PERTH (miningweekly.com) – The Australian Petroleum Production & Exploration Association (Appea) said this week that the test for the government’s newly introduced
Mandatory Code of Conduct would be if it could support the investment that is urgently needed.
The federal government has completed the design of the Mandatory Gas Code of Conduct (Gas Code), placing emphasis on securing additional domestic supply in the short term, and facilitating certainty for investment in new supply.
To ensure that domestic prices are ‘reasonable’ the government has established a price anchor or cap set at A$12/GJ, with a review starting by July 2025.
The full Gas Code will be released in coming weeks once legal drafting has been completed and the Federal Executive Council has ratified the instrument.
Appea CEO Samantha McCulloch said the government’s announcement regarding the finalisation of the design for the Gas Code suggested that the government had taken on-board industry feedback, but said that this would only be confirmed once the final text f the Code was released.
“The number one test will be whether the Code delivers the confidence producers need to make the urgent investment in new gas supply necessary to avert future shortfalls and deliver the reliable and affordable energy needed by all Australians.”
The Australian Competition Consumer Commission (ACCC) have made it clear that new gas production is needed, McCulloch added, pointing out to the ACCC’s forecast potential structural shortfalls as early as 2027 with potential peak shortfalls even sooner.
The ACCC has stated that without expansion in production, it anticipate there would be gas shortfalls that would place continued upward pressure on prices in the domestic gas market, as well as pressure on the electricity market.
“At a time when Australian households and businesses are facing cost-of-living pressures, a range of independent authorities have made it clear that bringing on new gas supply is the key to putting sustained downward pressure on prices and ensuring supply security for manufacturers, power generators and households,” McCulloch said.