A paradox of plenty: the Australian domestic gas supply regulatory dilemma

Abstract

Energy security is a multi-faceted policy conception heralding from traditional principles focused on security of supply. Onshore conventional and unconventional gas has played an integral role in Australia’s energy security since its commercial production commenced in the Cooper Basin Region in 1969. However, since 2015, the staggering increase in Liquefied Natural Gas (LNG) exports, earning Australia its title as the second-largest global LNG exporter, has heightened competition for gas supply in the Australian East Coast Gas Market (ECGM). This article examines whether the Australian Domestic Supply Mechanism (ADGSM), in imposing controls on LNG exports, marks a shift in regulation and policy by fostering gas security for the ECGM. This article advances the argument that the ADGSM enacted in 2017 is an initial temporary and short-term step in seeking to avert a domestic gas shortfall. Further, it is argued a market-based approach to gas regulation will not achieve domestic gas security for Australia without additional regulatory measures and infrastructure investment.