KIERAN GILBERT: Welcome back to the program. Joining me live in the studio is the Resources Minister Madeleine King. Minister, thanks for your time. You said in your news conference earlier today that the ACCC report is damning. No doubt about it. What was the industry behaviour that you’re most concerned about when it comes to the gas sector?

MADELEINE KING: Thanks, Kieran. I mean, what the ACCC have foreshadowed is a significant shortfall in gas supply in 2023. And what that report highlights is a number of activities being undertaken by the three producers on Curtis Island in Gladstone that are probably, from outside looking in, not up to scratch and not meeting community expectations. There’s a heads of agreement that the former Prime Minister Scott Morrison signed with the three producers that had an agreement to supply the domestic market before selling off gas into what they call spot price cargos, which are expensive at the moment because of the illegal war in Ukraine. So, what we have seen and what the ACCC report talks to, is that some of those offers of gas into the domestic market were not – well, they didn’t and appear genuine. They’re either too large a volume or they’re too short a notice and no one can actually take them up, or the price is too high. They’re just prohibitive.

KIERAN GILBERT: They were not honouring the spirit of it?

MADELEINE KING: Well, that’s language that’s been used. And that would be a fair assessment. And, you know, there may be reasons for that, and the gas producers will have a good opportunity to explain themselves.

KIERAN GILBERT: Do you think the gas giants deliberately manipulated the market to push up prices?

MADELEINE KING: No, I don’t think that at all. I think prices have been pushed up because of many things out of our control and certainly out of their control. I mean, there’s a gas supply crunch around the world, and we can’t underestimate just how big an event that is. The war in Ukraine has led to gas from Russia being cut off to most of Europe and even Japan is seeing – having trouble with its supply out of Russia. And that’s bad for a country like Japan that depends on the import of much of its fuel, particularly LNG. And we’re a very trusted partner with our good friends in Japan, and we don’t want to do anything to disturb that relationship. But also, we’ve got to prioritise, you know, the Australian domestic gas suppliers.

KIERAN GILBERT: Well, it sounds to me that you do want to cooperate with the industry.

MADELEINE KING: Yeah.

KIERAN GILBERT: You even said that “trigger” is not your preferred form of language. But if they’re not honouring the heads of agreement, then you’re left with little choice, aren’t you?

MADELEINE KING: Mmm-hmm.

KIERAN GILBERT: And if you’re going to divert the export gas that these companies were going to export, uncontracted gas, and divert that to domestic use. If they don’t show goodwill, you’re left with no choice, are you?

MADELEINE KING: Well, well, that’s right. But I’m sure there is goodwill. And what we’ve seen in the recent crisis and domestic supply crunches is, when asked, those facilities or some of them have managed to turn their production – turn it up so they produce more gas, and also focus on getting more of it into domestic supply given the colder winter we’ve had, the pressure there’s been on coal supplies through, again, unpredictable events like flooding in certain mines and unexpected and unplanned for closures. So, I’m really keen to work with the gas companies, those producers. And, you know, I’m happy with an industry-led response. I just want one that works.

KIERAN GILBERT: One that works. And, I guess, one that is honouring this social licence. As you used those words, the social licence that companies have to honour when using Australian resources. And I guess the point I look to is that in WA, your home state, prices are much lower in WA where there’s a domestic gas reservation than there is on the eastern seaboard. Isn’t that in itself damning of the industry?

MADELEINE KING: Well, social licence is different from, you know, what you think, where you see it, where you stand. It does adjust. So, the thing is if you work for the gas companies and they’ve provided your livelihood, you’ve been involved in construction or you’re in the ongoing operations, obviously, you’re keen to be a supporter of that industry. And then there are others that are very distant from the gas industry that think there is a deficit in that social licence. So, I think it’s important to try and bring that gap – you know, to make it much smaller. And part of that is an effort that the gas industry has to do itself. In respect of Western Australia, you know, the gas reservation policy from many years ago was hard fought at the time and it was fought against. You know, Alan Carpenter, the Premier had a big struggle to get that in, but we are now reaping the benefits of that. But we also don’t have a fully privatised power system. So, you know there’s other factors in WA’s success and in keeping the power prices low with gas that is not the same on the east coast, which is mostly a privatised system.

KIERAN GILBERT: Can you reverse engineer something like a –

MADELEINE KING: Very difficult. It is very difficult to reverse engineer a reservation, especially when you’ve got multiple jurisdictions involved, different states. So, then you have constitutional issues. So rather than overcomplicate matters, my very firm focus is on the heads of agreement and making sure we can get an industry-led agreement that is better than the last one, that is adhered to, that makes sure that uncontracted gas – so it doesn’t interfere with international contracts – make sure that that uncontracted gas is made available properly and reasonably at a reasonably acceptable price to the local market.

KIERAN GILBERT: Yeah, well, the industry says there’s enough, there’s a surplus of gas.

MADELEINE KING: Yes.

KIERAN GILBERT: Now they’ve got a heads up they’ll act. That’s what the industry association says.

MADELEINE KING: Yes.

KIERAN GILBERT: Why did they have to be told to act? Why didn’t they do it?

MADELEINE KING: That’s a very good question. And that’s what most Australians think. Why do we need to get to this point?

KIERAN GILBERT: So, will you ask them that’s well?

MADELEINE KING: Well, we have been talking about it for some time. And it’s not the first time the ACCC have predicted a shortfall. It’s just the first time it’s of this magnitude, which is about 10 per cent of the east coast supply. So, I think it is regrettable that you have to wait for it to be a crunch and this kind of report to come out for minds to be focused on this problem. But, nonetheless, that’s what we face. But, you know, I do want to acknowledge that a couple of the production facilities do provide a lot of domestic gas into the market, and they should be congratulated for that. Obviously, many would think, well, that’s the least they could do, and that’s fair enough. But the truth is we wouldn’t have access to any of the gas out of the Queensland facilities were it not for international investment and the long-term contracts that make these plants a reality.

KIERAN GILBERT: It would be more helpful in Victoria and New South Wales extract more gas as well, wouldn’t it? If they lift their moratorium?

MADELEINE KING: Well, that is a matter for those two state governments. And, as I said before, I’m not here to, you know, hack into them. They will have to make their own decisions about domestic gas and energy security. And that’s what they’re doing. So, you know, I’m more than happy to work with them.

KIERAN GILBERT: They’re willing to put the boot in to producers for exporting –

MADELEINE KING: Yes, I know.

KIERAN GILBERT: And yet they’re not extracting themselves.

MADELEINE KING: Yeah, I think sometimes there’s misunderstandings about what it takes to build LNG facilities. And it’s tens upon tens of billions of dollars. You know, it’s not small fry. It’s not something Australia can pay for on its own or even has the consumption capacity to have in existence. So, we do need to respect our international partners that have put money on the table, capital on the table, have built these facilities, helped develop the technology that can extract this gas. This is the first-time coal seam gas has turned into LNG. You know, it’s amazing what they’ve achieved in North Queensland in Gladstone. So, I think my main aim is to work together to make sure Australians have a proper domestic gas supply.

KIERAN GILBERT: Madeleine King, thanks for your time. I appreciate it.

MADELEINE KING: Pleasure, thank you.

ENDS