Domestic reserve gas pitch shut down by Queensland government

Queensland’s Crisafulli government has ruled out mandating domestic market reserves as part of its rollout of new gas fields across the state.

Queensland Premier David Crisafulli. Picture: Evan Morgan

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Queensland’s Crisafulli government has ruled out mandating domestic market reserves as part of its rollout of new gas fields across the state.

Coinciding with the release of nine gas tenements on Wednesday, Natural Resources and Mines Minister Dale Last said it was just “the tip of the iceberg” in the Liberal National government's plan to bring down energy prices and attract investment to the state. However, seven of the new sites will not have mandated domestic reserves, the split for export to be left to the discretion of the private market.

“We don’t want to be big brother when it comes to setting reserves,” Mr Last said. “There is no intention to mandate a reserve price. My message to industry has been, let’s get out there and develop our gas reserves. We’ve got huge gas reserves in this state, it’s a good news story, it’s pumping billions of dollars into the Queensland economy.

“It’s certainly our intention to open up more areas … (but) we should not be penalising here in Queensland because of the inaction and the lack of supply going into those southern states.”

Two of the nine new exploration sites designated for the Cooper/Eromanga and Bowen/Surat Basins in western and ­central Queensland will be designated for domestic gas supply under the former Labor government's Australian Market Supply Condition. The remaining seven will be controlled by the private sector.

Currently, about 70 per cent of Australian-produced gas is exported overseas to Asian markets.

Mr Last said the added supply would push power prices down for households. “The more gas that we can bring online, the more pressure that’s going to put on those prices, and that’s going to drive those prices down,” he said

The expansion plans were welcomed by industry figures at an energy producers conference in Brisbane on Wednesday, where Santos managing director Kevin Gallagher likened Victoria’s stance on natural gas investment to that of North Korea.

Royalties from gas generate $1.7bn on average per annum for the state government, and Mr Last said he expected this investment to stretch by millions. He suggested Victoria could learn from Queensland success.

“Victoria is in a very precarious position, as we know, and Queensland is the opposite story,” Mr Last said.

“We’re moving ahead with gas production in this state. We see plenty of potential, not only domestically, but also in the export markets, and moving forward, and we’ll continue to do so.”

Producer Shell’s country chair and senior vice-president of integrated gas for Australia, Cecile Wake, said it was a “false debate” that exports were pushing up Australian prices. “We’ve got into this false debate about whether exports come at the expense of domestic supply,” Ms Wake said.

“It’s a furphy because actually what we know is that it is a vibrant export market and the access to international markets that makes more gas under our feet economic to develop and more gas that can be available to the domestic market when the policy settings are right.”

Australian Energy Producers chief executive Samantha McCulloch said it was a misconception that Australians were paying more on gas than their overseas neighbours.

The fossil fuel announcement follows the state government’s decision to use extraordinary state planning powers axe a $1bn approved wind farm at Moonlight Range, 40km north of Rockhampton, earlier this week.

Anthony Albanese said gas played an important role in firming up capacity within the energy grid but stressed that renewables were pivotal.