New CIS paper: gas supply crisis due to government intervention 

Australia’s looming gas shortages are largely the product of political decisions that have stalled investment, restricted exploration, and driven up energy prices, a new Centre for Independent Studies paper outlines. 

In Politics of Pressure: How government intervention left us short of gas, author Grahame Campbell writes that while private enterprise built Australia into a global LNG powerhouse, successive governments have increasingly imposed bans, price caps, and regulatory uncertainty that have slowed new development and discouraged the capital needed to maintain supply. 

With the east coast facing forecast shortfalls from 2027–28, the paper warns that Australia risks higher household bills, industrial decline, and unreliable electricity as coal generation retires.  

“Industry closures and curtailed operations in sectors such as fertilisers, chemicals, glass, and aluminium already demonstrate the economic costs of scarce and expensive gas,” Campbell says. 

“Energy-intensive manufacturers have been forced to shut down or rely on subsidies to remain viable, while wholesale gas prices have more than tripled since 2015.”  

The paper argues that the very policies intended to protect consumers have made the situation worse.  

“State-based bans on onshore and unconventional gas, protracted approvals, and ad hoc federal interventions — including emergency price caps — have heightened investor risk and delayed new supply,” Campbell says.  

“The new deal between Labor and the Greens excludes gas projects from fast-track approvals — just another sign that gas exploration is being increasingly restricted under Australia’s updated environmental laws. 

“The problem is now plain: a looming supply crunch, surging energy prices and industrial contraction.” 

Campbell points to Western Australia’s long-standing domestic gas reservation policy is highlighted as an example of stable rules that secure affordable local supply without deterring export investment.  

“By contrast, the east coast’s reactive and politically motivated policies are contributing to structural shortages and elevated costs,” he says. 

The paper calls for an urgent policy reset to avoid a scenario of ‘too little, too late’. Key recommendations include: 

• Lifting bans and moratoria on onshore gas exploration, including coal seam gas and fracking
  • Streamlining approval processes to reduce delays and costs

• Introducing a stable domestic gas reservation for future east coast projects 

• Planning strategic infrastructure, including pipelines and storage 

• Recognising gas as a vital transition fuel to complement renewables
    

“Without rapid action, household energy bills will continue to climb, investment will move offshore, and the energy transition will be jeopardised by insufficient firming capacity,” Campbell says. 

“A cooperative partnership between government and private industry is essential to ensure secure, affordable, and reliable gas supply throughout the decarbonisation period.” 

Grahame Campbell served as the Managing Director of CMPS&F – one of the largest engineering and project management groups in Australia – from 1987 to 1995. He is a past president of the Association of Consulting Engineers in Australia and the Australian Pipeline Industry Association, a past member of the Pacific Basin Economic Council and a Fellow of the Royal Society NSW (FRSN).  He is an Honorary Fellow of the Institution of Engineers Australia and holds a Bachelor of Engineering and Master of Engineering Science degrees from the University of New South Wales.