‘Bucket load’ of gas for domestic market under Coalition revamp to approvals

A leading energy expert says the Coalition’s new policy is akin to an east coast reservation scheme.

Senator Susan McDonald and Opposition Leader Peter Dutton.

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The Coalition will demand gas producers commit to prioritising supply to the domestic market in return for approving a “bucket load” of new projects, with a particular focus on ensuring there is more of the energy source produced in Victoria.

Opposition resources spokeswoman Susan McDonald said an assurance over domestic supply would be part of the approvals process under a Dutton government, but played down the prospect of a rewrite of Labor’s controversial gas code of conduct if the Coalition wins the election.

She said Western Australia’s stalled North West Shelf extension would go ahead under the Coalition, and declared she wanted to expedite approvals for gas drilling off the Victorian coast.

Amid industry speculation the Coalition was considering an east coast reservation scheme – which would force every development to carve off a standard minimum for the domestic market – Senator McDonald signalled her approach would be less prescriptive and decided on a case-by-case basis.

The east coast is forecast to have a shortage of gas from 2028, with the development pipeline unable to meet demand.

Senator McDonald said $10 a gigajoule for Australian gas customers would be a “great price to get back to”, a price not seen since the Russian invasion of Ukraine, with the consumer watchdog reporting that prices offered for 2025 averaged nearly $15 a gigajoule.

While not committing to reform the environmental approvals framework, Senator McDonald said the Coalition would halve approvals times, cut government funding to the Environmental Defenders Office and release more offshore sites for exploration.

“We’re going to bring on more gas by the bucket load,” she told The Australian.

“In order to partake in that new environment of faster approvals and encouragement to be bringing gas on, then part of your approval process is the prioritisation of the domestic market.

“Approvals will be based on the ability of companies to demonstrate their commitment to gas coming into the domestic market.

“There will be a certain proportion that they will have to commit to the domestic market.”

Grattan Institute director Tony Wood said the Coalition’s approach was a “form of reservation policy”, despite the Coalition not using the terminology.

The Coalition is yet to release its full gas strategy, but Peter Dutton is expected to outline a bigger role for the resource in the electricity market until nuclear can come online.

While domestic supply would be prioritised under the Coalition, Senator McDonald said gas would continue to flow to major trading partners as there would be more of the resource produced if there were a change of government.

She said the Coalition would not interfere with any existing foundation contracts, which are signed before the construction of a greenfields project and typically already have commitments for international customers.

“We have massive reserves in Australia; there is no shortage of gas,” she said.

“The short sight has been the Victorian government in not bringing more gas on when they need it.

“So now the whole country is paying a price for Victoria trying to take gas from everywhere else rather than develop their own.”

The Albanese government last year released its Future Gas Strategy, which backed an expansion of the sector to provide firming energy for a renewables-dominated electricity grid.

But the gas industry has accused the government of doing little to act on the strategy, claiming there was not a supportive framework to encourage investment.

Woodside chief executive Meg O’Neill this week expressed frustration over the approval delay on its proposed North West Shelf extension, while Beach Energy chief executive Brett Woods has been critical of uncertainty in gaining approvals to drill in offshore Victoria.

Australian Energy Producers chief executive Samantha McCulloch told The Australian this month that confidence in the sector had been dented after the government implemented a new code of ­conduct that set price caps for the domestic market of $12 a gigajoule.

The government’s code of conduct has been one of a raft of measures designed to prioritise supply to the domestic market, securing an extra 600 petajoules of gas for Australian users.

But a report by the Australian Competition & Consumer Commission, released in January, argued the price cap was not working.

“We have heard from a range of gas buyers that there has been little gas available at the $12/GJ reasonable price level under the gas code,” the report says.

The ACCC report projected a shortfall in supply from 2028, and accused state and federal governments of creating “barriers” for bringing on new projects.

“State and commonwealth governments can reduce regulatory barriers to investment for market participants to ensure that new supply can be delivered in a timely fashion and through a diverse range of participants,” it said.

Senator McDonald said a Coalition government would retain the gas code of conduct but argued it would essentially be redundant if there were a massive supply upsurge.