Australian Aluminium Council demands inquiry into govt's gas export decision

Following the release of the Federal Government's Energy White Paper, manufacturers from across Australian industry are today jointly calling for a dedicated and independent inquiry to resolve serious questions about domestic gas supply and prices in light of the expected massive increase in gas exports.

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 are concerned that the Energy White Paper has not adequately addressed the risk of a 'gas gap', despite foreshadowing other important energy reforms.

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. Any threat to the supply and affordability of gas is therefore a serious matter.”

PACIA Chief Executive, Margaret Donnan, said: "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."

The Report of the Non-Government members of the Prime Minister's Task Force on Manufacturing recommended that the ACCC conduct an investigation of competition in the upstream supply of gas in Australia, and that the Productivity Commission undertake an inquiry into lease provisions and the supply of gas into the domestic market.

Australia currently has 149,305 petajoules (PJ) of economically demonstrated reserves of natural gas - proven supplies that are known to be economically recoverable with current technology. The total resource, including identified, potential and undiscovered sources, could be as large as 900,000 PJ, though much of this might not be economically recoverable unless selling prices were very high.