PERTH (miningweekly.com) – The Australian Petroleum Production & Exploration Association (Appea) this week said that the oil and gas industry would work with the federal government on consultation to extend the Australian Domestic Gas Security Mechanism (ADGSM) until 2030.

Minister for Resources and Northern Australia Madeleine King earlier this week said the existing ADGSM was an important tool that the government could use to ensure ongoing security of Australia’s domestic gas supplies, but had some clear shortcomings. It is currently due to expire at the start of January 2023.

“The oil and gas industry will work with the government as part of the consultation on extending the ADGSM,” Appea acting CEO Damian Dwyer said.

“Australian natural gas has a critical and ongoing role to play in the cleaner energy future mix, both domestically and internationally, but to do that it needs investment certainty. Australia needs to be conscious of the signal any consultation sends to our longstanding trade and investment partners who have invested in the Australian economy because of our investment stability and purchase our gas at great benefit to the Australian people.

“Just look at the A$6-billion in royalties over five years Queensland recently forecasted from the state’s liquefied natural gas (LNG) projects. These foreign investors and trading partners are the same partners Australia will work with to build our future hydrogen export industry, so it is important to demonstrate consistency, certainty and market stability now.”

Dwyer said it was important any policy changes in response to recent east coast energy market pressures focused on the now well-established problems: coal-powered generation outages and renewables dropping out of the grid, resulting in an extraordinary demand for gas in a very short period.

“There was no gas shortfall, the Australian Consumer Complaints Commission has said that 11 straight times, but there was a rapid call on gas, with little notice, due to failures elsewhere,” he said.

“EnergyQuest research shows east coast gas users paid lower prices than overseas customers and gas exports weren’t to blame for pricing pressures.

“Gas price rises in March, April and May were found to be related more to the increase in gas stepping up to help rather than anything to do with LNG exports. During the period of rising spot prices, coal seam gas production from the LNG projects exceeded exports by 8.1 PJ.”