Government scores ‘own goal’ with gas, as Japan’s fears confirmed

afr.com:

Japan’s fears about Australia’s “quiet quitting” of the LNG export business hold true while domestic gas users will also suffer, say energy consultants and lawyers, citing the mounting obstacles the Albanese government has put in the way of new gas projects.

As east coast gas producers awaited the release by Labor of the latest rules on gas pricing on the east coast, White & Case partner Christopher Flynn described the east coast market intervention as “a bit of an own goal” for the government.

Asian buyers of Australian LNG are increasingly worried over future supplies. Reuters

He said the policy, if implemented as flagged by the government in April, would inevitably suppress the development of further gas resources, and that longer-term meant higher prices and risks to energy security through the transition.

“What it ultimately means is it may affect energy security because by dampening the potential for much-needed investment upstream we create a greater exposure to shortfalls before we have reliable renewable alternatives at scale,” he said.

“So the benefit the government receives for ‘mum and dad’ may be outweighed by the costs, both for them and for the country and energy security.”

The comments came as the government published a “fact sheet” on the design of the Code of Conduct, which appears to confirm estimates by analysts that only a relatively small volume of gas will be covered by the $12-a-gigajoule cap on wholesale prices.

It specified that gas producers with an output of less than 100 petajoules a year and that only supply the domestic market will be automatically exempt. The eligibility for the exemption will be assessed on the previous year’s production, ensuring that producers that drop below that