Why gas prices could rise if government scheme fails because of loopholes | The Business | ABC NEWS

By ABC News (Australia)

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A cross-sector alliance is warning of weaknesses in the government's domestic gas reservation scheme that could be exploited by producers to avoid supplying the local market. The group is seeking amendments to the draft legislation, which they say has been watered down and appears to allow one particular exporter off the hook. Labor's gas reservation policy aims to make LNG exporters set aside gas for local users on the east coast. But the government has since faced lobbying from Santos and is leaving flexibility for producers to supply up to 20 per cent to the domestic market, which experts worry won't increase supply and could push prices higher. Senior fellow of the Energy Program at Grattan Institute, Tony Wood says the minister could allow them to have a lower level of obligation, effectively take advantage of their position. Grattan Institute analysis of ACCC data shows Santos' GLNG is the only Queensland exporter to have consistently taken more gas from the domestic market

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