Resources Minister Madeleine King says the Albanese Government’s new east coast gas reserve will cut energy prices but has kept tight-lipped on the modelling behind the major energy reform.
Under Labor’s plan, Australian gas producers will be required to reserve 20 per cent of their gas for domestic use.
In an address to the National Press Club on Wednesday, Ms King said she expected putting modest oversupply into the energy grid would “push down those prices”.
“We do expect to see that downward pressure on prices. it’s a very important aspect of the whole scheme,” she said.
The plan aims to deliberately oversupply the local east coast gas market to 110 per cent of forecast domestic demand
Ms King cited “commercial in-confidence” when asked what impact the policy would have on wholesale gas prices and whether she could put a specific dollar figure on the savings per gigajoule, as former Liberal leader Peter Dutton did for a similar east coast reservation policy proposed in 2025.
But the minister vowed the demand mechanism would not tank the gas price.
Ms King also told the NPC Labor had “no plan” to move forward with a gas tax despite a viral social media campaign advocating for such a levy, led by independent Senator David Pocock and popular influencer Konrad Benjamin, known as Punter’s Politics.
Challenged over whether Labor had struck a “worst of both worlds” policy” — failing to raise revenue while putting gas producers offside and risking future investment — Ms King insisted Australia had to achieve a “fine balance”.
“We all know having too little gas to firm renewables or provide for the manufacturing industry is as dangerous as having a massive oversupply, which crashes the market,” she said.
“So, it’s a really fine balance that we’ve got to achieve here. We are about getting the sufficient volume into the system to put that downward pressure on prices.”
The legislation tabled to Parliament on Wednesday had several tweaks from the draft released on September 10, including limiting ministerial discretion.
WA Premier Roger Cook had raised the level of ministerial discretion over imposing domestic gas obligations on industry as a key gripe in his keynote address at a Chamber of Minerals and Energy event last week.
WA, which has had its own gas reservation policy since 2006, had pushed to be exempt from the Commonwealth reservation regime.
Chamber of Minerals and Energy boss Aaron Morey said the volume of gas delivered into WA’s domestic market last year exceeded 20 per cent of LNG exports and didn’t need to be interfered with.
Shell and Woodside have raised concerns it will influence pricing which would prompt them to reconsider projects.
Ms King insisted that WA hadn’t been left in the dark during the process and that her refinements to the legislation had gone far enough to address Mr Cook’s concerns.
She said it also included preventing loopholes to game the scheme and ensuring states and territories were consulted.
She listed “market-wide domestic supply obligation adjustments” as an example.
Under the updated legislation, existing “well-supplied markets” like WA would only face obligation adjustments if triggered by the Resources Minister.
“Within the scheme itself, there are decisions yet to be made,” she said.
“We have to go through this legislative process, but there is a mechanism in that, that allows for an existing well-supplied market to have adjustments made to that domestic supply obligation.
“And as you can imagine, Western Australia has a domestic supply obligation in place already,
“And so that will be factored into how that gas market system works within the overall scheme.”
The peak body for the resources sector in WA welcomed the amendments but said it remained cautious over the levels of ministerial discretion.
The peak body for the resources sector in WA welcomed the amendments but said it remained cautious over the levels of ministerial discretion
Mr Morey also raised concerns about broad veto powers given to Energy Minister Chris Bowen rather than the Resources Minister.
He argued the veto duplicated existing federal powers and appeared “unnecessary” in the bill.
“The Bill also appears to hand the Energy Minister wide-ranging veto powers over decisions that rightly rest with the Resources Minister, while introducing unnecessary ministerial veto powers over merger and acquisition activity and the transfer of LNG export licences,” he said.
“These provisions appear unnecessary to meet the objectives of the Bill – to protect domestic gas supplies – and duplicate existing powers that the Federal Government already holds over investment and foreign ownership.
“Another issue that must be addressed is the legislation’s ambiguity about how a carve-out for WA would apply to future projects.”
When asked to set a timeline for when Australia would phase out gas entirely, Ms King declined to answer, insisting it was impossible given there is no alternative in the “foreseeable future”.
She said while the use of renewables was increasing — including cases where some mines were almost entirely operating on green energy — gas was still critical.
Minister King addressed the Albanese Government’s critical minerals agenda and insisted “Australia is on the verge of becoming a legitimate competitor”.
Australia and partner nations are seeking to disrupt China’s hold in the critical minerals market, which is responsible for processing 90 per cent of the world’s rare earths and magnets — which are critical for smartphones, cars, household appliances and defence equipment.
“We cannot have a critical minerals revolution here in Australia without a guaranteed supply of affordable gas, and we must keep developing gas for export for our regional partners,” she said.
Ms King also hinted to possible changes to the Government’s critical mineral strategy, saying it would be “updated in the near future”.