Media Release

6 June 2026

Trilemma has a winner

The energy trilemma is the trade-off made between reliability, affordability and environmental sustainability. With net zero carbon policies, the environment has been the recent focal theme in the trilemma – taking reliability for granted, until recent events reminded everyone that reliability is always the winner in the three-way race.

Mr Wilkinson said “There is no point in having cheap, clean energy if there is none available. Recent global events have demonstrated the criticality of having reliable energy”.

To address reliability issues, the Australian Government’s has moved to introduce a 20% domestic gas reservation on LNG exports, but EnergyQuest analysis suggests this latest market fix is unlikely to fix much. Our modelling indicates a reservation rate of not more than 15% on just new LNG contracts would be more than enough to avoid east coast annual shortfalls past 2035 – yet there is little gas available to reserve until Queensland LNG foundation contracts expire in 2034-35, and a reservation does nothing to address the more pressing risk of shortfalls during peak demand. 

Mr Wilkinson commented that “domestic gas reservation of not more than 15% of LNG exports on new LNG contracts, similar to the current WA policy, should be sufficient to balance annual east coast demand, for at least the next two decades”.

“However gas reservation alone does not address the core challenge for the east coast of meeting seasonal and daily peak gas demand swings during the year – this needs major investments in infrastructure such as expanded pipelines, storage and possibly LNG regasification.”

“Without addressing the peak demand challenge, gas reservation is a gas market fix, which doesn’t fix much”

Also on the reliability theme, the outbreak of war with Iran at the end of February and the effective closure of the Strait of Hormuz have reshaped energy trade. The Albanese Government has cast Australia’s standing as a large, reliable LNG supplier as a bargaining chip for liquid-fuel security. EnergyQuest cargo data does show shipments rising to Singapore, Malaysia, Taiwan, China and for the first time, Vietnam, while cargoes to Japan and South Korea fell.

There are signs the NEM may have crossed a threshold on renewables. Installed grid-scale battery capacity more than doubled in the year to end-March 2026. Wholesale spot power prices fell $10/MWh (–12%) qoq to $73/MWh, with the renewable share of generation reaching a Q1 record of 46.5%.

Exploration activity continues its resurgence. Spending of $438 million in Q1 2026 was up 47% on a year earlier and only modestly below the ten-year high of $556 million set in Q4 2025, sustained by onshore momentum in the Otway Basin and the Taroom Trough.

Key Statistics

  • National petroleum production remained at a seven-year low in Q1 2026. Production has declined steadily since a peak in 2021, with the latest result coming in at a decrease of 4.6 MMboe (-1.8%) to 249.3 MMboe.
  • Oil is back in the spotlight. National oil production reached a new record low of 3.8 MMbbl in Q1 2026, down 1.6 MMbbl (–30.0%) qoq, following the closures of Van Gogh and Barrow Island and structural decline across every major project.
  • Total LNG shipments in Q1 2026 were flat qoq at 19.5 Mt, although slightly greater than 19.4 Mt in Q4 2025. The national result was achieved despite the impact of Cyclone Narelle on the latest quarter, which reduced Western Australia (WA) shipments to 10.8 Mt in Q1 2026 from 11.0 Mt in Q1 and Q4 2025.
  • National conventional gas production decreased by 21.8 PJ (-11.4%) qoq to a three-year low of 170.5 PJ

Attributions and Media Contact:

Rick Wilkinson 

Chief Executive Officer

EnergyQuest

Mobile: +61 (0) 7 3870 9152

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