The State Government is calling for Canberra to defer and redesign its proposed domestic gas reservation scheme, with Queensland set to bear the brunt of the planned changes.

In a submission to the Federal Government on the draft framework scheme, the Crisafulli Government warned that the proposal on the table unfairly targeted Queensland and risked undermining the state’s economy and national energy security. 

The federal scheme would mandate that the equivalent of 20 per cent of all LNG exports be supplied to domestic users.

Queensland’s gas sector delivers $4 billion investment annually, supporting 44,000 jobs and contributing $1.1 billion in royalties in 2025-26, according to the State Government.

This is forecast to rise to $1.9 billion in 2026-27, but would take a hit under the planned reservation scheme. 

Natural Resources and Mines Minister Dale Last said Queensland’s gas industry had consistently delivered reliable supply for decades and continued to play a vital role in supporting households, manufacturers and energy generation across the country. 

“Our submission makes it clear the scheme’s design is fundamentally flawed. Queensland is the east coast gas market and while we’re doing all we can to encourage new investment, this policy applies a handbrake,” Mr Last said.  

“Despite being presented as a national scheme, carve-outs have been signalled for other jurisdictions, while Queensland’s existing domestic reservation policy and role in underpinning the domestic market have not been recognised. 

“What we need is more exploration, production and infrastructure – reallocating existing supply does not address the root cause of the issue.  

“Queensland’s LNG exporters, domestic-only producers, explorers, investors, trading partners, and regional councils have all expressed concerns about the lack of genuine engagement from the Commonwealth.” 

The Queensland Resources Council (QRC) has also put its case against the proposed domestic gas reservation scheme, saying it would unfairly punish Queensland producers, threaten investment and put future gas supply at risk.

“Intervention that simply redistributes existing volumes without encouraging new production will not deliver additional supply and will lead to higher prices in the long term,” QRC chief executive officer Janette Hewson said.

“Queensland gas producers and communities are being punished because other states chose not to develop their own resources.

“There is a real risk of domestic oversupply, meaning that domestic gas producers may be then discouraged from investing in future projects, like the Taroom Trough, which are critical to Australia’s long-term energy security.”

Ms Hewson said the QRC supported the objective of a properly designed reservation scheme that delivered reliable and affordable gas supply for Australian households and industry, but warned that the proposed market intervention would not deliver this.