Key facts
- Australian industry will rely on gas for the foreseeable future, according to Resources Minister Madeleine King.
- The national gas reservation scheme will force gas companies to set aside 20% of exports for domestic use.
- The scheme is expected to come into effect from January 2028.
- The Australian Energy Regulator will be empowered to ensure companies meet 110% of projected demand annually.
- King stated there is currently no viable replacement for gas in many industries.
Resources Minister Madeleine King stated on Wednesday that Australian industry will remain reliant on natural gas for the "foreseeable future." Speaking at the National Press Club, King asserted that the upcoming national gas reservation scheme is designed to push down power prices by ensuring a domestic supply.
The scheme, slated to begin in January 2028, will compel gas companies to reserve 20% of their exports for domestic consumption. This measure aims to provide a modest oversupply in the system, which King expects will exert downward pressure on prices. The Australian Energy Regulator will be granted the authority to mandate that companies meet 110% of projected annual demand. This new mechanism will replace the previous Turnbull-era domestic gas security mechanism and reduce the scope for ministerial discretion.
King emphasized that gas is crucial for heating homes, powering manufacturing, processing critical minerals and rare earths, and supporting the integration of renewable energy sources. She acknowledged the difficulty in pinpointing a replacement for gas in certain industrial applications, stating that while research and development into alternatives are supported, no viable replacements currently exist for the immediate and foreseeable future.