The union's submission would require gas exporters to supply a reasonable share of gas to the domestic market before being granted permission to export. Critically, the AWU's proposal would apply to existing gas fields (unlike gas exporter proposals which would only apply to potential new gas projects). However, the union's proposal would not interfere with existing export contracts, and would instead focus on how producers use additional gas resources beyond what's needed for their international commitments.
AWU National Secretary Paul Farrow said the time for half-measures was over.
"Because of a series of weak and stupid decisions by Australian governments during the late 2000s and early 2010s foreign gas giants operating here have been gifted the sweetest deal out of anywhere in the world," Mr Farrow said.
"They've been able to pump our gas out of the ground and simply flog it to the highest foreign bidder without restriction. These multinationals should be kissing the boots of every Australian taxpayer for the run they've had over the last ten years. But it's time for a fairer deal."
The AWU's submission reveals that despite Australia producing more than four times the gas it needs domestically, manufacturers are facing crippling prices that have risen from under $5 per gigajoule before 2015 to between $10-20 today. The union notes that recent polling shows 86% of Australians support an east coast gas reservation.
Mr Farrow dismissed threats from gas companies that they would abandon Australian operations if regulations were tightened.
"The idea they'll pack up and leave if we tighten the rules is a bluff. Why would they walk away from billions in profits? Of course they'll cry wolf - I'd cry wolf too if I was dealing with a patsy like Australia who has fallen for it every time," he said.
"The government's job is to stand firm and make sure Australians get a fair return, not cave to empty threats. I represent workers in the gas extraction industry and I unashamedly support the industry's future in Australia. These workers are my members. I don't want them to lose their jobs, and I know they won't."
The submission particularly targets GLNG's practice of purchasing up to 126 petajoules of third-party gas annually – equivalent to 27% of total east coast demand – to meet export commitments despite controlling sufficient reserves of its own.
The AWU's proposal includes several key mechanisms:
- A requirement for LNG exporters to supply a fair portion of domestic demand
- Rules deducting third-party gas purchases from LNG exporters' local supply commitments - ensuring they don't rob Peter to pay Paul
- A 'baseline-credit' system, allowing producers who exceed their domestic supply obligation to trade credits with those that fall behind
- Powers for government to set prices for industrial users if market dynamics threaten manufacturing viability
Under this proposal, GLNG would have to develop its underused reserves for the domestic market, buy credits to cover its domestic supply shortfall, or divert export production to the local market - covering its export contract with gas from the international market.
"My members in manufacturing need affordable gas not just for energy, but as a feedstock for many important industrial processes. And they're wondering: why am I sitting in a country that has more natural gas than anyone else and yet I'm hearing my employer might have to shut because they can't get access to affordable gas?" Mr Farrow said.
The AWU notes that Western Australia has successfully operated a gas reservation scheme since 2006, delivering gas at around $7 per gigajoule while still supporting a thriving LNG export industry. The union argues a similar model can work for the east coast without threatening the viability of gas exports or existing contracts.
The submission marks ten years of AWU advocacy for a gas reservation and comes as major manufacturers including Oceania Glass and Qenos have already closed their doors, with many more warning they are on the brink due to unsustainable gas prices.
