A new report launched by the Australian Worker’s Union (AWU), Shipping Away Our Competitive Advantage, urges the federal government to shift position on gas exports. In response to the report, the Australian Petroleum Production and Exploration Association (APPEA) has said it peddles misleading, out-of-date data to support the union’s agenda to cut Australia’s liquefied natural gas (LNG) exports.
“The AWU’s alternative policy would jeopardise investment in new gas supply, costing jobs and pushing up prices,” said APPEA in a statement.
The AWU’s core policy asks include:
- A mandated ‘flexible minimum gas supply requirement’ that would require LNG Producers to supply the domestic market adequately before earmarking gas for export.
- A ‘use it or lose it’ provision that would mean if a gas tenement has been granted to an entity, that entity must invest in capital works that indicate its intention to extract natural gas.
AWU National Secretary Daniel Walton said without a swift and decisive change of policy direction on gas exports, thousands of Australian jobs would be lost.
“On current projections one in five heavy manufacturers will shut as a result of high gas prices. Thousands of Australians working in the manufacturing sector are being forced to consider the prospect of the dole queue because their employers are struggling to afford to power the factories they work in,” he said.
APPEA said in their statement that gas supply is only one of many factors affecting local manufacturing’s competitiveness.
“While gas is an important input for some manufacturing businesses, most manufacturers use relatively little or no gas.”
In responding to the claim by AWU that Australian industries are now paying more for wholesale gas than their overseas counterparts, APPEA said that many countries – including the largest producer USA (21.5 per cent) – have gas reserves that are larger and cheaper to develop than Australia’s.
APPEA further added that the latest global survey of wholesale gas prices by the International Gas Union shows that east coast gas prices are lower than prices in Australia’s main trading partners.
“Australia’s average wholesale price in 2017 ranked 26th in a survey of 52 nations. Australian prices are lower than prices paid by our major customers: Japan, South Korea and China. Our prices are also lower than average wholesale prices in LNG-producing countries in our region, such as Malaysia and Indonesia.”
Mr Walton said that coal seam gas (CSG) projects cannot be the answer to the gas challenges.
“Australia is already producing three times the gas we could use at home. And even if you could get community permission for more CSG, it takes years to bring those projects online, and within years we will see thousands of jobs lost.”
