Gas reservation considered by both sides – March 2017

Filed under: Politics, Australian Politics, Trade and industry, Energy,

Federal Labor has again urged the adoption of its proposed national interest test that could impose a domestic gas quota on large LNG projects.

Shadow treasurer Chris Bowen said the Government was coming late to the issue and should not have mocked Labor's proposal, which was announced in May last year and taken to the federal election.

The policy raises the prospect of a domestic gas quota on large LNG projects by introducing a national interest test for future, or significantly expanded, gas projects that would be assessed by an independent board along the lines of the Foreign Investment Review Board.

“Every time a company wanted to create a new gas project an independent board, appointed by the Treasurer, would assess what impact it might have on the national interest” Mr Bowen said.

Activity that would trigger the test would include: a new liquefied natural gas export facility, a significant expansion of an existing natural gas export facility and a significant material expansion of supply, including from existing domestic supply, to an existing natural gas export facility.

“The government and the Energy Minister have been asleep at the wheel when it comes to this acute gas shortage,” he said. “Australian manufacturers and workers have been crying out for a response on this for at least the past 12 to 18 months.

“Federal Labor has led the way on this issue, taking a national interest test on gas to the last election and all Josh Frydenberg could offer was an attack, no policy response.

“Fast forward seven months and the Turnbull government is only working out now there's a problem,” he said.

Energy Minister Josh Frydenberg suggested that the other eastern states follow Queensland and establish a limited domestic gas reserve.

This would involve a small section of land being quarantined on the basis that any gas found there could only be supplied for domestic use.

“That's quite a creative way forward because it doesn't introduce the possibility of sovereign risk because it doesn't affect existing investments, but it does encourage further investment to supply the domestic market” Mr Frydenberg said.

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