Yes, we really are dumb enough to import our own gas. Here’s why

Bob Hawke said in 1988 that Australia should become “the clever country”. Judging by the current state of the gas market, the nation is a long way from that goal and about to reap the results of some truly dumb decisions.

Australia is one of the world’s largest exporters of gas, yet the only feasible way to fill local supply shortfalls is to bring it in from overseas.

The Australian Energy Market Operator last month put Victoria and NSW on high alert for gas shortfalls this winter during days of peak demand and forecast the structural shortfall would grow to 50 petajoules by 2028 and increase into the future.

There’s plenty of blame to go around for what, according to former competition tsar Rod Sims, is an “absolutely absurd” situation.

Consider the developers’ reassurances last decade that their vast Queensland coal seam gas fields would yield so much gas that the local and international markets would be in perpetual oversupply.

Sounds too good to be true, right? It was – but the federal government swallowed it.

Queensland’s production has fallen far short of the optimistic forecasts, which cynics say were designed to prevent the Gillard government from imposing a domestic gas reservation scheme to ensure local needs were met.

The gas companies argued against domestic reservation and signed up to huge, long-term supply contracts with Asian buyers that have underwritten the nearly $70 billion construction bill for vast gas fields and three separate export operations at Gladstone Port. But production fell so short of expectations there wasn’t enough to fill export contracts, which has meant gas has been taken from the domestic market and shipped overseas.