Gas markets

Gas is an essential transition fuel as we move to a lower emissions future.

The Department of the Environment and Energy works closely with high level bodies including:

  • Council of Australian Governments (COAG) Energy Council
  • Australian Energy Market Commission (AEMC)
  • Australian Energy Market Operator (AEMO)
  • Australian Energy Regulator (AER), who together oversee the national (east, north and west) gas markets.

The Australian Gas Taskforce and the Gas Market Reform Group are in place to look into gas market issues in more detail. In addition, the ACCC and AEMO will continue reporting to the Energy Council on the state of the energy market as a whole.

What is being done to address changing gas prices?

Australian domestic gas prices are higher than in our export markets. A number of actions are being taken by the Australian Government to address this.

Ensuring there is no domestic gas shortfall

The Australian Domestic Gas Security Mechanism is a temporary measure which commenced on 1 July, 2017. It aims to ensure that the domestic market doesn’t experience gas shortfalls due to gas export commitments. This mechanism means that, if necessary, the Government can restrict liquefied gas exports if they are deemed to leave the domestic market short of gas. The decision as to whether or not to restrict exports sits with the Commonwealth Minister for Resources and Northern Australia. The Minister will rely on assessments from AEMO, the ACCC, industry and other stakeholders in the decision-making process.

Improving the transparency, competitiveness and long-term security of Australia’s gas supply

To improve the transparency, competitiveness and long-term security of gas supply in Australia, the Australian Government announced measures of around $90 million in Budget 2017-18.

These measures include:

  • $30.4 million over four years for new combined geological and bioregional resource assessments in three onshore areas that are underexplored but prospective for unconventional gas.
  • $28.9 million to support the environmentally and socially responsible development of onshore gas reserves led by the Department of Industry, Innovation and Science.
  • $19.6 million to the COAG Energy Council’s Gas Market Reform Group to further expedite reforms that will shape the gas market of the future through enhanced transparency and competition in the market, supporting Australia’s manufacturing sector and placing downward pressure on prices.
  • $5.2 million to examine options for transporting gas from the north and west of Australia to the east coast gas market.
  • $2 million scoping study for additional transparency improvements to the National Gas Services Bulletin Board.
  • $0.5 million to examine the constraints impinging on increased gas supply on the east coast of Australia.

Meeting peak demand

Gas powered generation of electricity has become increasingly important to electricity supply in the past decade and measures are in place to ensure we can meet our energy needs during peak demand periods, such as heatwaves.

The gas pipeline industry agreed to support the Peak Electricity Demand – Gas Supply Guarantee by committing to provide pipeline access to ensure the gas arrives at its destination on time and at a reasonable price. The Australian Pipelines and Gas Association (APGA) will work with AEMO, AEMC, the Australian Gas Taskforce and industry to ensure that necessary arrangements are in place in place for the 2017-18 summer.

More information