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Queensland Labor’s factional rivals joined forces to demand the Albanese government introduce an east coast gas reservation, as momentum grows to keep greater supplies of the fossil fuel in Australia.
The rare move of factional solidarity comes after industry executives in August reversed long-running opposition to the policy, with two major liquefied natural gas exporters supporting new domestic supply commitments, including rules compelling the industry to set aside a specified amount of gas that cannot be sold overseas and must be delivered locally.
At the Labor state conference in Brisbane on Saturday, Opposition Leader Steven Miles, the state’s most senior Left faction leader, and Australian Workers’ Union boss Stacey Schinnerl, Queensland’s most prominent Right faction powerbroker, jointly supported the resolution.
While Australia is one of the world’s top shippers of LNG, most of it produced in Queensland or WA, the gas is sold on long-term contracts to Asia.Credit: Bloomberg
The AWU has long-supported an east coast reservation, but it was the first time Miles has publicly declared his position.
“Of course, we want to transition those [heavy] industries to renewables and storage, away from fossil fuels, [but] we still need affordable gas to deliver on that transition. It allows us to retire our coal generators in a managed way,” the Labor leader said.
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“[The resolution] also commits my team to campaign and advocate for that, but it should also signal our intention that this is an area of policy we’ll want to take a really strong position on in the lead-up to the 2028 election campaign.”
The move comes amid intensifying concerns from Australian governments, regulators and gas users that too much LNG is being shipped offshore from Queensland, exacerbating a supply crunch and driving up prices.
The Albanese government is finalising a review of laws and regulations governing the LNG sector to “make sure they are delivering as intended”.
Federal, state and territory energy ministers will meet in Canberra on December 16 – the week that a decision was likely to be announced on what form of gas reservation would be adopted by the Albanese government, industry sources told this masthead.
Shell, which produces super-chilled LNG at its QCLNG joint venture near Gladstone, told the federal government earlier this year it would back new commitments or reservation rules, as long as they applied equitably across the industry and were accompanied by a set of regulatory changes to remove barriers to drilling and developing new sources of gas.
This came after another Queensland exporter, Australia Pacific LNG, said it believed an export licensing and permitting regime that guaranteed supply for the domestic market was the best way to tackle concerns around supply shortfalls and rising prices. APLNG, whose backers include Origin Energy, US giant ConocoPhillips and China’s Sinopec, said domestic contributions must be spread equitably among exporters.
Most of Queensland’s gas is locked into long-term export deals and sold as LNG to Asia. APLNG and QCLNG are also key suppliers of east coast domestic gas, together accounting for about 40 per cent of the market. The state’s third LNG exporter, the Santos-backed GLNG business, however, is a net withdrawer of domestic gas to meet its export commitments.
The threat of local gas shortfalls emerging in south-eastern Australia from 2028 marks a deepening challenge for governments, which are having to balance goals to tackle climate change with the need to shore up supplies of polluting fossil fuels for those who still depend on them.
Households are increasingly switching from gas stoves and heaters to electric alternatives, aided by government incentives and policies banning gas hook-ups in new residences. However, that shift is not happening fast enough to avert the need to boost gas supplies, the Australian Energy Market Operator has warned.
Major gas users, including factories that need the fuel to make products such as steel, cement, bricks and fertiliser, have been pleading for the government to clamp down on the LNG sector with export restrictions.
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