Deliberately oversupplying southern markets has a "large risk of being negative", Beach Energy chief executive officer Brett Woods said at a gas industry conference on Tuesday.
"If we export less liquefied natural gas (LNG) than we possibly could, while choking back domestic production, that is a gift for our international competitors and potentially an economic own goal," the head of the Adelaide-based gas producer said.
"We will reduce our export income, we reduce royalties that take pressure off taxpayers, and we choke the investability of gas projects that don't have the same scale as LNG developments."
Mr Woods' remarks at the Australian Domestic Gas Outlook conference came just days after Opposition Leader Peter Dutton outlined a plan to introduce an east coast gas reservation to keep more of the fuel onshore and send less overseas.
By forcing gas into the domestic market to create an oversupply, the opposition expects prices to sink from $14 a gigajoule to $10 a gigajoule.
The controversial policy announcement propelled Australia's looming gas shortage on the east coast to the forefront of the federal election campaign.
Chair of Shell Australia, Cecile Wake, said ramping up export controls would not increase gas supply but rather redistribute it.
"And when coupled with price caps and other market interventions, it can impede investment and actually exacerbate the challenge," Ms Wake said at Tuesday's conference.
The coalition's plan is not isolated to the reservation policy and also includes fast-tracked approvals and a promise to extend the life of Woodside Energy's North West Shelf gas operations in Western Australia.
Gas is used for cooking, heating and manufacturing, and is needed for electricity production when there's not enough coal, hydro and renewables to meet demand.
Expensive gas therefore contributes to higher wholesale electricity prices.
Australian Industry Group chief executive Innes Willox said industry gas users were broadly supportive of Mr Dutton's plan.
"When it comes to the opposition policy, you'll find very strong support within the customer base of industry for what's been proposed," he said.
"And that's because of exasperation of where we've got to already, around reliability, price, contracting, the like."
Mr Willox said producers, suppliers and consumers were all on the same page when it came to getting more gas in the market.
All policy options should be on the table, he said, including more projects, gas import terminals, and domestic gas reservation.
"The point I would make is, why can't we have it all?"
The Australia Institute has applauded the opposition's east coast reservation plan and has long argued the industry is not paying its fair share of tax.
Analysis of Commonwealth commodity forecasts by the progressive think tank suggests $170 billion worth of LNG made with gas that attracts no royalties is set to be exported in the next five years.
"Unrestricted gas exports have been a disaster, but even worse is that most of it is given away for free," principal advisor at the think tank, Mark Ogge, said.
"Not only is this fiscally irresponsible, but this is making climate change worse."
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