"A decision to reserve a portion of gas production to meet Australian needs has been a long time coming, but is welcome all the same," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"The best time to announce a national gas reservation policy would have been in 2007 and 2008, before any contracts were locked in for the wave of LNG export terminals that transformed Eastern Australia's gas market and ever since sent local prices soaring.
"The second best time to enact a system to guarantee local supply is right now. New contracts, and new supply investment to meet them, are in the offing over the next few years. No serious participant in the process wanted to rewrite the rules retrospectively once investments have been made. There was only a short window left to make a clear declaration that would-be gas exporters operating on the east coast will face an obligation to supply the domestic market – just as they do on the west coast.
"Today's announcement is high-level and there remain important details to settle. But today's announcement is welcomed by industry and marks a clear dividing line: from this point forward, the opportunity to export gas comes with domestic responsibilities which will play an important part in the ongoing survival of crucial local industries.
"Quite simply, the situation until now has been gradually driving Australian industry to the wall and was unsustainable in the medium and long term.
"Many businesses use gas for process heat or feedstock, and all rely on electricity that is ultimately backed up by gas peakers.
"The final details of this reservation system need to ensure that the percentage reserved is large enough to underpin supply security; use a definition of 'new' that is clear, fair and enables the earliest effect on the real world; and drive exporters to meet their obligations by whatever means suit energy users best, through accessible supply or transitioning demand.
"Australian Industry Group will remain deeply involved in ongoing discussions on energy users' behalf as the reservation becomes a reality," Mr Willox said.
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