The Queensland government has warned that the proposed Domestic Gas Reservation Scheme contains serious flaws that could stifle future investment, compromise regional jobs, and undermine long-term energy security.
In its submission regarding the federal government’s draft Domestic Gas Reservation Bill 2026, the Queensland government cautioned against an overreliance on reallocating existing domestic reserves rather than incentivising the development of new supply.
While acknowledging recent modifications to the framework, including extended export licence durations and delayed commencement dates for exporter obligations, the state government urged Canberra to ensure any national strategy genuinely encourages ongoing infrastructure growth and production.
The submission requests an independent market review by late 2027 to assess whether legally binding domestic supply obligations should still come into effect on 1 January 2028.
Queensland Treasurer and Minister for Energy David Janetzki voiced concern that the federal goverment has failed to provide sufficient evidence demonstrating that its policy model will secure affordable energy for Australian consumers.
“The federal government has not released the evidence underpinning key elements of the scheme, while critical regulations and implementation details remain unresolved,” Janetzki said.
“A requirement to forcibly supply gas above actual demand could suppress prices below sustainable production costs, weaken investment signals and undermine the new supply needed for long-term affordability.”
Highlighting Queensland’s role in delivering nearly 90 per cent of the east coast market’s supply, Janetzki stressed that the national domestic gas market relies heavily on the state’s resource base.
Queensland’s gas sector invests up to AU$4 billion annually, sustains 44,000 jobs, and is projected to deliver AU$1.9 billion in state royalties during 2026-27.
Janetzki called on the federal government to consult further on supporting regulations and proposed levies, while establishing explicit safeguards for long-standing export contracts and joint venture agreements before moving forward with new legislation.
“While we’re ready to work constructively on a framework that supports domestic users, encourages new supply and protects regional jobs, we can’t sign up to a scheme that leaves Queensland bearing a disproportionate share of the economic impacts.”
