Australia is on the brink of an energy crisis, and it’s not just about gas—it’s about the chaotic policies that are driving us toward the world’s most expensive energy. But here’s where it gets controversial: while the East Coast gas supply issue is often blamed on a lack of competition, the real culprit is the unchecked monopoly in energy policymaking. Without anyone to hold leaders accountable, we’re left with half-baked solutions that only deepen the chaos.
Take Prime Minister Albanese’s gas reservation policy, for example. It’s so vague and poorly thought out that states and regulators are scrambling to make sense of it, let alone implement it. Meanwhile, the Australian Energy Market Operator (AEMO) and the Victorian government are crafting emergency powers that would allow them to seize gas supplies during shortages. And this is the part most people miss: this move has sparked outrage not just from gas exporters but also pipeline operators, who argue it distorts market incentives and undermines investment.
As Australian Pipelines and Gas Association CEO Steve Davies pointed out, ‘Governments claim to favor market-led outcomes but keep intervening, often in ways that make no economic sense.’ The result? A policy mess that lacks basic economic principles, market understanding, or a clear national interest.
To be fair, VIC and the AEMO are resorting to emergency measures because structural fixes are beyond federal reach. But let’s not forget the last election, when the opposition proposed a well-crafted gas policy that Albanese dismissed as amateurish. Now, his own solution is so convoluted that panic is setting in. Here’s the kicker: despite this chaos, Australia’s luck might turn. A global gas glut is heading our way, promising lower prices for Asia—and potentially Australia.
Goldman Sachs predicts that by 2028/29, Asian gas prices could drop to AUD6.50, with Queensland’s net-back price falling to $5GJ within three years. This oversupply could even lead to temporary US LNG export cuts, balancing the market. But here’s the catch: to bring these lower prices to Australia, all we need is the existing Australian Domestic Gas Security Mechanism (ADGSM), which penalizes cartels for failing to meet benchmarks. Instead, Albanese is proposing to scrap it in favor of his failing reservation policy, while ignoring critical pipeline expansions like the $2bn APA proposal—a move that could reduce CPI by 5%.
Bold question for you: Is this a case of ideological stubbornness, or a genuine misunderstanding of energy economics? Labor’s current path risks delivering the world’s costliest energy to Australians. What do you think—is there a better way forward? Let’s debate this in the comments.
