Analysts and big energy users say loopholes in a proposed federal gas reservation scheme could let Santos escape its obligations. Under the plan, exporters would set aside up to 20 per cent of their production for the domestic market each year. Union leader Paul Farrow warned the draft laws could allow paper supplies and wide ministerial discretion. Santos has been accused of driving up east coast prices by buying large volumes of local gas to export. Industry lobby Australian Energy Producers argued the policy goes too far and could reduce supply.
Proposed federal laws would require liquefied natural gas exporters to supply gas to domestic customers. The Domestic Gas Reservation Scheme has been introduced to parliament but not yet finalised. Debate centres on whether the scheme would place a disproportionate burden on Santos, particularly through its Gladstone LNG project, or give it unfair benefits through exemptions for existing contracts. Critics question whether contract extensions should be protected. Santos chief executive Kevin Gallagher has called for clear, transparent rules rather than broad ministerial discretion.
The Federal Government has introduced legislation to create the National Gas Reservation Scheme, which it describes as a landmark moment and Australia's first national gas reservation scheme. Resources Minister Madeleine King says the aim is to secure gas for domestic and business use at fair prices. The bills include a reservation figure equal to 20 per cent of export volumes, changes made after consultation, and the removal of the Australian Domestic Gas Security Mechanism.
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Labor has scaled back its domestic gas reservation scheme before it begins, limiting ministerial discretion over how much gas exporters must reserve. Resources Minister Madeleine King introduced the amended legislation to parliament on Wednesday. The original plan of 20 per cent has become an obligation of up to 20 per cent, and existing contracts are exempt. Critics, including unions, conservationists and business groups, say the draft still leaves exporters loopholes to sell to overseas buyers. A report also argues Western Australia's domestic gas shortfall stems from exporters choosing higher-priced markets rather than a lack of supply.
Labor has scaled back its domestic gas reservation scheme before it begins, limiting ministerial discretion over how much gas exporters must reserve. Resources Minister Madeleine King introduced the amended legislation to parliament on Wednesday. The original plan of 20 per cent has become an obligation of up to 20 per cent, and existing contracts are exempt. Critics, including unions, conservationists and business groups, say the draft still leaves exporters loopholes to sell to overseas buyers. A report also argues Western Australia's domestic gas shortfall stems from exporters choosing higher-priced markets rather than a lack of supply.
