Unions, business and industry tell inquiry: We need more gas!

February 6th, 2015

A New South Wales Parliamentary committee looking into gas supply and pricing issues has been given a simple message – the State needs more gas.

The Upper House inquiry into the supply and cost of gas and liquid fuels in NSW held it’s final hearing in Sydney this week, and a review of the hearing transcripts (Day 1, Day 2) shows the broad consensus of opinion that emerged.

The message from industry, employer and business groups appearing at the hearing was simple: We need more gas and we need it as soon as possible. The alternative is higher prices, business disruption and big job losses.

We’ve summarised the views of some of the groups appearing before the Committee over the course of two days of hearings:

  • The situation is “urgent” for NSW and Victoria – peak industry body APPEA
  • Millions of gas users in three States could be affected if there were an interruption to supply from Bass Strait – Santos and Australian Pipeline Industry Associaition
  • In NSW, 33,000 businesses employing 300,000 people use gas, with 95% coming from Bass Strait and Moomba – NSW Energy Minister Anthony Roberts
  • A supply/price hike shock could put industrial users out of business – CSR
  • “Profound” impact on industry will be felt from next year – CSR
  • “Unequivocally, we need more gas. We need more gas and more producers.” – CSR
  • A “demand crunch” would be “disastrous”, resulting in loss of tens of thousands of jobs – Australian Workers Union
  • Uncertainty is already troubling manufacturers. NSW and Victoria need to develop onshore gas reserves to avoid a major hit to production and investment – Energy Users Association of Australia
  • “Moratorium equals risk, equals higher cost” – Energy Supply Association of Australia

On the issue of alternatives top natural gas, suggestions that renewable energy was the solution to gas shortages were scotched by the Energy Supply Association of Australia, which pointed out gas was an indispensable feedstock for many industrial processes and could not be substituted.

A pipeline from the Northern Territory was also an unlikely shortage solution, the Australian Pipeline Industry Association noted. It was highly unlikely that a demand shortfall in NSW would provide sufficient financial incentive to meet the ‘$1 billion plus’ capital cost of building new infrastructure from the NT, it said.

Despite this confluence of opinion, the NSW Government continues to wrestle with the environmental politics of allowing sensibly regulated development of natural gas resources. Abundant supplies of natural gas remain locked up as the likelihood of shortages grows, while the natural gas industry continues to develop in Queensland, South Australia, the Northern Territory and Western Australia.

The Committee is due to report at the end of the month, so only time will tell if the inquiry translates into good news for gas users.



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