Queensland fights federal push for emergency powers over gas supply

Queensland faces an unprecedented challenge to its energy dominance as southern states push for federal powers that could force the state to subsidise their gas shortfalls.

Premier David Crisafulli (left) with Treasurer and Energy Minister David Janetzki

Queensland faces a fight to maintain control over gas production as New South Wales and Victoria push the federal energy operator to be given emergency powers to intervene.

Treasurer and Energy Minister David Janetzki revealed there were moves afoot within the Commonwealth to give the Australian Energy Market Operator extra powers to intervene in the East Coast gas market.

Mr Janetzki said it would include emergency powers to direct investment to prevent identified supply shortfalls.

The proposal is designed to boost the southern states’ access to gas and could include subsidising uneconomic infrastructure projects including LNG import terminals, which Mr Janetzki said would “distort the market and undermine the investment case for domestic gas development”.

“I will not accept other jurisdictions trying to rush through heavy, candid market interventions that unfairly impact Queensland,” he said.

Queensland will continue to do the heavy lifting on gas supply amid this growing southern shortfall driven entirely by southern states owned policy decisions, we won’t accept inequity.

“The Crisafulli government is focused on creating an environment that supports the private sector to invest in expanding production,” he said.

“This is in stark contrast to New South Wales, which produces no natural gas and where we’ve seen efforts to develop the Narrabri gas field appeared to stall.

“Victoria’s many years of ideological warfare on gas, whether it be household use or commercial production, has come to ahead as a sheer weight of reality has forced them into reconsidering damaging rhetoric that demonised the industry and stalled development.

“This has been misinterpreted as limiting their ability to raise gas royalties and yet they are rewarded with a greater share of GST.”

Queensland will be responsible for nearly 90 per cent of all East Coast gas production by 2027.

In 2024 Queensland gas was Queensland’s second-biggest export market behind coal, contributing some $1.7bn in royalties.

Separately, AEMO’s draft 2026 system plan warned Queensland coal-fired power stations could become increasingly unreliable as they approached end of life.

Queensland’s fleet of coal plants have operated for an average 30 years, compared to the average age of 40 years for the nation’s remaining fleet – with owners declaring planned retirements were on average a decade away.

“Coal plants may become increasingly unreliable as they approach end of life,” the report found.

“Based on recent history and their future age, full unplanned coal plant outages are projected to occur around 7 per cent of the time between 2027 and 2035, and partial loss of capacity a further 17 per cent of the time.

“In other words, coal plants are likely to be fully available only three quarters of the time over that period.”

The AEMO report warned coal retirements may occur faster than these forecasts.