Additional comments from the Australian Greens

1.1The Australian Greens recognise that fossil gas exporters have unscrupulously used their dominant market power to extract higher prices from Australian customers and that this needs to be addressed by the Australian Parliament.

1.2To that end, we support the introduction of measures that limit their market power through conduct provisions and process standards for commercial negotiations to reduce power imbalances between industrial customers and the gas cartel.

1.3However, the blanket exemption for retailers is a cause for concern and the conduct of retailers will be watched closely by the Greens to see if the GasMarket Code should also be extended to cover their commercial arrangements.

1.4The Greens also support the transparency provisions within the code to improve what has traditionally been a very murky market where gas companies have been able to benefit from information asymmetry, not just against their trapped customers, but also against the government.

1.5Despite being supportive of these parts of the code, the Australian Greens have deep concerns that the expanded exemptions framework within the code has been created with the explicit purpose of encouraging new gas fields to be opened in the middle of a climate crisis.

1.6Emissions are forecast by the government to increase in the year to June 2023 under the Albanese Government’s watch by 4.1 million tonnes.[1] Encouraging more gas fields through measures like this Gas Market Code will only see emissions rise further.

1.7It is deeply concerning that in light of the gas shortfall forecast for 2027,[2] all of the government’s resources have been focused on expanding new gas fields that will operate beyond 2050 instead of implementing measures to reduce gas demand in the short term.

1.8Similarly, there is no effort to impose measures on the LNG industry to reduce the 92 petajoules (PJ) they use themselves to liquify gas for export, nor to limit the net 22 PJ of gas the LNG industry have sucked out of the domestic market above what they have put back in.[3]

1.9Gas exporters have contracted to export more gas than they can produce. This should be a problem solely for the gas companies. Instead, they have made it a problem for the Australian people and the Federal Government. Intervention to prevent gas being sucked out of the domestic market to fulfil their overly ambitious export contracts should not be howled down as sovereign risk when it is entirely the fault and therefore the problem for the contracting parties.

1.10Reducing gas demand in homes and businesses, electrifying the liquefaction process, restricting LNG exporters taking gas out of the domestic market and investing in industrial replacements for gas use via the National Reconstruction Fund and Powering the Regions Fund, should all be measures pursued over the next four years to close the projected gas shortfall.

1.11If Germany can reduce its gas use by 17.6% in one single year, then surely Australia can reduce its gas use over four years to close the shortfall, reduce inflationary pressures and reduce pollution.[4]

1.12The reduction of gas usage in Australia is a challenging, but achievable task that is necessary in these critical years we have left to act on the climate crisis. Instead, the Albanese Government—through implementation of the mandatory Gas Code of Conduct—has bent over backwards to help gas companies, many of which make significant and regular political donations to the AustralianLabor Party, expand their pollution with new gas fields.[5]

Senator Nick McKim

Member

Senator for Tasmania

Footnotes

[1]Department of Climate Change, Energy, the Environment and Water (DCCEEW), Quarterly Update of Australia’s National Greenhouse Gas Inventory: March 2023, p. 9, Quarterly Update of Australia’s National Greenhouse Gas Inventory: March 2023 (dcceew.gov.au) (accessed 4 October 2023).

[2]Australian Energy Market Operator (AEMO), Gas Statement of Opportunities—For central and eastern Australia, March 2023, p. 76, Microsoft Word - 2023 Gas Statement of Opportunities v1.2 (aemo.com.au) (accessed 5 October 2023).

[3]Mr Hew Atkin, Branch Head, Gas Markets, Gas and Liquid Fuels Division, DCCEEW, Proof Committee Hansard, 21 September 2023, p. 25; Australian Competition and Consumer Commission (ACCC)—001: Answers to written Questions on Notice from Senator Nick McKim post public hearing on 21 September 2023—LNG Companies (Received on 22 September 2023).

[4]Enerdata, Germany’s gas consumption and imports declined in 2022, 9 January 2023, Germany’s gas consumption and imports declined in 2022 | Enerdata (accessed 4 October 2023).

[5]Royce Kurmelovs, ‘More money than ever’: gas companies made almost $1m in donations to Labor and Liberals | Australian political donations | The Guardian, 1 February 2022 (accessed 5October2023).