‘Santos-sized loopholes’: Unlikely alliance urges Labor to change course on gas reservation policy - https://thepoint.com.au/

An environmental group and a fossil fuel industry body have jointly called on the Labor government to tighten gas reservation policy, arguing the current framework contains loopholes large enough for major producers like Santos to exploit. The alliance says the policy, intended to secure domestic gas supply, fails to prevent companies from prioritizing export contracts over domestic commitments.

Where this fits

Australia's electricity transition is being built on the assumption that gas will firm renewable output for decades. That firming only works if gas actually remains available domestically and affordable. This dispute cuts to the heart of whether market mechanisms can reliably deliver the gas backbone the grid depends on. If reservation policy has holes and producers can export freely, the cost of gas for power generation rises, passing through to consumers and to taxpayers funding subsidies. It is also a sovereign risk: reliance on a fuel subject to export manipulation by private companies, with no firm guarantee of supply, is energy insecurity dressed as policy.

What it means

Australia cannot build a renewables-heavy grid without gas as the firming backbone. That strategy only pays if gas stays cheap and available. A reservation policy riddled with loopholes means Australia could face tight, expensive gas precisely when the grid most needs it. The structural problem runs deeper: weather-dependent generation and gas firming, together, cost more than a firm, dispatchable alternative like nuclear would cost over the same period. But nuclear is banned by law. So the grid must rely on gas, must keep gas cheap, and must have policy tools that actually work. This report suggests they do not.