Industry body Weld Australia has said that unrestricted gas exports have led to both exposure to higher world energy prices – with wholesale east coast gas prices tripling in a decade – as well as volatility from international events.
Commenting on a report released last week by progressive think tank The Australia Institute, Weld Australia said average wholesale gas prices rose 190 per cent and electricity prices (linked to gas prices) by 73 per cent between 2015 to now.
“Gas exports have exposed Australian manufacturers to international price volatility and cost blowouts that are decimating their competitiveness. Our industry is already under intense pressure from subsidised imports. Rising energy costs are a double blow many can’t survive,” said Weld Australia CEO Geoff Crittenden.
“It beggars belief that, for over a decade, governments have allowed LNG producers to export surplus uncontracted gas while Australian manufacturers struggle to secure affordable supply. The system is broken, and it needs to be fixed now.”
According to The Australia Institute’s analysis, 80 per cent of Australia’s gas production is currently exported, primarily by foreign-owned companies. 56 per cent of the gas exported “is given away for free, including 78 [per cent] of gas exported from WA, and 100 [per cent] of gas exported from the NT, with no royalties paid on this gas.”
Crittenden added: “Australia’s manufacturing sector, particularly advanced fabrication, relies on energy certainty and affordability. The current approach prioritises profits for foreign-owned gas giants over Australian jobs, industry resilience, and energy security. That must change.”
The group proposed measures including a national domestic gas reservation prioritising affordable supply for local manufacturers, export restrictions or quotas on uncontracted gas during periods of domestic shortfall, and supporting investment in electrification and renewable energy uptake for industry to reduce reliance on gas.
Picture: credit CARLOS534 (CC BY-SA 4.0)
Further reading
Australia’s remaining appliance makers under the pump
Coalition calls for domestic gas reservation to lower energy costs
Greater focus on domestic gas prices, gas reservation – Husic
Celebrating Australian sovereign capability – the future of Bass Strait gas