Great news. Big Gas exporters now say gas market will be over-supplied - so we don’t need any new gas approvals

Faced with the prospect of being forced to supply gas to Australians instead of exporting it under the Government’s proposed gas reservation policy, the Big Gas exporters who have spent the last decade whipping up fear of a gas shortage now say supplying more gas will mean the Australian gas market is oversupplied.

Given the damage gas projects cause to farmland, falling aquifer levels, and our marine environment, the industry’s admission that we don’t need more gas is great news.

Gas exporters have long used claims of a “gas shortage” to throttle supply to the Australian market despite exporting two-thirds of east coast gas, because it allows them to price-gouge Australian customers. They also use it to pressure governments into approving new gas projects even though the additional gas simply leads to greater exports.

The Government’s draft gas reservation scheme proposes requiring gas exporters to supply the equivalent of 20 percent of their export production to the Australians market, triggering the remarkable 180-degree turnaround by the gas industry from warning of shortages to warn of a potential gas glut.

Of course, the whole “gas shortage” debate is a pantomime. Australia doesn’t have a gas supply problem; we have a gas export problem.

Gas demand in Australia has been falling in all sectors for years because there are far more affordable alternatives to virtually all gas uses. Renewables can produce electricity at a fraction of the cost of gas, households can save hundreds of dollars annually by switching from gas to electricity for their heating, hot water and cooking. There are also big cost-saving opportunities in electrification for many commercial and industrial uses.

Gas demand for electricity, for instance, has dropped off a cliff, falling by around half since 2020, and is expected to fall by another third in the next two years.

It is difficult to know whether the government’s half-baked gas reservation scheme will work. There are mountains of uncertainty, and the gas industry consistently finds loopholes in complex gas policies like this. The only certainty is that it won’t raise any revenue for Australians.

Fortunately, there is a better, simpler solution that would solve the export driven “gas crisis” tomorrow, achieve a fairer return for Australians, and be impossible for the gas exporters to game.

A 25% gas export tax would provide a big incentive for gas producers to prioritise Australians over exports, ensuring sufficient gas for Australians and cutting prices.

It would also raise around $17 billion for Australians annually, enough to increase government spending on housing fivefold, double the childcare rebate, more than double federal spending on public schools or get rid of HECs.

The proposal is supported by the ACTU, the Greens, Independents, ACOSS and WELD Australia. Best of all, it is very popular with Australians, with strong support from voters across the political spectrum.