Submit your feedback: Published response
Published name
Should the ADGSM:
Describe your suggested alternative mechanism or policy in less than 150 words.
LNG exporters in the eastern and southern gas markets must be legally obligated to a gas reservation policy. Furthermore, the gas reservation policy must be executed with the extension of storage capacity that will enable the government to release gas on a needs basis and to stabilise prices in times of high demand. The ADGSM, in its current form, should not be extended. It will never be used and if it is used, it may lead to claims of indirect expropriation in violation of Australia's international investment agreements.
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13 July 2022
Australian Government
Department of Industry, Science & Resources (DISR)
Industry House, 10 Binara Street, Canberra ACT 2601.
Re: Submission in Response to the proposed extension of the ADGSM to 2030
Thank you for the opportunity to make this submission. I wish to make the following three points:
1) The ADGSM should not be extended in its current form because it uses supply as
the trigger, while the recent energy crisis involves high gas prices. If triggered, the
ADGSM takes too long to become effective and may even be counter-productive
since it may expose Australia to expensive Investor – State Dispute Settlement
(ISDS) claims on the basis of indirect expropriation. The ADGSM, in its current form,
has served its purpose and now it is time to replace it. The ADGSM should be
replaced with a domestic gas reservation model similar to the one used in Western
Australia. Before its adoption, however, the gas reservation model must carefully be
adjusted according to economic realities within the Eastern and Southern gas
markets.
2) If the ADGSM is allowed to continue in its current form to 2030, there is a high
likelihood that it will never be used because using it may amount to indirect
expropriation. The gas companies in Australia are foreign owned (95.7% according
to a report by the Australia Institute) and operate within Australia with the specific
purpose of extracting and exporting gas to overseas markets. Any interference with
the ability to export gas may potentially amount to indirect expropriation. Since large
volumes of Liquified Natural Gas (LNG) is already locked in long term gas supply
contracts, triggering the ADGSM may be looked upon as interference with the rights
of the LNG exporters, thereby exposing Australia to ISDS claims.
3) The Australian Government must ensure that LNG exporters and foreign owned gas
companies acknowledge their larger Social Licence to Operate (SLO) owed to the
people of Australia. The specific SLO obligations should not be limited to resource
conservation, social and environmental compulsions only, but should also be
extended to the supply of cheap and affordable gas to the people of Australia. It is
appalling that Australian gas consumers pay significantly high price for a resource
that belongs to them. The extended SLO with regards to price should be enshrined
within any successor regime to the ADGSM. Furthermore, the relevant government
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agencies and departments should work towards enhancing domestic gas storage
capacity in order to facilitate the adoption of a gas reservation model.
It is hoped that the above submission is useful in securing Australia’s national interest and energy security. The author is available to assist the DISR or further discuss any aspect of this submission.
Dr Umair Ghori
LLB (Hons), LLM, PhD
Associate Professor, Faculty of Law,
Bond University, ROBINA QLD 4229
E-mail: ughori@bond.edu.au
Phone: 07 5595 1286