The chemical manufacturing industry is the latest addition to a long list of authorities and industry groups concerned at the looming East Coast gas supply crunch.
Chemistry Australia (CA) has backed Federal Government and ACCC calls for State Governments and Territories to drop their blocking policies and approach natural gas development on a case-by-case basis.
CA Chief Executive Samantha Read also took aim at activists trying to pretend there was no gas supply issue, citing price rises and the difficulty of supply certainty for business.
“Demand destruction is not a solution to the gas crisis,” Ms Read said in a statement late last week.
This is a reference to claims by enviro-political lobby groups Lock The Gate and The Australia Institute that there is no need for development of new natural gas resources, because demand is forecast to fall – on the East Coast.
The only problem is that the TAI and LTG forecast of falling gas demand is based on business closure forced by rising prices or lack of certainty of supply.
Manufacturing Australia have said this demand destruction will be a result of many closures as businesses decide to shut down or relocate. Unions have said that hundreds of thousands of jobs are at risk.
As we pointed out two years ago, the gas industry, the ACCC and many customer groups have long been warning of this risk.
Ms Read had a similar warning:
“Australia will pay a heavy price with job losses across the manufacturing sector. This is a double-whammy hitting everyday Australians who are already struggling at home with rising power and gas bills,” she said in last week’s statement.
But don’t bother trying to make this point to The Australia Institute. It still maintains that Woodside’s development of the North-West Shelf (off the WA coast) in the 1980s has failed to deliver real benefits to the Australian economy and that there are no lasting benefits from the $70 billion investment and 40,000 jobs which underpinned the creation of Australia’s new, world-leading coal-seam gas LNG export industry in Queensland, which is already generating billions in taxes, royalties and export income.
Ms Read said the “most fundamental” need was new gas supply.
“If all states were to adopt the ACCC’s recommendation for a case-by-case assessment on projects, this would open investment and jobs growth potential,” she said.
“There has been a lack of understanding of how critical domestic gas is to job creation. Australia has an abundance of gas; our ambition should be greater than just meeting current day demand. Gas can create opportunities right through Australia’s value chains, and be a catalyst for investment just as it is in other countries endowed with similar gas reserves.”
Ms Read’s comments followed a warning a fortnight ago from the food manufacturing industry.
And there have been many others:
- Last month, a long-standing Victorian methanol plant shut up shop, intending to move to the United States of America, where gas is cheaper and supply more certain.
- Then there was the energy-intensive recycling plant in South Australia which announced it would shut down last month – crippled by rocketing power prices.
- And the Victorian dairy processor Burra Foods, which earlier in the year spoke of how its gas bill more than doubled in the last two years, causing serious business stress.
- In the Northern Territory, a long-standing drilling services company employing dozens of skilled workers was forced to close down because a Government moratorium on natural gas activity had cruelled its business.
- Going further back, major manufacturer Incitec Pivot decided against building a fertiliser plant in Victoria or NSW, worried it may not be able to secure the long-term supply of natural gas essential to the project. Instead it built a new facility in Louisiana, in the USA.
These examples highlight the impact of rising prices and development blockers which cast doubt on future availability and price of gas energy and gas as an essential feedstock to many industrial manufacturing processes.
But not according to Lock The Gate, which last week repeated its head-in-the-sand claim that a shortage fear was the product of some kind of weird gas-industry conspiracy.
“We have oodles of gas,” LTG coordinator Carmel Flint told the ABC.
“We are drowning it.”