Queensland is under more pressure to produce gas for southern states.

The Australian Competition and Consumer Commission (ACCC) had warned of potential shortfalls in New South Wales and Victoria, where existing production continues to decline, the Australian Petroleum Production and Exploration Association (APPEA) said.

The latest ACCC June 2023 Interim Gas Inquiry Report showed adequate supply that demonstrated the industry’s commitment to the domestic market and keeping the lights on along the east coast of Australia, APPEA said.

Gas producers delivering

Australia’s gas industry was delivering on its commitment to households and businesses, chief executive Samantha McCulloch said.

However, the report’s warning that the southern states were increasingly reliant on Queensland and needed substantial volumes to avoid shortfalls was the latest in a long line of warnings to Victoria and NSW, Ms McCulloch said.

“The ACCC report highlights there is not enough gas being produced in NSW and Victoria where huge populations rely on gas while uncertain regulatory regimes and bans are stifling investment in new supply,” she said.

“Because of these bans, moratoriums and interventions, millions of NSW and Victorian gas users pay an extra $2/GJ whenever their state has to transport gas from Queensland.”

The best way to avoid shortfalls and put downward pressure on prices was to bring on new supply close to where it was used, because the cheapest gas was that closest to the customer, she said.

“New supply such as the Santos Narrabri Gas Project, which could supply up to half the natural gas used in NSW homes and businesses, is needed as a matter of priority.”

Related: Gas Best Path To Low-Carbon Hydrogen Says APPEA

The ACCC had also identified regulatory uncertainty was still gripping the market and impacting contracting, said Ms McCulloch.

“In particular, there is ongoing uncertainty around how the market will operate under the Mandatory Code of Conduct,” Ms McCulloch said.

The Code – expected to come into force in early July – effectively sees the government take on the responsibility of matching market demand with supply, through bilaterally negotiated agreements with producers.

Record export earnings

A new report shows Australia’s oil and gas industry is continuing to help drive the national economy, supporting thousands of jobs and delivering tens of billions of dollars of economic benefits to Australians.

The Federal Government’s Resources & Energy Quarterly, released today, shows LNG export earnings were revised up to a record $92 billion over the past financial year as part of a $460 billion return for the resources sector.

The record LNG performance for 2022-23 was up slightly on recent forecasts and up from $70 billion the previous year.

The report said gas exports were forecast to total $68 billion this financial year as overall resources exports come off record highs to total $390 billion. LNG exports would total $60 billion the following year.

The report said oil exports in 2022-23 totaled $13 billion and were expected to climb to $14 billion this year before recording $12 billion the following year.