Originally published byColin Packham of The Australian.
23.09.2026
Woodside and Chevron have warned the federal government that its concessions around the proposed gas reservation scheme have failed to resolve concerns over investment certainty.
Producers are questioning whether they can commit billions of dollars to projects when ministers retain discretion over how the rules will be applied.
The scheme is one of Labor’s signature and most consequential energy policies, marking a major expansion of government intervention in the gas market as it seeks to guarantee supplies for Australian households and manufacturers while relying on private companies to develop the new production needed to meet future demand.
Woodside chief operating officer Breyden Lonnie told The Australian’s Energy Nation forum on Wednesday that the company could see some positive elements in the government’s revised approach, including provisions that recognised differences between Australia’s east and west-coast gas markets.
But, he said, concerns continued over ministerial discretion, and that long-term energy projects required a level of certainty that could not be guaranteed by the decisions of individual governments or ministers.
“We have seen some positives in terms of others that can make a difference between the west coast and the east coast,” Mr Lonnie told the forum.
“We similarly have some concerns. There are elements around ministerial discretion … that is a concern for us because projects look for certainty. Ministerial discretion does not provide long-term political (certainty).”
Chevron director of operations and maintenance Andrew O’Connor said the issue went to the heart of how major energy projects were financed, as investors were required to commit billions of dollars before projects generated returns.
“Investors look for certainty and predictability,” Mr O’Connor said.
“These take billions of dollars upfront, and then they play out over decades.”
Mr O’Connor said companies needed confidence about how the rules would be applied over the life of a project, which could extend well beyond the tenure of any individual minister.
“What we really need is some predictability in how the rules are going to be applied,” he said.
“These projects and the time horizon that these investments play out … is going to exceed the tenure of any specific minister.”
The warnings expose the central tension in Labor’s gas policy: the government wants greater control over how Australia’s gas resources are allocated to guarantee domestic supply, while the industry says the prospect of government intervention could make investors less willing to commit capital to new production.
The government has been under growing pressure from manufacturers and other large users to ensure Australian gas continues to be available at affordable prices as supplies from existing fields decline.
The government’s response has been to develop a domestic gas reservation mechanism that would require LNG exporters to make a greater proportion of their production available to the Australian market.
The policy represents a significant shift in the operation of the eastern seaboard gas market, where Queensland’s LNG industry has become a major source of both export earnings and domestic supply.
Industry has pushed for changes to the scheme, arguing that excessive intervention could undermine the economics of future projects and ultimately make a domestic gas shortfall more difficult to address.
The government has made concessions during the design of the policy, including changes intended to recognise differences between the east and west coast markets.
But Woodside and Chevron’s comments suggest the industry’s concerns have moved to the way the regime would operate once it is in place.
The question is whether investors can rely on the rules governing a project when those rules may ultimately be subjected to ministerial discretion.
The dispute is likely to intensify as Labor moves towards finalising the scheme, while industry seeks further limits on ministerial discretion and stronger guarantees that the rules will be stable over the life of major projects.