COAG ENERGY COUNCIL
STATEMENT
ACCC EAST COAST GAS INQUIRY
BULLETIN ONE / 22 APRIL 2016
THE COAG ENERGY COUNCIL WELCOMES THE RELEASE OF THE
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC)
INQUIRY INTO THE EASTERN AUSTRALIAN GAS MARKET
The ACCC’s Eastern Australian Wholesale Gas Market Inquiry was initiated by the
Commonwealth Minister for Small Business and then Minister for Industry and Science on
13 April 2015, to provide further direction to important gas sector reform.
The final Inquiry Report of the ACCC was publicly released today, providing wide-ranging
insights into market structure and competition issues in the Eastern Australian wholesale
natural gas market.
Energy Ministers have placed a priority on reforms in the gas sector over the last two years and
see the ACCC’s inquiry, accessing detailed confidential information, as an important
opportunity to test and refine the actions it is taking in pursuit of its vision for the Australian gas
sector.
The inquiry considered wholesale gas prices in the context of Eastern Australia’s gas
production, processing, transport and storage and marketing segments of the gas industry, in
the context of a rapidly changing market.
Energy Ministers received a detailed briefing from ACCC Chairman Rod Sims on 21 April 2016,
and noted that the Council’s existing gas market and supply reform agenda is largely consistent
with many of the issues identified by the ACCC. In particular the three themes in the inquiry of:

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the three factors that have all contributed to increases in supply prices, in Eastern
Australia:
the changing landscape of the Eastern Australian gas market, including the lack of
competitive supply;
the current depression in oil prices; and
moratoria
the effect of monopoly pricing of pipeline capacity and the need to strengthen the pipeline
access regime to deliver efficient outcomes for the pipeline transport market; and
the growing importance of risk management mechanisms and issues relating to market
information and transparency.
The Council’s Australian Gas Market Vision, released in December 2014, provides the focus for
its work on enabling responsible gas supply and improving the functioning of Australian gas
markets. This work is well underway.
At their 21 April 2016 meeting Energy Ministers also received a briefing from Australian Energy
Market Commission (AEMC) Chairman John Pierce, regarding the AEMC’s Eastern Australian
Wholesale Gas Market and Pipeline Frameworks Review. Due to report to the Council in May
2016, this review will recommend specific improvements to the function of gas trading markets,
access to pipeline capacity and the availability of transparent market information.
The ACCC and AEMC have been working closely together and the AEMC Review final report
will be further informed by the findings of the ACCC.
The ACCC findings on the importance of increasing gas supply and suppliers lend further
weight to the work already underway by the Council on supply-side matters. The ACCC rightly
notes that even the best-designed trading markets will falter without gas to trade, and
competition is essential to improving consumer outcomes.
Supply regulation is primarily a state and territory matter, however it is clear from the work of
the ACCC that market effects are cross-jurisdictional. This highlights the important role of the
Council’s Gas Supply Strategy – a commitment made in December 2015 by all State and
Territory governments to work together to improve collective understanding of the issues
associated with onshore gas development.
Commonwealth, State and Territory officials continue to work closely on the development of an
implementation plan to be considered by the Council in mid-2016.
The Energy Council welcomes the ACCC findings and will consider the report in conjunction
with the work of the AEMC before making a more detailed response on opportunities to
improve its reform program at its next meeting.
coagenergycouncil.gov.au
Secretariat
GPO Box 9839, Canberra ACT 2601
Telephone: (02) 6243 7788
[email protected]