Australia to Introduce Laws Requiring Gas Exporters to Reserve Supply for Domestic Market

The Australian government has announced plans for new laws that will mandate gas exporters to set aside a portion of their supply for the domestic market. Minister for Climate Change and Energy Chris Bowen stated at a press conference in Canberra that these laws, to be presented to the federal parliament in 2026, aim to secure Australia’s liquefied natural gas (LNG) supply and reduce prices. The legislation, developed in collaboration with the gas industry, international parties, and communities, will compel exporters to reserve between 15 and 25 percent of LNG extracted in Australia for domestic use. Bowen emphasized the importance of prioritizing Australians’ access to the country’s resources. Australia, a major LNG exporter, faces a projected supply shortfall in its south and southeastern regions by 2026, according to a report by the Australian Competition and Consumer Commission. Bowen has engaged with counterparts in Asian nations, such as South Korea, Japan, and Singapore, key buyers of Australian gas, to discuss the policy. The Australia Institute previously highlighted that excessive gas exports have driven up prices for Australian consumers, supporting the government’s recent commitment to prioritize domestic supply. The institute suggested capping exports as a solution to ensure ample gas supply and lower prices for Australians. It pointed out that multinational gas export corporations, predominantly foreign-owned, currently export 80 percent of Australia’s gas and possess significant control over the country’s gas reserves. These corporations reportedly receive a large portion of gas exports royalty-free and have never paid Petroleum Resource Rent Tax.