Article by Samantha McCulloch, courtesy of The Australian.
23.09.2025
The national spotlight on Australia’s lagging productivity and slow and complex approvals processes has highlighted the challenges we face in transforming our energy system.
The nation’s stagnant productivity growth over the past decade is well documented. In the past 10 years, productivity grew by less than a quarter of its 60-year average and our modest economic growth is increasingly being driven by government-dependent sectors, masking sluggish private sector growth.
PM Anthony Albanese has zeroed in on this problem, pledging to facilitate more private sector investment so business can resume its “rightful place as the primary source of growth in our economy”.
Australia’s gas industry is the most productive sector in the economy and a prime example of how private investment can deliver long-term economic returns for all Australians. In its first decade to 2024, Queensland’s LNG industry contributed $127bn to the state economy and supported nearly 60,000 jobs, while unlocking new gas supply that is delivering essential energy for millions of Australian homes and businesses.
Nationally, Australia’s natural gas industry has invested more than $400bn in the past 15 years, but future investment cannot be taken for granted.
A recent report from Wood Mackenzie found Australia is at risk of losing its competitive edge in attracting investment in natural gas exploration and production. While global investment in gas exploration has grown nearly 30 per cent in the past five years, Australia has recorded only 15 per cent.
Australia’s shifting policy and regulatory landscape is a major factor in this declining competitiveness, with a CEO survey of Australian gas producers revealing that 95 per cent had had a project directly impacted by regulatory interventions in the past five years. Of these impacted projects, one in five was cancelled or relocated offshore, and almost half were significantly delayed.
This should set alarm bells ringing, because Australia’s manufacturing, mining, electricity and construction sectors all depend on reliable, affordable gas supply.
The Australian government’s Future Gas Strategy confirmed that natural gas will play a critical role in Australia’s energy mix to 2050 and beyond, and is essential for Australia to reach net zero.
However, the east coast gas market is facing shortfalls from 2028 as a result of years of project approval delays, market interventions and declining investment in new gas supply.
The Australian government’s review of the east coast gas market presents an opportunity to address barriers to new gas supply and investment, and end the cycle of crisis-driven market interventions and temporary fixes.
Australia has enough undeveloped gas to meet our long-term energy needs and remain a reliable energy partner in our region. What is needed is policy certainty and stability for gas producers and users alike.
A well-designed, prospective reservation policy for the east coast that is linked to new supply can be part of the solution.
However, it must be backed by actions to address near-term challenges. Key among these is fixing the broken environmental approvals system that is delaying projects, increasing costs and driving away investment.
Australia doesn’t have to choose between the domestic market and exports. Both are needed for a strong economy and a well-supplied domestic gas market.
Productivity, economic growth and energy security are intrinsically connected. Australia’s gas industry is ready to play its part in Australia’s economic recovery.