Labor's gas reservation proposal faces industry and environmental pushback over price impact

In a committee hearing in Canberra, Labor introduced a gas reservation bill that would force LNG exporters to keep up to 20% of their output for the Australian market before exporting, with the goal of creating a modest oversupply and reducing east-coast prices. Resources Minister Madeleine King described the expected oversupply as modest, but Greens senator Steph Hodgins-May criticised the plan as a distraction from taxing exporters and warned it could facilitate new gas development without lowering costs.

Australian Energy Producers CEO Samantha McCulloch warned the scheme could drive the domestic sector into decline and raise prices, while Western Australian representatives, including Chamber of Minerals and Energy WA chief Aaron Morey, called for a 40-year carve-out for the state. Labor has altered the proposal from a fixed 20% reservation to a ministerial cap based on advice from the Australian Energy Market Operator and Australian Energy Regulator. Analysts such as Tony Woods of the Grattan Institute argue that a 2-5% reservation would achieve price pressure without harming investment, and the Australian Conservation Foundation cautioned the policy could become a pretext for expanding gas drilling in basins like Beetaloo and Narrabri.