Saving export gas for local market won't lower prices
RESTRICTING billions of dollars of LNG exports in favour of a domestic gas reservation policy will not lead to lower natural gas prices or increase gas supply, the Australian Petroleum Production and Exploration Association says.
Responding to a survey released last week by Manfuacturing Australia that showed most Australians wanted a policy of domestic gas reservation, the APPEA said more than $60 billion worth of natural gas projects in Queensland alone - which employed about 30,000 people - would need to be dramatically altered to adhere to such a proposal.
APPEA chief executive David Byers said east coast gas prices were rising in response to increasing costs of supply and market conditions, and any move to cut back on exports was not the right solution.
"Australia benefits when we export goods at market prices. That's not just true for gas, it's true for wine, wool, wheat and cotton," Mr Byers said.
"To claim Australia's gas prices are amongst the highest in the world is demonstrably untrue.
"The most recent quarterly report from independent energy analysts EnergyQuest shows that east coast gas prices in the June quarter 2013 were $3.44 to $6.13 per gigajoule of natural gas compared to an average price in Japan of $15.62/GJ.
"Australia is in the middle of the pack for gas prices. Claims we have the highest gas prices in the world are completely inaccurate.
"The best solution to higher gas prices is the production of more gas - not the introduction of new regulation. Such a policy would actually reduce the very investment needed to bring on new supplies."
Mr Byers said asking expanding industries to underwrite those that were struggling only served to reduce the benefits that flowed to the community via increased employment, taxation payments and economic opportunity.
"It should be seen for what it is - a return to the protectionist sentiment that bedeviled Australia until the 1980s," he said.
Manufacturing Australia chairman Sue Morphet last week said unrestricted gas exports would lead to gas price hikes for businesses and households, as well as putting at risk almost 200,000 manufacturing-reliant jobs.
"Australians will be forced to pay one of the world's highest gas prices, despite having one of the world's largest supplies," she said.
Manufacturing Australia recently launched its Gas for Jobs campaign to highlight the impact it says unrestricted gas exports would have on the Australian manufacturing sector and households.