Campaign to keep natural gas reserves for industry

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http://www.abc.net.au/news/2014-09-29/campaign-to-keep-natural-gas-reserves-for-industry/5775736

A national campaign is being launched today for greater controls over Australia's natural gas exports.

A national campaign is being launched today for greater controls over Australia's natural gas exports.

The union-backed campaign wants the federal government to enact laws to ensure a certain percentage of Australian gas is kept for domestic use rather than being exported.

A study by BIS Shrapnel warns that one in five manufacturers could shut down over the next five years because of spiralling gas prices.

The 'Reserve Our Gas' campaign, headed by the Australian Workers Union, comes amid fears that Australian gas prices will triple from July next year as LNG exports ramp up.

AWU national secretary Scott McDine told ABC radio's AM program that Australia is out of step with other major nations, such as the United States, that reserve a percentage of gas for domestic use.

"Australians have a right to know their rapidly rising gas bills are actually completely preventable. We just need to do what every other gas-exporting nation does and bring in laws to look after the local population," he argued.

"Australians should pay the Australian price for gas - not the global price - because it's our gas."

Mr McDine says Australia is putting itself in a ridiculous position of having large gas reserves, yet industries suffering under high gas prices.

"We currently have a situation in which our abundant gas reserves are hurting Australian jobs and households instead of helping them. That's crazy and it's no wonder no other gas-exporting nation allows it," he argued.

"We are throwing away hundreds of thousands of jobs, and our national competitive advantage, simply so gas exporters can squeeze a little extra profit out of what is already a spectacularly profitable business.

"Of course our abundant natural gas can and should be exported to the world. But a portion of it also needs to be providing a competitive advantage to our local industry, and a cost of living benefit to Australian consumers. We can have both, just like every other gas exporting nation."

WA already reserves gas

The AWU campaign is being supported by major Australian manufacturers exposed to rising energy prices, including Alcoa and Australian Paper.

The study by BIS Shrapnel, commissioned by the AWU, finds that rising gas prices will have significant impacts on the economy:

  • One in five heavy manufacturers will shut down within five years
  • Total manufacturing production will be reduced by 15.4 per cent by 2023
  • 91,3000 jobs will be lost in this period as a direct result of manufacturing shutdowns, with 235,000 jobs to go economy-wide 

The BIS Shrapnel report also notes a high profit ratio of 66 per cent for gas producers, compared to 32 per cent for iron ore producers.

While there is no national gas reservation policy, Western Australia mandates the reservation of 15 per cent of the state's gas.

The report says the WA policy has not damaged gas investment or created sovereign risk, with $88 billion invested in WA gas production since reservation was introduced in 2006.

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