National

Gas now, pay later: industry to critique reservation

By Noah Secomb

Oct 23, 2026

Efforts to bring down gas prices for Australian households through a reservation policy will come under scrutiny as business and industry groups front the parliament.

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The bill facing a committee hearing in Canberra on Friday would require liquefied natural gas exporters to set aside up to 20 per cent of production for the domestic market before it can be sold overseas.

The reservation would create a modest oversupply in the east coast gas market, which Resources Minister Madeleine King has said would bring down prices.

But what has been described as a policy success by government has been soundly condemned by industry groups in the weeks leading up to the committee hearings.

"It risks driving domestic-focused producers out of the market, reducing competition and ultimately putting upward pressure on prices and increasing the risk of future shortfalls," Australian Energy Producers chief Samantha McCulloch said in a statement.

Labor agreed to water down its original pledge of a fixed 20 per cent baseline reservation to a cap instead.

This means producers would be allowed to set aside less gas at the discretion of the minister and on the back of advice from the Australian Energy Market Operator and the Australian Energy Regulator.

But this measure has also copped flak for over-complicating the system from the likes of think tank the Grattan Institute, which has instead suggested set laws to tie the reservation rate to market need.

The gas reservation has also been met with scepticism from the business sector.

The Australian Chamber of Commerce and Industry has supported efforts to secure affordable gas for households and businesses, but warns the reservation fails to meet long-term challenges.

"Reallocating existing production cannot substitute for bringing forward new supply, streamlining project approvals or expanding the infrastructure needed to transport gas to demand centres," policy lead David Alexander said in a submission in September.

The reservation scheme, mirroring one in Western Australia, was announced in December 2025 following a viral campaign led by independent senator David Pocock and progressive groups for a tax on gas exports.

Greens senator Steph Hodgins-May, a vocal supporter of a gas export tax and a member of the committee, has labelled the reservation policy a "pathetic capitulation" to the industry.