Investors told a federal parliamentary hearing that the government’s proposed national gas reservation scheme risks leaving Australia short of supply.
The concerns were raised during oral and written submissions to a parliamentary inquiry, where financiers and energy-sector backers warned the measure could have unintended consequences for supply and investment.
A national gas reservation scheme is designed to prioritise domestic access to gas by requiring producers to set aside part of their output for local users. Proponents say this protects industry and households; critics argue it alters commercial incentives for producers and exporters.
Those who appeared before the hearing told parliamentarians the proposal could reduce returns on new projects and discourage investment in exploration and production, outcomes that investors say would shrink future supply capacity.
Industry groups and energy users are watching closely because any tightening of available volumes for market sale could affect manufacturers, gas-fired power stations and households that rely on gas for heating and industrial processes.
Gas-producing regions and export-oriented projects may face contractual and operational challenges if a mandated reservation affects volumes available for liquefied natural gas shipments or existing export commitments, investors warned.
The debate at the hearing highlighted the trade-off policymakers face between securing domestic supplies and maintaining the investment signals that underpin long-term production. Investors told lawmakers they want clear, predictable rules to avoid market disruption.
Market commentators say the design details will determine the extent of impacts: the size of any reservation, the mechanics for compliance and whether compensating measures are offered to producers could change outcomes for supply and prices.
Submissions received at the parliamentary hearing add to an ongoing policy discussion in Canberra about how to balance energy security with investment in new gas capacity. The representations by investors are likely to feature in further consultations on the scheme’s design and implementation.
