Gas fears allayed as production ramps up

In its latest report on the state of the gas market, the Australian Competition and Consumer Commission has found that, even if all uncontracted gas is exported, there will still be an east coast surplus of 1.4 petajoules (equivalent to about the energy used by 30,000 homes in a year).

The findings mark an improvement in the outlook from June, when the ACCC warned the southern states were likely to face a winter shortfall and would rely on gas shipments from Queensland to meet demand.

At the time, the regulator warned the gas supply to the eastern states was "finely balanced".

But in its latest assessment, the ACCC says that not only is there sufficient supply to exceed current domestic demand but expects production in the first quarter of 2024 to be 5.9 petajoules greater than forecast in June - a 13 per cent increase on where it was in March quarter of this year.

International demand for energy is surging, and gas exports are projected to increase by 8.2 petajoules in the first three months of next year, delivering a $2 billion revenue boost to exporters.

While concerns abut gas supply have eased, households are still being hit by bigger gas bills.

Gas charges surged more than 13 per cent in the year to July and electricity prices, which partly reflect the cost of gas, were up 15.7 per cent over the same period.

But the Australian Bureau of Statistics said the bill shock for households would have been even greater without federal, state and territory government policies like the Energy Bill Relief Fund.

The ABS said without the rebates, electricity prices would have jumped more than 19 per cent in July.

Treasurer Jim Chalmers said the ACCC report showed that government action, including the Gas Code - which sets a $12 gigajoule price cap - was working.

"Our Energy Price Relief Plan is deliberately designed to deliver better, fairer prices for Australian consumers at the same time as we honour our trusted role as an energy supplier," Dr Chalmers said.

"It's really pleasing to see more evidence that it is working as we intended."

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But Australia's ongoing production and export of gas is controversial, with many environmentalists claiming it is at odds with international commitments to achieve net zero by 2025.

Environment Minister Tanya Plibersek is facing legal action over her decision to approve or extend a slew of cola and gas projects in Queensland.

But Dr Chalmers said gas was an important part of the nation's energy and export mix.

"The strength of Australia's economy relies on resources and that will continue to be the case long into the future," the treasurer said.

"Gas will play a crucial role in the defining decade ahead as we look to deepen and broaden our industrial capacity and make the most of the transformation to cleaner, cheaper energy."