Australian peak oil and gas body APPEA has spoken out on domestic gas reservation policies flagged on Monday by the unions.
The Australian Workers Union, through its lobby group Reserve Our Gas, has launched a campaign to reserve a percentage of gas production for domestic use, worried that higher prices on the global market will see Australian gas sent offshore.
However APPEA said this strategy will “penalise” exporters by dictating where they can sell the gas they produce and how much for.
Western Australia is the only state which has a gas reservation policy, something APPEA says hinders investment.
“There’s a very good reason why gas reservation has been rejected by every government in Australia except one – it simply doesn’t work,” APPEA said.
Pointing to WA’s Economic Regulation Authority, APPEA said setting aside production for domestic consumption increases the reliance on subsidised gas prices and discourages efficiency and innovation.
“Reservation doesn’t work. And that’s probably why we don’t do it for any other commodity such as iron ore, wool, wine, wheat or beef,” APPEA said. “The only solution to gas shortages is to develop more gas. It’s simple.”
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