Calls for a moratorium on new LNG developments or the reservation of a proportion of gas for domestic consumption are pleas for protectionism. They will lead to distorted price signals, inefficient industries, lower investment and, ultimately, higher prices.
The report examines the creation of an east coast gas export market ? which will join with Western Australian exports to produce an estimated $50 billion-a-year industry by 2017 ? and Australia?s role in a gas revolution created by surging demand in Asia and new discoveries of shale gas in the United States.
The report also examines Australia?s possible shortage of supply, arguing that government must resolve the impasse over coal seam gas in New South Wales, while industry must ensure that enough infrastructure is built to ensure that gas flows. Governments should also move to create a more transparent and competitive market by accelerating the development of gas trading hubs, introducing a published price index, freeing up trading in pipeline capacity and more tightly constraining joint marketing arrangements by gas producers. For three decades, Australia has thrived from opening trade and removing protection. It should not turn the other way now.