Australia's gas reservation bill faces criticism over Santos loopholes

Australia is advancing a package of bills that would obligate gas exporters to keep up to 20% of their output for the domestic market, a measure intended to temper high east-coast gas prices that have risen since 2016. The proposal would apply to exporters such as the Gladstone LNG venture run by Santos, while Western Australia would be exempt and the Northern Territory could be included. Union head Paul Farrow warned that the draft leaves loopholes allowing Santos to meet its quota on paper, for example by acquiring local projects and claiming their production, and that ministers would have broad discretion over obligations.

Analysts like Saul Kavonic and representatives of the Energy Users Association say the policy’s effectiveness depends on transparent baselines, which are currently vague and open to lobbying. The Australian Energy Producers lobby warned the mandatory "must-sell" clause could force exporters to sell below cost, threatening the viability of new gas projects. Santos has not responded to requests for comment.