Let’s take a look at another of the Coalition’s policies: the gas reserve.

The ABC’s Sally Sara asked Ted O’Brien this morning on RN Breakfast:

Can you clarify how gas companies will be forced to reserve supply for the domestic market. What’s the stick here? What’s the penalty if they choose not to do that?

O’Brien:

Well, look. Our number one priority is to increase supply of gas. That’s the number one thing. We need to unlock more gas, get gas out of the ground. Number two, we need to prioritise gas for the Australian people. And number three, we need to get it to where it’s needed. So, we have a full suite of policies to deliver on those outcomes and to make sure it’s delivered in Australia at a cheaper price, which means we need to decouple it from the international market. Then how we do that, well in the short term, how we do it is we work with the big gas companies, especially those which are exporting to ensure that they can allocate more Australian gas to the Australian market. So we’re wanting to see up to additional 20% put into the market. And we believe that can be done while also honouring the volumes and economics of the deals in place with our key trading partners.

A few things

  1. O’Brien is admitting that we do not have a gas shortage. We don’t need more gas, because we can have a domestic gas reservation even with the current contracts in place.
  2. He has no idea how this will actually lead to cheaper gas, because as we have pointed out our gas retail sector is dominated by the Big 3 of AGL, Origin and EnergyAustralia and they already charge households up to 3 times more for gas than they do businesses, all because they can. So if we want lower gas prices, we will also need stronger regulation of the gas retail market.
  3. That 20% figure he is using emerged from the gas companies talking about how their ‘uncontracted gas’ which just backs up number one – they don’t need to break into export contracts to do this, as we have more than enough gas just sitting here. So we don’t need to open more gas fields. But while those gas prices are still exposed to the export market, you can not guarantee that energy prices will come down.