Rise in Gas Exports To Effect Australian Manufacturers


Manufacturers across Australian industry recently called for a dedicated and independent inquiry to answer serious queries about domestic gas supply and prices in light of the huge increase in gas exports.

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The call follows the release of the federal government’s Energy White Paper, which some industry players say has not adequately addressed the risk of a “gas gap,” despite “foreshadowing other important energy forms”.

The companies that voiced their concerns included the Australian Aluminium Council (AAC), the Australian Food and Grocery Council (AFGC), the Australian Industry Group (Ai Group); the Plastics and Chemicals Industries Association (PACIA) and The Australian Steel Institute.

AI Group Chief Executive Innes Willox said, “Natural gas is an efficient and clean-burning fuel for manufacturing industries and is an essential feedstock at the foundation of many chemicals industry value chains.  Gas is also increasingly crucial to our broader economy, especially in providing peaking power and cleaner baseload supply in the electricity system.”

He added that “Any threat to the supply and affordability of gas is therefore a serious matter. The Government proposes sensible measures to boost gas production and increase transparency; these steps are necessary – but may not be sufficient to solve the problems facing domestic gas users.”

PACIA Chief Executive added, “The coming expansion of Liquefied Natural Gas exports from Australia’s east coast offers many benefits. But as the experience of Western Australia suggests, and as recent research conducted for PACIA and Ai Group confirmed, the immense quantities contracted for export risk squeezing domestic consumption, and tie us to the East Asia gas market – the most expensive in the world.”

AAC Executive Director, Miles Prosser, said that large gas users are “already finding it extremely difficult to secure new long-term supplies to underpin investment, despite claims that there is plenty of gas available.”

“There is a risk that problems around access will compromise investments and expansion of value-adding industries. This will have serious implications for jobs and the regional communities in which they operate,” Prosser said.

AFGC CEO, Gary Dawson, said: “For businesses already squeezed by rising input costs and retail price deflation, the potential for higher gas prices could damage the viability of Australian manufacturers and runs the risk of driving more production and jobs offshore.”

Source: http://pacia.org.au/mediacentre/inquiry_needed_to_fill_gas_gap