“Gas is flexible” … but it must be affordable: Bowen flags review of gas market regulations

Rules governing Australia’s gas market will be put under the spotlight in a bid to ensure better domestic supply.

Energy Minister Chris Bowen has unveiled a review of Australian gas market regulations, which he says will make sure the energy form is made more available to users.

“We know that gas has an important role to play as we transition to renewables It’s a flexible source of fuel,” Mr Bowen told reporters in Canberra on Monday.

“Gas-fired power stations can be turned on and off at very short notice, which makes it very useful when you’re running a renewable – increasingly renewable grid.

“Heavy industry relies on gas, and 5 million Australian homes use gas to heat their homes. And while many of them are electrifying, we’re also seeing a rapidly depleting supply of gas from the Bass Strait in particular.

“(The review is) making sure that Australian government policy holistically  … is looking at ensuring the efficient supply of gas to industrial users, to domestic users and to the energy system.”

The review will examine the role gas will play in the energy make-up along with renewables, as well as how emissions reduction targets will can be met.

Industry groups and stakeholders will be consulted over the next six months on elements of gas regulations such as the market code and agreements with exporters.

“It’s critical that we use this review to get the settings right in our gas market, ensuring we are securing affordable Australian gas for Australian use, while remaining a reliable energy exporter and delivering lasting energy security in our region,” Mr Bowen said.

It comes as a consumer watchdog report found there was a need for long-term investment in gas supply.

The Australian Competition and Consumer Commissioner report said the east coast had enough in its gas reserves for at least the next decade.

However, a lack of investment in the sector had impeded the development.

“Gas production is not being brought online fast enough to meet demand, and we now expect ongoing shortfalls in southern states as local reserves reach the end of their economic life,” the report said.

“The market is now in the position of having to rely on uncontracted gas from Queensland and transporting it large distances across the east coast.”

The consumer watchdog said the gas market needed to be “well supplied” for an orderly transition to renewables to take place.

AAP