The " Reserve " Question.

There is concern that the growing demand for natural gas on world markets is eroding the quantity available for Australian use as gas miners seek long term supply contracts at ever rising prices. There are calls for a proportion of this Australian product be "reserved " to guarantee the local gas market.

There is no doubt that we would face financial disaster if the supply of gas to industry faced a supply interruption.  A huge number of jobs depend on it.  A lot depends on just what we mean when we talk of a "gas reserve ".    To some people that applies to insulating a given quantity of gas production from becoming available for export - and for others it means freezing the price Australians pay for gas at a point below what it can bring on the open market.

This whole gas question is complex because gas is a very divided market.  Australia is fortunate to have giant pockets of natural gas both inland and offshore in various states, and at the same time there is another source directly under our feet which has only been discovered in recent times - and that raises the "fracking "question.

Tapping these huge gas pockets is a costly operation and getting it to where it can be used or sent to export involves a mix of gas pipelines and terminal hubs, and that can run into very big money. The firms involved only commit those funds on the expectation of a growing market and rising prices which will return them a profit.   If the gas produced is to be subjected to export limitations and a form of price control, that should have been part of the agreement when exploration licenses were granted.

If "Gas Reserves "are to be part of our gas strategy they must become an integral part of all new gas ventures - and they will be costed in accordingly when financing decisions are being made.  They may cause some investors to withdraw, but provided sensible limits apply there is no reason that they should harm this growing industry.   Such limits apply in some other countries which continue to expand gas exploration and collection.

There is a school of thought that wants to reserve local supply to the fracking option - which is opposed by many people.  It seems that there is plenty of gas in the ground beneath out feet and this can be collected by drilling wells and extracting the gas tapped in shale deposits by pumping liquids under pressure to cause the rock to fracture - and release the gas.  When this method was discovered and put into practice in the United States it certainly caused some problems.  A film called "Gasland "
depicted tainted water wells and bath water catching fire from gas contamination - and frightened the Australian public.  There is a serious "anti fracking " sentiment amongst a significant number of people.

The gas industry contends that fracking is now safer and that horizontal drilling has sharply reduced the number and distance of the gas wells needed to supply our needs.   Some people contend that gas from fracking should be a prohibited export and reserved for local use, and only tapped by a government instrumentality to quarantine it's price from the world pricing regimen.

Basically, this issue should be part of a broader question.  We are fortunate to people an entire continent which is rich in natural resources.   Surely the provision of our own needs should take precedence over exports - and that covers all aspects of industry - including food.   We are a major food exporter and it would be unthinkable if Australians were to starve because foreigners who owned our farms sent the bounty we produce to the export market.

At the moment, gas is at the top of the list and there is a real danger that high world prices and a voracious demand may cripple Australian industry and impoverish Australian families.  It would be reasonable to implement safeguards to guarantee the gas sufficient to meet our needs is not siphoned off to export - and that sanity prevails in it's pricing.