Statement from Minister for Industry, Science and Technology, Matt Canavan to 7.30. 20 August
2019

1. Several people have said to us that while the government’s actions (depending on the details)
might stop gas prices getting worse, the days of cheap gas are over, and they won’t put a
significant dent in prices. What do you say to that?
Answer
Australian gas prices will not return to their historically low levels unless we make major, new oil
discovery. Cheap gas tends to exist when it is a by-product of a larger oil basin. There is not much
oil left in the Bass Strait and the gas that is left has a higher cost to develop. The coal seam gas
fields of Queensland do not have any oil and are also higher cost forms of gas production. They
are also a great distance from many of our traditional manufacturing centres in southern
Australia. The transport costs from Queensland alone can be up to a third of the delivered price
of gas in southern Australia.
The Australian Government’s actions have helped lower gas prices, which are down by around a
quarter since they peaked in early 2017. Contract offer prices have fallen by up to half in some
cases. The Australian Energy Market Operator and the Australian Competition and Consumer
Commission have both found that the actions of the Australian Government have helped to
ensure supply and bring down prices in the domestic market.
Nothing the Government can do will alter geological and geographical facts. The only way to
achieve substantially lower gas prices is to make new discoveries and that is why the state
government’s unscientific bans on gas production make no sense.
2. The gas industry is critical of any intervention in the market, and says it could have the opposite
intended effect – that it could stifle investment, lowering supply, and pushing up prices. What do
you say to that?
Answer
Market intervention should always be a last resort of Government and only undertaken when
there are significant structural issues that can’t be addressed in other ways. This is what we are
facing.
The oil and gas industry has shown it can work with government in reserving gas for the domestic
market while investing more than $150 billion in new projects in Western Australia and
Queensland. In Western Australia, new gas investment has continued with a reservation scheme
which is delivering certainty in domestic supplies and lower prices at around $4 per gigajoule.
3. Senator Patrick has described the east coast gas market as one run by a cartel. Are a small
number of players on the east coast pushing up prices for consumers?
Answer
I have said consistently that more gas supplies and more gas suppliers is the best way to increase
competition and lower gas prices.

 The Government has extended the work of the ACCC in monitoring gas markets out to 2025. The
ACCC has specific and strong powers to prosecute cartels in markets if and where they are found
to exist. To date the ACCC has not found evidence of a cartel operating in the east coast gas
market.