Not only are we waiting with baited breath for the results of the government's review in the issues facing the stretched supply and demand conundrum, but we've this week seen not one but two acreage releases.

The first came on Wednesday when the Victorian state government announced its first petroleum acreage release in seven years – a move which was warmly welcomed by the gas industry's peak body group Australian Energy Producers (AEP).  

With Bass Strait production falling and industrial gas demand remaining stubbornly high, the pressure's been on the government to look at reopening the door to exploration. So the announcement of the launch of a tenders process for two petroleum exploration permits in state waters in the Otway and Gippsland basins will look to ease that thumbscrew.

And then if that wasn't enough, yesterday came the news that the federal government would be opening up five new areas for offshore gas exploration in Commonwealth waters in the Otway Basin.

"Exploration and new discoveries will play an important role in underpinning our energy needs and support Australian industry and households as we meet our net zero commitments," Minister King said.

These two announcements obviously follow warnings from the Australian Energy Market Operator (AEMO) and the Australian Competition and Consumer Commission (ACCC) forecasting structural gas shortfalls from 2029 which have been reported ad infinitum.

But they also come just days before the expected announcement of government intervention in the strained east coast gas market, most likely a domestic reservation policy.

While Santos – who not only are allowed to service export contracts first but also are allowed to buy gas from the domestic market to do so – might beg to differ, it would appear the gas industry is broadly in agreement with the notion of a gas reservation policy. And so, with meetings being held in Canberra this week, we can expect that to be announced before Christmas.

There's even talk the government might go further and bulk buy gas from the producers to ensure consumers have a ready and reasonably priced supply. That idea is more controversial but at this late stage – with energy bills rocketing and little actual production coming online to ease the situation – all options should be on the table.

Talking of tables, I'm spending this weekend planning how much and of what I'm going to eat over Christmas. With that in mind, just a note to say the last newsletter of 2025 will go out on 23 December and the first of 2026 will go out on 5 January.

Now, is it too much to have 12 pigs in blankets all to myself?

Yours,

Russell Yeo