Australia’s gas market is about to change in a big way. After months of speculation, the federal government has confirmed plans to reserve part of the country’s east coast gas supply for domestic use — a move meant to ease prices, protect jobs, and keep more energy at home.
A New Direction for Australia’s Energy Future
Energy Minister Chris Bowen announced that gas producers will soon be required to keep 15 to 25 percent of their output for Australian households and industries. The new policy, which applies to any contracts signed from now on, is expected to start operating in 2027. The goal, Bowen said, is simple: make sure Australians have first access to their own gas, reports ABC News.
The government believes that by reserving a portion of supply, it can engineer a slight oversupply in the local market — enough to put downward pressure on prices. The plan follows a six-month review into the gas sector, launched in response to growing concerns about rising prices and potential shortages later this decade. The review examined the competing interests of exporters, manufacturers, unions, and international trading partners.
Why the Gas Market Needs a Reset
Australia is one of the world’s largest LNG exporters, yet domestic users have seen prices soar. On the east coast, gas costs have tripled in the past few years, pushing up electricity bills and threatening energy-hungry industries like aluminium smelting. The government has already spent billions keeping factories afloat. Under the new permit-based model, exporters will need to meet domestic supply obligations before sending gas overseas.
Bowen said he had already spoken with officials from Japan, South Korea, Taiwan, Malaysia, and Singapore — key buyers of Australian gas — to assure them the policy won’t destabilise international markets. The Australian Competition and Consumer Commission (ACCC) has warned that gas supply could fall short by 2028, despite having enough reserves for the next decade. That shortfall, the government says, makes domestic reservation essential.
Divided Views on the Policy
Reactions have been mixed. The Coalition said the government’s plan was “too little, too late,” arguing that a 2027 start date won’t help with current price pressures. Industry leaders echoed similar concerns, warning that while the reservation scheme might help stabilise supply, it won’t fix the core issue — the lack of new gas development. Bowen acknowledged that more gas production would likely be necessary, given the depletion of the Bass Strait fields.
He called gas an “important support” during Australia’s transition to renewable energy. Environmental groups disagreed, saying Australia doesn’t have a gas shortage — it has an export problem. Nearly 80 percent of Australian gas currently goes overseas, and groups like the Australian Conservation Foundation argue that redirecting a portion of that supply to domestic users would be a better solution than approving new projects.
Energy, Jobs, and the Road Ahead
Industry Minister Tim Ayres said the reservation scheme will bring “certainty” for workers and heavy industries that still rely on gas as a stabilising force. The Australian Workers Union called it a “historic victory” for manufacturing, saying it should have been implemented years ago. The Australian Energy Producers lobby group cautiously welcomed the plan, noting that while it provides long-term stability, only new gas supply will ensure lasting price relief.
With Australia’s energy landscape in flux, the government’s new gas reservation plan marks a defining moment — one aimed at protecting local industry, supporting the clean energy shift, and making sure Australians finally benefit from the resources beneath their own soil.
