fear could threaten their supplies.
Meanwhile, political divisions are clear. The federal Coalition and the gas industry insist any reservation should apply solely to new projects. In contrast, Labor MP Ed Husic has called for even stronger measures, including cracking down on exporters who on-sell Australian gas to third countries.
The Greens advocate a different approach, backing a union push for a 25% levy on LNG exports as a more effective tool than reservation alone.
A government spokesperson declined to confirm specific details but reiterated its commitment to "ensuring Australian homes and businesses get access to Australian gas at fair prices." The final design, expected imminently, will determine the scheme's immediate impact on an east coast market where prices have tripled in the past decade.
