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Unrestricted east coast LNG exports dangerous for industry

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Manufacturers are concerned about a looming east gas shortage as LNG exports begin, with some calling for a use-it-or-lose it policy to be adopted.

High-profile lobby group Manufacturing Australia recently repeated its claim – based on research it commissioned last year – that 200,000 jobs and $28 billion in GDP would be lost if no action was taken by state and federal governments on gas exports.

Around $200 billion has been invested in building Australia’s seven major gas projects.

The Australian Financial Review reports that the first LNG exports from Curtis Island in Queensland will begin by the end of this year.

“Rather than asking what the cost of intervention is, governments should be asking what is the cost to the nation of doing nothing,” said Sue Morphet, Manufacturing Australia’s chairman said, according to The AFR.

“It is not good enough for poor planning and bad policy to turn one of ­Australia’s greatest strategic assets – our abundant energy resources – into a liability. No other gas-rich country lets this happen. Why should we let it happen in Australia?”

Dow Chemical has alleged that some producers are hoarding gas for exports, for which they can receive a higher price than for selling to local users.

It has proposed use-it-or-lose-it policies to the federal government.

“Dow Chemical has direct experience of having pursued significant investments in Australia which ultimately did not come to fruition because efforts to secure gas supply were frustrated on each occasion,” the company said in a submission to the federal government’s study on east coast gas prices.

“In each case we were unable to obtain supply of gas because of the policies of the gas producers. Price was not at issue in any instance.”

Meanwhile, the industry body for gas producers, the Australian Petroleum Production and Exploration Association (APPEA), will claim at its annual conference today that new industrial laws covering major projects, which have significantly exceeded their budgets, should be subject to new industrial laws.

“Reform is urgently needed or we risk losing the next wave of LNG investment that could create 150,000 Australian jobs,” APPEA’s CEO David Byers will say,according to News Corp.

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