The Labor government is reconsidering the introduction of a gas reservation scheme for south-eastern Australia, as ministers review the sector’s domestic supply obligations and point to the success of similar schemes in other states.
Industry Minister Tim Ayres has not ruled out implementing legislation that would require gas companies to reserve a portion of their supply for the Australian market. He emphasized the government’s focus on ensuring existing mechanisms meet their objectives and criticized the Coalition’s previous approach to gas policy as poorly planned.
Concerns have intensified following a warning from the Australian Energy Market Operator (AEMO) that south-eastern states could face gas shortages by 2029. In response, Victoria recently approved a controversial gas import terminal in Geelong, and the federal government extended the North West Shelf project in Western Australia.
While Western Australia and Queensland already mandate gas reservations for domestic use, the eastern states lack such a framework. With the east coast operating on a separate energy grid and gas supplies dwindling, the idea of an East Coast Gas Reserve has gained momentum. Although the Coalition has historically opposed the concept, Peter Dutton campaigned on a proposal to reserve 100 petajoules of gas annually for domestic consumption—about 20% of total demand—arguing it could reduce household power bills by up to 7%.
The federal government is now seriously weighing similar policies. Resources Minister Madeleine King highlighted that gas exporters in Queensland and WA continue to thrive under reserve schemes and confirmed plans for a formal review of gas market frameworks to ensure greater domestic supply.
However, industry players resist applying new reserve rules to existing projects, stating those investments were made based on specific export-focused business models.
The gas sector has dominated recent headlines, especially after the federal approval to extend the North West Shelf’s operation until 2070. The move could pave the way for Woodside’s Browse Basin expansion and a 900-kilometre pipeline, but it has drawn sharp criticism from environmental groups concerned about Australia’s climate targets.
Meanwhile, the Victorian government granted environmental clearance for Viva Energy’s proposed gas import terminal in Corio. If completed, it could provide up to 160 petajoules annually—about 88% of the state’s current gas usage—helping offset the AEMO’s projected shortfalls.
Independent Senator David Pocock criticized the situation in an opinion piece, arguing that while gas production on the east coast has doubled over the past decade, most of it is exported, leaving domestic users paying significantly higher prices despite falling demand.
