Woodside Energy Denies Withholding Gas Supply Amid Complaints From Consumer Groups and Politicians

Safety flares are shown at the Woodside operated North West Shelf Gas Venture in Western Australia, on June 17, 2008. Greg Wood/AFP via Getty Images

Australian leading oil and gas producer Woodside has said the company is not withholding gas supply from the market amid accusations from consumer groups and politicians.

In an interview with ABC radio, Woodside executive vice president Mark Abbottsford dismissed the idea that his company is holding back supply from the market.

“We don’t have any available supply that we are holding back,” he said.

“We are putting every molecule we possibly can into the market. And we are not only doing that today, but we are also looking to in the medium and longer term.”

Consumer Groups Accuse Producers of Withholding Gas

Previously, consumer groups had complained that gas producers were acting like bullies as they refused to supply gas to retailers.

“The gas industry is still behaving like a bunch of bullies and effectively looking like they’re withholding supply,” said Andrew Richards, CEO of the Energy Users Association of Australia, as he gave the example of a large gas customer failing to receive an offer five times.

“You would only withhold supply if you had market power.”

This comes as households on Australia’s east coast are expected to see a sharp increase in their gas bills from February, with major retailers lifting their prices by 20 percent on average.

Woodside's Cossack Pioneer oil production facility off the northwest coast of Australia. AFP via Getty Images

While Abbottsford agreed that the current prices were high for consumers, he said there were many factors involved, including producers, wholesalers, distribution and the entire industry.

“The thing that we can do to alleviate that as a producer is to get additional supply into the market,” he said.

At the same time, Abbottsford said his company wanted to see a sustainable level of prices in the gas market as it would provide more certainty for investment directions.

However, he was also concerned that the 12-month price cap implemented by the Labor government would curb the gas supply and create a second set of problems.

Government Defends Price Caps

Despite the steep price increases to fall on consumers’ shoulders in February, Energy Minister Chris Bowen said the government’s policy was not backfiring as it would take some time for the price cap to flow through the retail prices.

“The alternative was just to let the profits rip, to let the wartime profits continue, to make Australians pay international prices for Australian gas in Australian soil,” he told ABC radio.

“We won’t let that happen. We haven’t let that happen. And the changes that we put into place last year are still flowing through the system.”

In addition, Bowen stated that the government’s analysis of gas price drops in 2023 and 2024 would still hold.

“We made it clear at the time that our intervention would see the first-year price come down for us from 20 to 18 (percent), and the second-year price come down from 20 to four percent,” he said.

“And that analysis holds. And you’re going to see, as we always said, a little bit of time for the wholesale price cap to flow through to retail prices.”

Chris Bowen, Labor Party's minister for energy and climate change, speaks to the media during a press conference at Parliament House in Canberra, Australia, on June 16, 2022. AAP Image/Lukas Coch

The minister also said that Australian industries would have closed this year due to the high gas prices if the government did not take action.

On another political spectrum, Opposition Leader Peter Dutton reiterated that price caps didn’t work.

“Otherwise, we'd say every time you get a spike in the price of watermelon, which we saw over Christmas, that you cap the price of watermelon or cap the price of any commodity,” he said.

“All it’s resulted in is an increase in prices and greater uncertainty about the stability in the market.”

Meanwhile, the Greens party has called on the federal government to quickly introduce an interim code of conduct that forces energy providers to comply with the price cap.

The Greens said the repeated and growing “cartel-like” behaviour of the gas industry was the reason parts of the code should be implemented immediately.

“Gas companies are trying to hold the country hostage, sparking chaos in the energy sector and anxiety for ordinary people already experiencing the intense cost of living pain,” Acting Greens leader Mehreen Faruqi said in a statement.

“The Labor Government must immediately intervene with an interim code of conduct to make sure that gas corporations can’t hide behind this excuse to cause chaos in the energy sector by arbitrarily withholding supply and overcharging the country for its own gas.”