A Hunter businessman is calling for the state government to introduce a law to give the Australian domestic market first dibs on gas extracted in NSW.
Garbis Simonian, who runs the energy-hungry coalfields business Weston Aluminium, says the NSW Government should introduce a gas policy to enshrine protection of the domestic market in law and help guard the nation against future gas shortfalls.
“If there is gas developed in NSW, say Narrabri is developed, there is no policy – any law – that the gas must be first used as a priority for the domestic market,” he said.
“In the United States, in any large infrastructure, gas or resource project, they apply what’s called the national interest test, where any product cannot be exported until it meets the domestic market – it’s law. We should have a national interest test. NSW should pass a state-benefit policy that any gas found should first supply the domestic market.”
It comes after the Australian Competition and Consumer Commission’s interim report on energy, released last week, found the shortfall of gas on the Australian east coast would be three times larger in 2018 than previously forecast.
It has prompted Prime Minister Malcolm Turnbull to consider pulling the trigger on a temporary ban on gas exports. But Mr Simonian said a domestic gas law would help avoid such shortfalls in future.
He was part of an unsuccessful play earlier this year to have gas transported through a proposed pipeline that would have passed through the Hunter.
Mining company Santos instead opted to continue with its existing plan to transport gas from its Narrabri project – which is yet to be approved and faces loud opposition from some parts of the community – via a pipeline through the western slopes.
A spokesman for NSW energy and resources minister Don Harwin said the government did not support a domestic reservation policy.
“It is up to the federal government, and in their power, to resolve the problems caused by the growth of the LNG [liquefied natural gas] export sector,” he said.
“The NSW Gas Plan sets scientific policy settings to ensure strong protections for communities and the environment whilst allowing the sensible development of gas in NSW.”
Federal Hunter MP Joel Fitzgibbon said the law “should not be necessary” because Australia had enough gas for domestic and export purposes.
“It’s simply a matter of getting more gas out of the ground and we need to do it fast,” he said. “Governments do, however, need to ensure companies are not locking up gas and sequencing projects to manipulate prices.”