The federal government’s proposed domestic gas reservation scheme has drawn sharp criticism from Seven Group chairman Ryan Stokes, who warned it could harm Australia’s gas industry and undermine long-term energy security. The plan, put forward by Energy Minister Chris Bowen, aims to require liquefied natural gas (LNG) exporters to set aside 20 percent of their exportable gas for domestic buyers.

Stokes, whose company operates as both a significant producer and purchaser within the Australian gas market, argued that the policy would deliver only temporary price relief to foreign-owned manufacturers, while ultimately reducing the reliability of the country’s gas supply. He cautioned that mandating LNG exporters to reserve gas for local consumers does not increase overall domestic supply but merely reallocates existing resources.

Highlighting the potential consequences, Stokes said the government's approach might create a "two-speed market," forcing LNG exporters into the role of compelled sellers. This, he contended, could marginalize independent domestic gas producers by eliminating their commercial viability, potentially weakening the broader gas sector.

Rather than calling for outright repeal of the scheme, Seven Group has recommended that the government redesign the policy to activate reservation requirements only during genuine domestic supply shortages. Stokes emphasized the need for flexibility in the plan to avoid unintended market distortions and to balance short-term affordability with Australia's long-term energy security.

The government has pursued the reservation scheme as a measure to address concerns about rising gas prices and secure supply for Australian manufacturers amid growing global demand. Supporters argue that prioritizing domestic needs will help stabilise prices and ensure industries reliant on gas have adequate access to fuel. However, critics like Stokes warn that the policy could discourage investment and production, ultimately compromising supply reliability over time.

As the debate continues, stakeholders from various sectors remain divided on how best to balance the competing interests of export markets and domestic energy users while safeguarding Australia's energy future.