Queensland LNG reserve for domestic consumption only
John McCarthy, The Courier-Mail
January 25, 2017 12:00am
Subscriber only
THE State Government will take a tentative step to reduce energy bill shock by isolating a part of the Surat Basin for a trial domestic gas reservation.
The strategy is an acceptance by the Government that the market has failed business and consumers and that energy costs are a potentially major problem.
It follows a report from National Australia Bank last week that claimed the LNG export of gas from Gladstone was soaking up all the reserves and could lead to a 50 per cent increase in gas prices for households.
The Queensland Government, which faces an election before May next year, is refusing to call it a domestic reservation trial, but has said it would allocate a small volume of potential gas supplies for Australian use only.
Domestic reservations have been ridiculed in the past because it was believed it would not be economical for a company and would create a market failure, but the issue has become so severe that manufacturing companies are complaining they can’t source gas at any price.
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“With gas shortages on the Australian eastern seaboard the focus of regulators and industry nationally, the Government will release about 58sq km of land for gas exploration, under the condition any gas produced must be used in Australia,’’ Natural Resources Minister Anthony Lynham said.
“Reliable supply for energy and feedstock is critical to business and industry, and the jobs and revenue they generate.
“Gas is a significant transitional energy source as we head to a renewable energy future.’’
The gas shortage has been caused by the coal seam gas industry in Queensland not being able to produce enough gas to meet its export contracts.
That means the LNG companies are forced to buy gas from elsewhere.
