Australia uses more gas to process exported gas than for domestic power generation or manufacturing

Australia does not have a natural gas shortage. In fact, the single largest gas-consuming industry in Australia is the gas industry itself. This is because they burn a lot of gas to fuel the process of liquification necessary to export gas as Liquefied Natural Gas (LNG).   

For natural gas to be stored in an ocean-going tanker and sold overseas, it must be condensed from gas to a liquid. This process is very energy intensive, so gas companies use some of the gas they have mined for export to fuel the conversion plants. 

According to data from the Department of Climate Change, Energy, the Environment and Water, in financial year 2023-24, 442 petajoules of natural gas was used in LNG plants, which convert huge quantities of gas for export. That was equivalent to about 9 million tonnes of LNG – not even exported, but just to enable export. 

This is much more than the 376 petajoules of natural gas Australia used in local manufacturing, or the 374 petajoules for generating electricity in Australia. It was more than three times the gas that Australian households burned as fuel in their homes (140 petajoules). 

In financial year 2023-24, export-oriented LNG plants took nearly 5,000 petajoules of Australia’s natural gas (including the 442 petajoules used for processing). That was nearly five times the total amount of gas that went into Australia’s domestic economy, which was just over 1,000 petajoules.  

Previous research from the Australia Institute highlights that diverting just a tiny fraction of the natural gas destined for overseas markets would provide more than enough gas to head off any risk of a ‘gas shortage’ in Australia. One way to realise this would be to implement the ACTU’s proposal for a 25% tax on LNG exports. This would divert more than enough gas to cover the domestic market, which would lower prices while generating $12.5 billion a year in additional government revenue.