Australia’s government unveils an east coast gas reservation policy requiring LNG exporters to set aside 15–25% of output for the domestic market to curb bills and avert shortfalls.

Climate and Energy Minister Chris Bowen backs domestic price relief, arguing the 15–25% reserve could prevent shortfalls and even create slight domestic over-supply to stabilize prices.

The Albanese government frames the scheme as a response to projected domestic shortfalls and rising energy costs.

Policy design and timing are under debate, with anticipated market-wide effects not kicking in until 2027, and a call for investment in storage, pipelines, and new supply.

Critics warn reserving gas could deter investment if sold only on market terms and point to past ACCC findings that interventions may worsen shortfalls.

The scheme draws on Western Australia’s 2006 model and treats the east and west coasts as separate markets due to geography and lack of import terminals.

Consumers are gradually shifting from gas to electric appliances, boosted by incentives and bans on new gas hookups, though the transition hasn’t fully alleviated supply concerns.

Industry Minister Tim Ayres stresses secure, affordable gas is crucial for manufacturing competitiveness and decarbonisation, noting gas remains essential for certain facilities.

The policy applies immediately to new contracts and extends WA’s reservation approach to the east coast.

Analysts say pricing relief for consumers may lag, but large industrial users with multi-year contracts could benefit as cheaper gas becomes available.

Shortage drivers include Queensland onshore fields exporting to Asia, a fully utilized NSW/Victoria pipeline, and dwindling Bass Strait reserves with few new projects.

ACCC forecasts a tight east coast gas market into 2026, with regions relying on Queensland surplus to meet demand.