Gas code, page-3

Appeas response

10July 2023

WITH MANDATORY CODE IN PLACE, GOVERNMENT MUST FOCUS ON NEW SUPPLY TOAVOID SHORTAGES

Australia’s oil and gas industry has called on the Federal Government toprioritise addressing forecast gas supply shortfalls to avoid black outs andfurther cost-of-living pain after taking control of the gas market with its newMandatory Code of Conduct.

The Australian Petroleum Production & Exploration Association(APPEA) said the Code, released today,puts the Government at the centre of the gas market, determining the conditionsfor new supply through bilaterally negotiated agreements with gas producers.

APPEA Chief Executive Samantha McCulloch said the Government must now focus on ensuring new gassupply to address looming structural shortfalls.

TheAustralian Energy Market Operator (AEMO) and the Australian Competition &Consumer Commission (ACCC) have both warned of gas shortfall risks during peakwinter periods from this year, and structurally from 2026-27, which carry withthem severe risks to the economy.

TheACCC states that shortfalls “would place continued upward pressure on pricesin the domestic gas market, as well as pressure on the electricity market”.

MsMcCulloch said the test for the Government’s Mandatory Code of Conduct would beif it can support investment that is urgently needed to bring on new gassupply.

“Aftermore than 6 months of uncertainty as the Code was developed, investment in newgas supply is now urgently needed to avoid shortages that will add to energysecurity concerns and cost of living pressures for Australian households andbusiness,” she said.

“TheGovernment has taken the reins of the east coast gas market and with this comesthe responsibility for ensuring sufficient supply and investment certainty.

“Theindustry has consistently demonstrated its commitment to the domestic gasmarket, including with 260 PJ of new indicative supply commitments made duringthe Code consultations.

“Gasproducers will work constructively with the government and users within the newframework established by the Code and in the development of the Future Gas Strategyannounced in the May Budget.”

“Itis critical that the Future Gas Strategy delivers the long-term economic,energy security and emissions reduction opportunities associated withAustralia’s natural gas resources while ensuring sufficient gas supply in thenear- to medium-term.”