War in the Middle East will likely increase global energy prices and presents significant implications for Australians and the Australian economy. This paper finds that Australian Government choices will determine how hard the price spike hits Australian households, how huge gas export company profits are and how much tax revenue Australia will collect.

Recent economic modelling on the impacts of a 25% gas export tax has been quickly and fully embraced by the fossil-fuel companies, and other lobby groups. This analysis of the modelling finds that it is mostly irrelevant to the gas industry in Australia in modelling a gas project that doesn’t exist.

This paper outlines how unlimited gas exports over the past decade have increased energy prices for Australians and raised little money for the public. The Australian Government’s response is a ‘gas reservation scheme’. The paper finds that the proposal in December’s Gas market review report (GMR) report looks unlikely to fix gas policy.

Given the long term challenges and opportunities facing Australia’s gas markets, this review was established as a first principles examination of current policy and regulatory settings. The central conclusion of the Review is that current policy settings need to evolve to better address the long term, structural challenges facing Australian gas markets.

The Australian Government has accepted that gas exports are causing supply shortages and raising energy prices for Australians. This paper examines two policy options reportedly considered by the Government that would favour rival gas companies, and that may or may not be effective in reducing gas prices for some users.