NSW and Victoria should be producing more gas rather than importing it to meet demand, the industry’s peak body says.
Australia’s gas supply situation has improved, with an excess expected for the east coast market in 2025, according to an inquiry report released by a market watchdog on Friday, but there was still a shortfall tipped for southern states.
“The priority should be on providing reliable and affordable gas sourced close to where it is needed,” Australian Energy Producers chief executive Samantha McCulloch said.
With NSW and Victoria facing peak-period shortfalls this winter and structural shortfalls across the east coast by 2027, the report underscores the urgency to fast-track new projects to avoid shortfalls and higher energy prices, she said.
The Australian Competition and Consumer Commission (ACCC) found conditions in the volatile gas market had “eased somewhat”, driven in part by an expected surplus in 2025 and an uptick in market activity.
The watchdog also recommended the role of gas should be made explicit in government planning for the energy transition, with new gas production and supporting infrastructure not being brought online fast enough.
At a time when Australians are facing cost-of-living pressures, governments must do everything they can to remove red tape, legal hurdles and the uncertain policy environment that the commission confirms is deterring investment, Ms McCulloch said.
Treasurer Jim Chalmers said the report showed efforts to deliver more gas at more reasonable prices were making a meaningful difference for homes and industry.
“Australians are under the pump and that’s why we’ve taken decisive action to take the sting out of energy and gas prices – policies the coalition voted against,” he said.
The watchdog projected excess production of between 77 and 112 petajoules on the east coast in 2025, depending on LNG producers’ uncontracted gas exports.
But a shortfall of 16 PJ was still anticipated in the southern states, with gas needing to be transported from Queensland where producers have ramped up output to meet demand.
“Queensland gas is having to do the heavy lifting just to keep the lights on,” federal opposition resources spokeswoman Susan McDonald said.
“With structural shortfalls expected from 2027, it is paramount that Labor reverse their anti-gas policies.”
The opposition also called on Prime Minister Anthony Albanese to kill off “damaging” nature-positive laws, saying they would be a disaster for Western Australia’s world-leading resources industry in particular.
“If a Labor-Greens alliance government is elected in 2025 we expect they will bring back a supercharged version of the environmental protection bill,” WA senator Michaelia Cash said.
Despite ranking among the world’s biggest gas exporters, Australia has faced repeated warnings it might not have enough to meet domestic demand.
But even with the projected east coast surplus and increased market activity weighing on prices, gas prices were “materially higher” than pre-2022 levels.
“While lower than the highs observed in 2022, the prices agreed to over the first six months of 2024 for 2025 supply are around two times higher than they were for the 2021 supply year,” the report said.
Energy Minister Chris Bowen said the federal government was working to deliver a stable electricity grid and cheaper energy with more renewables and gas ready to support it.
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