1 April 2015
Productivity Commission cautions against gas reservation
The Australian Petroleum Production & Exploration Association (Appea) has called for the withdrawal of market interventions such as domestic gas reservation policies, after the Productivity Commission released a report stating that such measures were unlikely to be effective or efficient in the long run.
In its report, titled ‘Examining barriers to more efficient gas markets’, the Productivity Commission cautioned that governments had to be mindful that policies that interfered with market signals could undermine investment incentives, including incentives to bring on new sources of gas supply.
The report also warned that policies designed to accelerate production, such as the use-it-or-lose-it mechanism, had the risk of bringing forward gas production in a way that would reduce community benefits.
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