Press conference at Parliament House

Website search Interviewer Press conference discusses Domestic Gas Reservation Scheme. MINISTER FOR CLIMATE CHANGE AND ENERGY, CHRIS BOWEN: Good morning. Thanks for coming.

Australia is the only gas exporting country in the world without some form of a gas reservation policy. Australians have been asking the question for many years, how can Australia have so much gas? And yet our experts forecast gas shortages for industry.

And Australians are right about that. For too long, Australia has been in the perverse situation that despite being one of the world's largest gas producers, we faced years of projected gas shortages and price shocks at home. When we came to office, the price of gas was over $30 a gigajoule.

But gas prices and scarcity of gas isn't good for renewables. It's not good for our nation. Now, let's be frank.

This problem has been around for many decades under governments of all persuasions. It hasn't been good enough. But it's the Albanese Government that will fix it.

Today, we're taking the next step in a landmark economic reform, one that secures Australian gas under Australian waters, under Australian soil for Australian industry and Australian households. This is a policy long overdue, but one that we will get on and implement. Now we've engaged in months of detailed conversations and consultations.

We first announced this policy last December, and we made clear that this was, in many senses, a deeply complicated policy to make sure we get right. And so, we wanted to engage with Australian heavy industry, with steel makers, fertiliser, plastics manufacturers and others. We wanted to engage with the gas industry itself, we wanted to engage with trade unions, we wanted to engage with our trading partners, with our key friends and allies in the region.

And we've done that. And so, I want to thank those people we've engaged very constructively in good faith with the Government, who've accepted the government's policy intention and have talked to us about the ways we can achieve those objectives. There have been many suggestions made to us that were thought about, some of which today we're accepting, others of which we've thought about and will decline to accept.

So, the Gas Reservation Bill 2026 will establish Australia's first national Domestic Gas Reservation Scheme. It delivers on our Government's commitment to secure gas supply for Australians, putting downward pressure on prices and requiring gas exporters to supply a portion of the gas they produce for the domestic market. The policy goals are simple.

If you want to export Australian gas, you must reserve up to 20 per cent of those exports to ensure a modest oversupply for Australia to put downward pressure on prices. As I said, this policy design is complex in some parts. That's inevitable when you're designing a regime when we already have existing contracts and existing industries.

So, we did have to engage in careful considered consultation. As I said, there are some things that have been suggested to us we decline to do. Some people said for example, we should water down the requirement from must supply to must offer.

We thought about that. We're not doing it. There is an obligation to supply gas to Australian industry.

But there are other things where we've had suggestions about how we can effectively achieve that modest oversupply that we said all along was our objective and we've incorporated that in the design. So, this sets us up for the future. We know that Australian gas use is going to continue to be important.

It's coming down, our gas use in the energy system is the lowest it's been in 26 years because of Australia being a world leading installer of batteries. Batteries are replacing gas at night in our energy system more and more. That's a good thing, but it doesn't mean we don't need gas.

We need gas in energy; we need gas in industry. And there are five million Australian homes who use gas to heat their home. So, this is a good policy for our industrial base, it's a good policy for Australian workers, it's a sensible policy.

It's good policy for certainty and it's good policy for our environmental credentials as well. Our requirement, in many ways, despite the complexity, is modest. Keep up to 20 per cent of your gas for Australians.

Australian gas should be for Australian use. So, this draft legislation, which Madeleine will talk about in more detail, will be out for a brief period of consultation because we need to get on with it. There'll be an opportunity for people to provide us feedback over the next couple of weeks, then we'll seek to pass it through the Parliament.

I want to thank Madeleine and Tim for their leadership, for their hard work, for their consultations with the sectors that they're responsible for. This collaborative collegiate effort in the Albanese Government will see Australian gas for Australian users long overdue but delivered now. Mads.

MINISTER FOR RESOURCES AND MINISTER FOR NORTHER AUSTRALIA, MADELEINE KING: Thanks, Chris. Thanks, everybody. So, as Minister Bowen has said today, we're releasing an exposure draft of legislative package for consultation with gas producers, gas users and the wider community.

And this is the result of over six months of formal and informal consultation on a reservation scheme that will deliver Australian gas for Australian users. It is important to recall how we got to this point. When Labor was first elected to government in 2022, the first thing we had to deal with was an energy crisis.

A combination of a decade of chaotic policy making from the Coalition, weather events, a coal power station maintenance backlog from COVID and the consequences for global gas supply because of Russia's illegal invasion of Ukraine, saw energy prices spike quite severely in that winter. In some cases, at that time, we saw gas offered into the Australian market for well over $60 a gigajoule.

That was clearly unacceptable. The regulatory framework we inherited from the Coalition to manage our gas market was weak, ineffective and it was also expiring. It was a series of band-aid solutions created in response to multiple crises.

You'll recall we had to amend the Australian Domestic Gas Security Mechanism to extend it beyond 2022 so that it could actually work and be activated more than once a year. We had to renew the heads of agreement with the Curtis Island LNG exporters in Queensland to bring them back to the negotiating table to provide more gas. And very significantly, we recall Parliament in December 22 to pass urgent legislation to take the heat out of gas markets during that crisis and its aftermath, including through the Code of Conduct and a temporary price cap.

In 2024 we released our Future Gas Strategy, which set out the role of gas in Australia's economy in the context of our net zero future, which this Government has legislated and is deeply committed to. It outlined the key role gas will play, particularly in supporting the rollout of renewables for peaking and for firming in Australia, also importantly for our trading partners who rely on Australia for their energy security.

And the Future Gas Strategy was the first time such a comprehensive analysis was undertaken. That work was absolutely necessary, but there was more to do. This Government has always envisaged future work to seek to create a stable and enduring gas market that was not just a series of ad hoc responses and a market that ensured ample gas for domestic gas users – Aussie gas for Australian households and Australian industry, and at affordable prices.

That is why we went on to commission our Gas Market Review last year, a report released in December which recommended establishing a national gas reservation scheme. In May this year we invited consultation on a draft design framework for the scheme. We received over 140 submissions and have held countless meetings, and I want to thank gas users, gas producers, the wider community for all engaging in that consultation process really very constructively.

The consultation was genuine and has helped us further develop the reservation scheme. So, now turning to the details of that consultation, what is the same as the framework we published. The 20 per cent domestic supply obligation remains in place.

All LNG exporters will be required to supply the equivalent of 20 per cent of their export volumes into the domestic market. As Chris has said, the must sell principle remains. Experience has shown that only offering gas has not worked.

Existing contracts will be respected. Australia takes very seriously its obligations to provide energy security to our region, including, of course, from those who we import refined fuels from. Existing contracts will be respected.

The supply obligation will be shaped through a transition period to account for those really important contractual obligations. What also remains the same is this is very much a national gas reservation scheme. All LNG producers will need an export licence to export gas.

Meeting their domestic supply obligation is a condition of being granted an export licence. Modest oversupply remains and that will put downward pressure on domestic gas prices and ensure abundant domestic supply. Turning to what is different from the consultation paper we put out, I want to be clear.

This has been a genuine consultation process. We have listened throughout it, and practical adjustments have been made. For the start date, the scheme itself will commence on the first of July 27th.

However, the domestic supply obligations won't come into force until the first of July 2028 *(See footer) . And that's a practical change to align the DSO with cargo planning by the calendar year, Ministerial discretion has been narrowed to recognise three factors: pre-existing contracts, infrastructure constraints and determining the application of a domestic supply obligation to different gas markets.

We've also introduced a demand calibration, but I would note the draft design always contemplated a release valve mechanism. The 20 per cent DSO will be shaped annually to 110 per cent of forecast demand to ensure a modest oversupply that will be regulated by the Australian Energy Regulator using the Gas Statement of Opportunities which will use an established methodology.

So, all gas producers and all users will be able to forecast their likely obligations for future years, bringing certainty to this proposition. What has changed is there will be western and eastern markets. The draft bill recognises that there are actually two physically separate gas markets in Australia, the eastern market and the western market.

They are not connected by a pipeline. Domestic supply obligations will align with physical domestic markets. DSO obligations must be met in the same market as the export facility.

An eastern exporter cannot meet their obligations by selling gas into the western market. And leaving the most important thing to last as a Western Australian around the WA DSO. In a market that is well supplied, the domestic supply obligation can be reduced.

For example, if the western market were found to be well supplied, it would be possible for discretion to be applied to reduce the that obligation to zero. So, of course, I will hand over to Minister Ayres in a moment, just to clarify around the draft legislation that will be open for consultation for two weeks. It will be a tight turnaround.

We need to finalise this bill for introduction into Parliament. But I want to be really clear, this consultation has been going on for some time, for many months. It's been very productive.

I want to thank Minister Bowen and Minister Ayres and of course, everyone in their teams for the work they have done on this. And I urge all those with an interest in how this reservation works to examine the scheme, engage in the process and make your submissions at your earliest opportunity. And with that, I'll hand over to Tim.

MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE, TIM AYRES: Thanks, Madeleine. Thank you. We need a three lectern press room.

I do want to make a few comments about this. This is a landmark Albanese Labor Government reform that will fundamentally change our gas market so that we are securing Australian gas for Australian industry and Australian households. As Chris indicated, we are the only gas producing economy in the world of any scale that does not have an obligation on our domestic producers to secure gas for its own industry and its own households.

And this piece of reform that the Albanese Government will bring to the Parliament will deliver on that objective. Before I was elected to the Parliament, I spent my working career in Australian manufacturing, and I saw firm after firm, capability after capability, closing down because successive governments had not come to grips with that key reform. And the difference between what has been achieved in Western Australia for Western Australians with Western Australian gas and the outcome on the east coast – it’s very clear and it's been counted in lost jobs and lost capability.

This reform brings about a national scheme that delivers Australian gas working for Australians. Real change being delivered, that will be an enduring structural reform. That will deliver not just more secure jobs in our industrial regions and our outer suburbs but will lay the framework for future investment decisions that will deliver for blue collar jobs and will deliver for the Australian industrial capability that a Future Made in Australia requires.

We are a global energy and resources superpower. A gas reservation ensures that Australia is playing to our strengths. Cheaper energy means more manufacturing means more secure jobs in our regions and our suburbs.

It's an investment in Australia's energy security and in our resilience for decades to come. We'll make Australia stronger. As an Industry Minister, of course I want Australian gas users, and of course I'm particularly focused on those heavy industrial firms to have a fair crack in the gas market.

This reform delivers that. I want to back new investment that relies upon a certain framework, certain market settings, for big investments in Australia's industrial capability. And this delivers that.

The reservation delivers clear rules that for the first time in decades facilitate long-term contracting. They balance the need for ongoing investment in gas production in Australia with the opportunity to re-industrialise and diversify our economy. Gas exports are really important to Australia.

This set of reforms will ensure that Australia maintains its status as a reliable partner on energy exports. It's an opportunity to maximise economic opportunity to rebuild our industrial economy to make Australia stronger. It's a set of reforms that put Australian gas users first.

This is an important step forward. Next stop, the Parliament and making sure that we legislate and lock in long-term reforms and certainty for investment, both in terms of gas production, but also for the heavy industrial gas users that are going to be the foundation of our future economy. Thanks.

Okay, folks, over to you, just here first. JOURNALIST: Has the Government undertaken modelling of how the reservation will explicitly affect energy prices? And just to Minister King, can you give an indication of how many gas providers are impeding that 20 per cent requirement or just how far off they currently are from that 20 per cent figure?

I'll go first, then, Madeleine. To be clear, we are not setting a price target, a floor, a ceiling. This is about supply, not price.

However, obviously engineering a modest oversupply, modest, is very much designed to put downward pressure on prices. Now, there's lots of factors that go into the gas price, the cost of extraction. Bass Strait is running out of gas rapidly.

That's very cheap gas to extract. Other places have more expensive gas to extract. International circumstances, there's lots of factors that go into setting the gas price.

But our analysis and the analysis of the industry shows us that this policy is what gives us the best chance of having gas at competitive prices. Industry has said very clearly where they need gas prices to be to be competitive, and this policy gives the country the best opportunity to meet those prices. Madeline.

Thanks, Chris. So, some, but not all, of the Queensland exporters would meet that 20 per cent already. In Western Australia, the exporters have a different obligation right now and have had since, I think 2008, and it's a lower amount, and that accounts for just lower demand in WA because of population size and so forth.

And there would be a Darwin facility, which is a bit different as well. JOURNALIST: Minister, the Queensland Government had warned that this would have structural implications for the State's royalty revenue. What are you doing to address those?

Can you guarantee that Queenslanders won't be any worse off? That's a matter for the Queensland Government. I mean, we're setting this policy for Australia, and I think Queenslanders want to see Australian gas for Australian users.

This is a Commonwealth policy. Obviously, you know, there have been consultations with the States across the board, this is Commonwealth policy. The Queensland Government, you know, is responsible for their budget.

JOURNALIST: Minister Bowen, looking at the example of Western Australia, a big issue in that state is around transparency. A lot of the deals are done at a state level or in agreements or project approval conditions that are not made public. And there's some confusion.

The state generally hasn't met that 15 per cent contribution every year. So, my question is, on this policy, what assurances are there around transparency so that Australians can know year on year, what gas is being supplied? But I did also want to ask Minister King, given that WA does have a forecast shortfall by the end of the decade, how likely is it that they will be exempt from this national scheme?

Yes. Should I go through that. So, the West Australian scheme is different and it's well established and at this time – and I'll get to the shortfall position in a moment.

It is ensuring that Western Australia is well provided for in terms of gas for households, but also really importantly for manufacturing and refining and so forth. So, the WA State Government, obviously, we've talked with them quite a lot on this. They're really satisfied with their scheme.

They've had their own reviews on how they might improve it. The Tinley Report is one I'm thinking of from, I think, a couple of years ago in the WA Parliament. As to their shortfalls, they are aware of their gas statement of opportunities and what they have to do to make sure there is more gas, to meet that.

Different providers there provide different amounts of gas and that's all agreed with the State Government. And to be honest, if the State Government is satisfied with that because it's their obligation, they've taken that obligation earlier than anyone else to make sure that their citizens and their industry is supplied with gas. If they are working through that well, then they should be able to continue to do that.

We make no decisions now. We've got to go to a consultation period on this exposure draft and then there will be a series of assessments around that western and eastern market. So, I don't want to presuppose anything.

JOURNALIST: Transparency as well. How will the public know if these companies are meeting their obligations? We will go through a process of developing the regulations.

The AER will be very much involved in producing long-term rolling forecast on the demand of gas. The gas industry itself will participate in that, providing information as they have done for the past number of years. But I would also add into this we are stripping back a lot of the red tape that they've had to go through.

Through multiple different parts of the existing ad hoc gas market schemes. So, the ADGSM, the Australian Domestic Gas Security Mechanism, will fall away. It becomes superfluous when you've got a gas reservation, as will the heads of agreement and also the ACCC gas inquiry report.

So, we expect the gas industry to engage quite well with the AER. They always have to be honest, and that's a very trusted institution. JOURNALIST: JOURNALIST: You said it's about supply, not price, but clearly – JOURNALIST: – it’s going to affect the price.

Can you give me an idea? Perhaps Madeline King can answer this. What is the price difference that consumers would experience between, say, the east coast and the west coast?

And secondly, Tim Ayres, you talked about how there was lost jobs and lost capability because of the way that WA's used its gas resources. I'm thinking here about Victoria. They've had effective moratorium on digging out gas and they've impoverished themselves because of it.

Are you encouraging Victoria in particular to start pulling out those resources, given it once was possibly Australia’s most resource rich state? On the WA price differential because of the combination of the WA reservation scheme, but also long-term infrastructure like the Dampier to Bunbury pipeline has been in place since the 80s, I think. So, that makes transport costs more affordable.

And the ownership of the WA State Government in public utilities. Their gas price remains very constant around $6 a gigajoule. In the eastern states, because of the reforms we've made since the crisis in 2022.

Through the price cap, and also, I think, very constructive conversations with gas providers, the prices here have remained pretty constant between eight to ten dollars a gigajoule. It is more expensive because a lot of it does come from Queensland, so the transport costs are simply going to be higher. And it's onshore gas, too, which has a higher cost of production.

JOURNALIST: Forty per cent cheaper potentially through this policy? Well, they're going to be different. It's still a different market.

I mentioned the very, very important critical infrastructure built many decades ago in the Dampier to Bunbury pipeline. That's a large capacity pipeline that is not matched on the east coast, though there is that series of pipelines. What we've seen through the announcement when we first made it in December, greater interest from private capital in investing in gas pipeline infrastructure to enable this scheme to work, so that investment.

Improving the compression of the transport of gas molecules on the east coast, as well as all the things we've gone through, we expect to all contribute to putting downward pressure, and the supply, downward pressure on prices. Let me respond to Andrew. Well, firstly, Andrew, the Western Australian scheme has led not just to industrial capability being maintained in Western Australia but big and important investments for Australia.

The Perdaman fertiliser facility. We have no urea production in Australia today because high gas prices have driven on the east coast have driven production offshore. Now the Western Australian scheme has delivered certainty and 20-year long contracts that will mean that we will have urea production in Australia towards the end of next year.

The announcement, just before Christmas of the Albanese Government's intention to deliver a gas reservation scheme for all of Australia has already led to changes in investment behaviour. The producer of phosphate fertiliser in northwest Queensland, Phosphate Hill, had no buyers. It's a key part of our industrial architecture and for our agriculture sector, absolutely critical.

And you can't make either of those kinds of fertiliser without gas. : I was asking about the Victoria though. : Yeah, I'll come to that, I'll come to that. I just want to underline the point that big and important industrial investments rely upon this kind of policy framework and that is why we are delivering it. Overnight after the announcement of the Albanese Government's landmark gas reservation scheme, multiple buyers engaged in that process and that has ultimately delivered new investment in that site.

That's important for Australia. I think one of the features of the way that Australians see the gas industry and the gas market – that the lack of a clear reservation strategy over the course of the last 20 years has created is not a clear relationship between gas production and investment in Australian industry and Australian jobs. And this scheme delivers that, 20 per cent or the equivalent of 20 per cent of our export production allocated for Australian jobs and Australian industry.

And that should send a clear message. And as Madeline said, in investment terms it already is. : On Victoria though? : Yeah, on Victoria we want to see Australian gas being exploited for Australian industry. [INAUDIBLE] : Andrew, you had a question, he didn't answer it come back to you. There's people who haven't even had a question yet.

No need to yell at each other. This is not a One Nation press conference. Everyone's entitled to ask one.

Ryan? JOURNALIST: Thank you, just on the domestic supply obligation and that 110 per cent figure. How is – can you just explain a bit more?

How is that calculated? Who calculates it? : And will the Minister have any kind of particular role? Will they be at arm's length from the Minister or will they have a role in endorsing that?

So, we'll empower the Australian Energy Regulator to do that job. So, they will assess on a rolling five-year basis the demand annually, but you know, with a five-year rolling basis the demand forecast. Obviously then they'll set what modest supply is – 10 per cent over that – and then they will determine the obligations of each gas company within that. : And the Minister's role in that? : The AER will determine that.

Obviously, we have some Ministerial discretion, but the AER will determine that. Yes? : Now that you're close to finalising the money for the gas reservation scheme, will you rule out any extra taxes on the gas sector? : What we're doing today is a major policy step forward. It is a serious economic reform, frankly, much more impactful than some of the ideas I see floating around.

So, that is the answer to your question, is we are not doing that. What we're doing is this. Yes? : What were the key concerns raised by Malaysia, Singapore, Korea in recent weeks and how does the exposure draft address those concerns? : Well, all our trading partners have engaged very positively and constructively with us, as you imagine, and us with them.

They're deeply important relationships. It's no secret. What they were looking for was reassurance that existing contracts would be honoured, which has been our position all the way through.

And also, I think the demand calibration measure that we put in place, the modest oversupply, provides reassurance that we're not over, we're not seeking massive oversupply, which then would require contracts to be threatened. The modest supply – oversupply is able to be done without threatening existing contracts. : Is that why you went changed it to up to 20 per cent rather than a set 20 per cent [INAUDIBLE]? : Well, the reason for that calibration is we wanted, we've said all along we wanted a modest oversupply.

Some people said to us in feedback, make sure you don't oversupply the market so much that it's counterproductive. And we thought that was reasonable feedback. Reasonable feedback.

So, the calibration model to ensure that modest oversupply is what we've landed on. : Going from a strict 20 per cent contribution to up to 20 per cent is a significant change. Is this a back down? : No, we don't see it that way at all. We see it as sensible calibration, taking on board feedback from players.

The 20 per cent figure is still, you know, the absolute core of the policy. But there's no point reserving gas that Australians don't need, you know, so that's why the AER will have the role of determining the needs up to 20 per cent. : A question about Victoria if I may? Yes, Andrew? : Madeline King, do you think that Victoria should be digging out its gas?

And secondly, if there is more gas that's produced, how does that affect your climate ambitions? In relation to Victorian gas and Victorian manufacturing, the price of gas in Victoria for many decades was very low because the gas produced was a by-product of oil production in the Bass Strait. Gas and oil are fossil fuels, so they do run out and the Bass Strait is in decline.

That's to be expected and everyone is very well aware of that. But that is what has, well, what drove Victoria's manufacturing for decades. That is coming to its natural end.

I would note more recently, there are extra acreages of both Victoria and South Australia in the Otway Basin, which are really important and they've been investigated by gas producers. What the Victorian Government has chosen to do some time ago is really a matter for them. And what we are making sure is with this policy and a determined policy to make sure that Australian gas is available for Australian users.

Gas is widely used in Victorian homes and in times here in the ACT as well. It's an important source of heating and so forth. Focus is on delivering Australian gas for Australian users and that includes Australian households. : Andrew, our position has been consistent all the way through.

Gas is required to support our transition. You know, there are parties to our left who argue no gas, parties to our right who argue gas is the answer to all our problems. Neither of those positions are fair or accurate or helpful.

We need gas for a couple of reasons to support the transition. You know, we are rapidly deploying renewables, but gas is, because it's so flexible, can be turned on and off. It's an essential backup for picking and firming for renewables.

Secondly, there's heavy industry relying on it. You know, I know some people have declared green hydrogen to be dead. It's not dead, but it's not here yet.

And so, there are heavy industry with high heat that require gas. And then there's those five million homes that require gas for home heating. So, having gas that's extremely unaffordable and not available to Australians doesn't help with the transition.

This policy mechanism helps with the transition. We'll take one or two more. It's been half an hour.

Yes? : Mr. Bowen, you said the regulator will determine the needs up to 20 per cent. If the need grows and there's a demand there, would you consider taking [INAUDIBLE]. : There's no evidence that that would be necessary Claire. : Just for Minister Ayres there are some concerns among industry in WA that the gas supply is not there, particularly beyond 2030.

So, what assurances can you give those suppliers there won’t be Ministerial discretion that essentially protects that state from not being able to get the gad? Well, it's a national scheme. It's a national scheme.

We've attended to the kind of policy detail that's required to account for a number of things, one of which is that there are two distinct, completely physically separated markets. The other is that this is a set of reforms that should have been delivered in the early 2000s. That's what should have happen.

And fixing that, delivering a real outcome here, requires a level of complexity and attention to detail. And that's what this piece of legislation does, and that's what this reform will deliver. Last one.

This gentleman hasn't had a question. JOURNALIST: [INAUDIBLE] the Opposition these reforms, do you expect their support? Well, I'll say this.

We'll provide briefings to all parties. The Opposition, the Greens, the crossbench. We would welcome support across the Parliament, including from the Opposition.

We're happy to have good faith conversations with anyone who's interested in having good faith conversations with us. Ultimately, parties have to decide – do they want Australian gas for Australians or not? We'll be putting it to the Parliament.

If they want to sit together and vote against Australian gas for Australians, they can do that or they can work in good faith with the Government. Up to them. We'll wrap it there.

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