Large gas users concerned of gas security
Weekend Australian, 10-11 November 2012
An alliance of large gas users has combined to lobby the government to act in order to secure gas supplies for domestic consumption and electricity generation. The group has asked for an inquiry to be conducted that would focus solely on the domestic supply and price volatility of gas.
The Energy White Paper released last week focused heavily on the exportation of gas into Asian markets, but also discussed the development of domestic gas markets. The aspiration of becoming the world leading gas exporter was offered which gives credence to the concerns of the group, but the document counters with the statement that ‘there is sufficient gas to meet long‑term domestic and export needs’. Although, in spite of this statement support is again given to the group with the concluding sentiment that the result of the competing dichotomy of domestic and foreign gas needs will lead to a manifestation of ‘tighter supply and higher prices’ in the short to medium term.
The alliance which includes Aluminum, Grocery, Plastics and Steel groups stated that the content did not sufficiently address the risks associated with gas security and its twin determinants of supply and price volatility. They raised gas’s pivotal role in the manufacturing and electricity sectors, which could be compromised by LNG exports either driving up prices through supply side drivers or prices being pegged to expensive Asian markets.