Can new gas fields cut power bills? Queensland bets on Bowen and Cooper basins

The Queensland Government has unveiled a major gas acreage release across the Cooper/Eromanga and Bowen/Surat basins, opening over 16,000 square kilometers for exploration as part of its effort to stabilize energy supply and lower electricity prices. The move—announced by Natural Resources Minister Dale Last—marks one of the largest land releases in recent years and is positioned as a direct response to growing pressure on the state’s power affordability and east coast gas reliability.

Although no publicly listed company has yet been awarded blocks in this round, established operators like Santos Limited (ASX: STO), Origin Energy Limited (ASX: ORG), and Arrow Energy (a joint venture between Shell and PetroChina) are among the most likely contenders for bidding due to their long-standing presence in the Surat and Bowen basins.

Why Did Queensland Release New Gas Acreage in 2025?

Queensland’s decision to open up new gas acreage reflects a broader recalibration of energy security priorities amid volatile global LNG prices, domestic gas supply crunches, and rising household power bills. With Australia’s east coast market increasingly exposed to international price swings, policymakers are under pressure to secure firmed gas supply without undermining climate commitments.

According to Minister Dale Last, the acreage release will “send a strong market signal that Queensland is open for investment in reliable energy.” The land parcels—nine in total—span resource-rich zones historically dominated by coal seam gas developments and conventional gas plays. Industry estimates suggest these basins could yield substantial reserves with scalable infrastructure already in place, especially near Wallumbilla and Roma hubs.

The announcement coincides with rising discontent in energy-intensive industries over affordability and gas supply bottlenecks. Manufacturers in the chemicals, alumina, and fertilizer sectors have voiced concern over cost pass-throughs from the LNG export-dominated supply chain.

Expert and Industry Reactions: A Deeply Divided Energy Landscape

Institutional and industry reactions to Queensland’s gas push have been sharply polarized. The Australian Energy Producers association, representing upstream firms, welcomed the move. Chief Executive Samantha McCulloch stated that unlocking new acreage “will support future supply, attract capital investment, and underpin long-term economic growth.”

On the political front, Premier David Crisafulli framed the decision as “categorically about reducing energy prices and creating jobs,” while reiterating Queensland’s dual-track commitment to both gas and renewables. His office noted that the gas policy complements the government’s $62 billion Queensland Energy and Jobs Plan, which targets 70% renewable electricity by 2032.

However, environmental groups condemned the timing and scope of the decision. The Queensland Conservation Council warned the new gas release undermines the state’s emission targets and risks groundwater systems that are already under stress from legacy wells. The council cited federal modelling estimating that gas extracted from these basins could emit over 1 billion tonnes of CO₂—potentially derailing the state’s net-zero trajectory.

Meanwhile, Lock the Gate Alliance characterized the move as a “handout to multinational gas giants,” highlighting that many exploration blocks are adjacent to existing communities and farmland reliant on groundwater. They argued that previous releases have resulted in hundreds of abandoned wells, with minimal oversight on rehabilitation obligations.

Can New Gas Fields Really Reduce Power Prices?

One of the most contentious aspects of the announcement is the claim that new acreage will help reduce household power bills. Independent economist Saul Eslake noted that unless there is a clear domestic reservation or price control mechanism, “any new supply could just as easily be exported,” diminishing its impact on domestic affordability.

This sentiment is echoed by industry observers who caution that, in the absence of structural reforms, Queensland’s new acreage may primarily feed the international LNG market rather than alleviate east coast power tariffs. Despite the promise of jobs and royalties, critics argue the price impact may be marginal without regulatory alignment.

Queensland’s three LNG export terminals—APLNG (Origin), QCLNG (Shell), and GLNG (Santos)—have long been the focal point of east coast gas supply debates. While these operators may participate in new acreage exploration, their commercial incentives are tied to long-term export contracts.

A Long Battle Over Domestic Gas Access

Australia’s gas market has been under the microscope for over a decade, particularly since the 2014–2015 period when Queensland’s LNG terminals began diverting large volumes of domestic gas offshore. The east coast domestic market—covering Queensland, New South Wales, and Victoria—was left vulnerable to global price volatility.

In response, regulators like the Australian Competition and Consumer Commission (ACCC) have repeatedly flagged supply risks, calling for more transparent pricing and reservation schemes. However, most policy responses have been piecemeal.

The current Queensland release must be seen in the context of this long-running energy policy tug-of-war between exploration encouragement, environmental resistance, and price control.

Will Santos, Origin, and Arrow Energy Lead the Bidding?

Although block awards have not been finalized, exploration veterans are expected to lead the bidding. Santos, which operates the GLNG project and maintains a major footprint in the Cooper and Surat basins, is well-positioned in terms of infrastructure and seismic data.

Similarly, Origin Energy, through its Australia Pacific LNG joint venture, has extensive CSG production and processing capabilities in the region. Arrow Energy also maintains integrated pipeline infrastructure that could offer cost advantages for early-phase development.

Analysts at JPMorgan and Macquarie have flagged that while additional acreage is welcome, capital allocation from these firms will be contingent on regulatory clarity, carbon pricing, and social license to operate.

Policy Uncertainty and Climate Trade-offs Cloud Long-Term Impact

The gas acreage release also follows the controversial rejection of the proposed $1 billion Wambo Wind Farm project, sparking criticism that Queensland’s energy policy may be tilting too heavily toward fossil fuel continuity.

Climate policy groups suggest the gas push may erode investor confidence in Queensland’s renewable transition, especially as global capital flows increasingly favor decarbonization-aligned assets. Several institutional investors, including super funds and ESG-compliant capital managers, have signaled they may reassess risk models if fossil asset expansion persists without offset mechanisms.

What’s Next for Queensland’s Gas Strategy?

Queensland’s Department of Resources has launched a three-month review of the land release process aimed at improving transparency and streamlining exploration approvals. The review is likely to set the tone for future bidding and community engagement practices.

Meanwhile, acreage evaluation, seismic assessments, and expression of interest rounds are expected to continue into Q3 2025. If exploration proceeds smoothly, development drilling could begin by 2026, with first gas potentially coming online by 2028–29—timed to coincide with projected tightening of east coast supply.