The energy minister, Chris Bowen, claims Peter Dutton is “making it up as he goes” with his gas plan, as experts question how a Coalition government would force gas producers to sell to Australians at cheaper prices.
In his first public comments on Dutton’s plan to bring more gas into Australia’s energy market, Bowen claimed the Coalition was simply dusting off a plan created under the former Morrison government.
Dutton on Sunday committed to releasing secret modelling within days that he said showed the Coalition’s plan to bring between 50 and 100 petajoules of extra gas online would lower power prices for consumers.
“He should clear it all up and announce some more details, he’s making it up as he goes,” Bowen told Guardian Australia.
Bowen and Dutton unexpectedly crossed paths at an Assyrian community festival in Fairfield, in Sydney’s west, on Sunday. Earlier in the day Dutton had been at a brick factory in Bowen’s own electorate of McMahon, where the Liberal leader said analysis from Frontier economics – the same firm which had modelled the nuclear policy – would soon be released.
But Labor and Bowen pointed out that Frontier’s first set of modelling, released in December, only showed a small role for gas under the Liberals’ nuclear plan.
Dutton declined to say how the Coalition would achieve lower gas prices before the modelling was released. Bowen claimed the new policy was “word for word” similar to the gas-fired recovery policy from then-energy minister Angus Taylor in 2021 and shed doubts on whether the opposition’s nuclear and gas modelling would tell the full story.
“[He should provide] the full details, and explain why this would be different from Angus Taylor’s leftover, warmed-up policy,” Bowen said.
Under the proposal by the opposition, Queensland’s gas producers would be forced to provide 50 to 100 additional petajoules to Australia’s east coast market – known as a gas reservation – in a bid to bring down the average price from $14 a gigajoule to $10 a gigajoule by the end of the year.
Most of the gas produced on the east coast is exported overseas with enough given to supply gas-fired power generation and industry, commercial and residential users in Queensland, New South Wales and Victoria. Additional gas produced forms part of the “spot market”, which can be redirected to the east coast if there’s high seasonal demand or sold overseas.
The Albanese government introduced a domestic price cap of $12 a gigajoule in 2023 along with other mechanisms to push major gas producers to voluntarily offer surplus gas supplies to the domestic market before sending it overseas.
The Australian Competition and Consumer Commission’s latest gas inquiry report in March found average retail gas prices had moderated from $19.84 a gigajoule in 2023 to $14.51 in the second half of 2024.
Rod Sims, the former ACCC chair, said the Coalition’s promise to further lower gas prices by reserving more Queensland gas for the east coast was a great concept but questions needed answering.
“I think it would be fantastic to get lower prices for gas. It would help industry. It would help our electricity market. The question is, how do you do it?” he said.
“Are you going to force [gas producers] to produce more? I don’t know the answer to that. How are you going to transport the gas? And is $10 [a gigajoule] low enough?”
Sims, who headed the competition watchdog for 11 years until 2022, said gas producers were happy to produce uncontracted gas to the east coast before in the face of shortages but the opposition’s proposal would take it a step further.
“This is not the security guarantee. This is, ‘we want you to oversupply the market so prices will fall’. Different proposition,” Sims said.
“Gas producers want high prices, not low prices, but they’re not going to do anything to lower prices. So, how do you force them to do it?
“How do you get [producers] to do what’s not in their economic interest to do?”
The Coalition’s campaign spokesperson, James Paterson, said he hoped gas producers would work with a Coalition government, if elected, to offer more gas supply to east coast Australians but flagged potential penalties or fines if they did not cooperate.
“If that’s what’s necessary to bring this gas into the market, we’ll do it,” he said, without adding further details.
The Grattan Institute’s head of climate and energy, Tony Wood, warned the policy could undermine, or even collapse, the spot market, leading to dire unintended consequences.
He said the flexibility of the spot market was important to maintain, with the ACCC warning of potential gas shortages Victoria in the coming year.
“When things go wrong in the electricity market, coal fired power stations break down, there’s not enough wind or solar or something, that gas is the one that’s used,” he said.
“If you’ve got an active [spot] market, you can divert contracts … into the domestic market at short notice. But if you haven’t got that, then there’s no gas to supply.
“The idea that this gas reservation – more gas for more Australians – is politically and superficially attractive, is only relevant if the process works.”
Analysis of Dutton’s nuclear plan from the Department of Climate Change, Energy, the Environment and Water – to be detailed further on Monday – revealed bureaucrats have raised concerns that the costs of the Coalition’s plan could be far higher than their modelling suggested, including in construction, refurbishment of the plants later their lives, and costs of extending Australia’s coal fleet.
The analysis, done at Bowen’s request and delivered to the government before the caretaker period began, also raised doubts the nuclear plants could produce as much electricity as the Coalition claims they would, and that Australia would need more power than the Coalition models for.
