The government’s revised east coast gas plan may not do enough to secure the investment Australia needs in the twilight years of the gas sector.
The best symbol of the inherent complexity in the government’s revised code of conduct for the Australian east coast gas market is the fact that four ministers were party to its announcement on Wednesday.
While the gas price will be capped at $12 per gigajoule as announced last year – a move welcomed by large gas users – Labor has also given some ground to gas producers. Indeed, time is the element that is lost in Labor’s plan – this is a short-term policy for an industry facing important medium- and long-term changes.
The danger Australia faces with the code of conduct and price caps is that it misses out on the round of investment, which Australia will need in a world of constrained energy supply.
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