Gas at a crossroads: APGA and energy producers urge fast-tracked reforms to secure Australia's energy future
Jamie Wade
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The Australian Pipeline and Gas Association (APGA) has welcomed recent improvements in the east-coast gas system but has warned that deeper, bipartisan policy reform is necessary to prevent long-term supply shortfalls and ensure a sustainable energy future.
The latest Gas Statement of Opportunities (GSOO) for 2025 highlights that over the next decade, every gas supply and infrastructure project must progress as planned—including firm commitments from LNG exporters to supply southern markets in winter—to avoid major energy shortages. While recent midstream gas sector announcements have provided temporary relief, APGA warns that without decisive action, long-term stability remains at risk.
GSOO Reinforces the Need to Fast-Track Gas Supply
The Australian Energy Market Operator’s (AEMO) latest GSOO report reaffirms the urgency of fast-tracking new gas supply, with the improved supply-demand outlook deferring forecast seasonal and structural shortfalls by a year.
Australian Energy Producers chief executive Samantha McCulloch stated that while progress has been made, there is no room for complacency, as AEMO has warned that “all scenarios identify the need for new supply investments to maintain supply adequacy.”
“The GSOO makes clear that governments and regulators must work with industry to remove regulatory barriers to new gas supply and investment to avoid shortfalls,” McCulloch said.
Structural Reform Needed to Avoid Economic Instability
APGA chief executive Steve Davies emphasised the importance of immediate structural reform, highlighting the impact of uncertainty on industrial gas consumption. Between 2018 and 2024, industrial gas use fell nearly 20 percent, from approximately 280 petajoules (PJ) to 227 PJ. This decline has coincided with the loss of manufacturers and industrial operations, affecting jobs, investment, and broader economic growth.
“Governments and industry are constructively working together to improve east-coast gas supply, but only bipartisan policy can deliver long-term stability for gas transmission and downstream users,” Davies said.
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Gas-Powered Generation Critical Amid Coal Closures
The GSOO also underscores the increased reliance on gas-powered generation following scheduled coal plant closures at Eraring in 2027 and Yallourn in 2028. According to APGA, without clear policy direction to bring 13 gigawatts (GW) of new gas-powered capacity online, Australia risks facing higher energy costs, extended coal generation, and greater instability in electricity supply.
Australian Energy Producers highlighted the role of gas in energy security, with AEMO chief executive Daniel Westerman stating, “Flexible gas-powered generation will remain the ultimate backstop in a high-renewable power system.”
AEMO’s projections show that annual gas demand for power generation could more than double between 2025 and 2044, with peak day gas demand for electricity almost quadrupling to support renewable energy sources.
Government Action Required to Support Gas Market Stability
The GSOO report emphasises that accelerating gas projects could significantly defer structural shortfalls, with uncertain southern supply developments potentially delaying annual supply gaps to 2034.
While recent investments, such as the $350 million Gippsland Joint Venture expansion by Woodside Energy and Esso Australia, have improved short-term supply conditions, further projects must be fast-tracked to secure long-term stability.
McCulloch stressed the need for immediate action, noting that while 2028 may seem distant, the long lead time for major energy projects necessitates urgent government intervention to guarantee reliable and affordable energy for Australian homes and businesses.
APGA has acknowledged the work of the Energy and Climate Change Ministerial Council in addressing immediate challenges but stresses the need for a comprehensive, long-term policy framework. The association continues to work with state and federal governments to ensure that all planned and anticipated gas projects proceed on schedule to prevent future disruptions.
As Australia faces growing global energy uncertainty, APGA and Australian Energy Producers urge policymakers to prioritise reforms that strengthen domestic gas supply security, support industrial competitiveness, and promote economic stability.