15 March 2017

Time for export controls on gas?

The Prime Minister will be meeting with east coast gas producers this afternoon to try to thrash out some sort of arrangement to ensure adequate gas supplies for the domestic market.

The fact is, the Commonwealth holds all the cards if it has the spine to play them. It could have export controls on gas in place by the time the meeting starts, simply by using the Customs Regulations to place gas under export controls. Gas would become a prohibited export, unless the exporter had permission in writing from the Minister. It would then be up to the relevant Minister to grant to each producer permission to export part or all of its gas. Permission could be given shipment by shipment, or yearly, or monthly, as the situation warrants. The intent would be to grandfather most if not all current arrangements, but the matter would be firmly and clearly under Commonwealth control.

The use of the trade and commerce power in this way is very flexible, and it has been thoroughly tested in the High Court (see Murphyores Pty Ltd vs Commonwealth 1976).

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