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Australian gas must power Australian manufacturing

May 22, 2020

The Australian Workers’ Union has been working alongside Federal and State Ministers to ensure gas will play a pivotal role in Australia’s post-pandemic recovery and in meeting future energy needs.

In a submission to the Federal Government, the AWU says Federal and State leaders must be prepared to make sweeping changes to Australia’s gas policy in order to maximise job creation and boost manufacturing capacity.

In particular, the AWU has renewed its calls for a domestic gas reservation policy while arguing for a renewed focus on domestic fuel security.

The Federal Government announced this week its long-awaited road map setting out Australia’s energy priorities over the next 30 years in it attempts to bring down carbon emissions.

Federal Energy Minister Angus Taylor said gas will play a crucial role by being the main transition fuel and will continue to power Australia’s economy for many years to come. “As the world’s largest LNG [liquefied natural gas] exporter, all of these factors will have implications for Australia’s domestic gas market and export opportunities over the long term,” Mr Taylor said.

The government must start by tackling Australia’s sky-high domestic gas prices which have been killing the manufacturing industry in Australia since Australia linked its east coast gas market to the global export market. Unlike every other gas exporting country in the world, Australia doesn’t reserve any gas for its domestic market.

Daniel Walton, National Secretary of the AWU, said: “We are the world’s richest energy exporting nation but have utterly failed at providing affordable energy prices at home. Australia used to be a manufacturing powerhouse but as energy prices began to rocket, our manufacturing industry began to contract and many of our remaining industries are now struggling to survive.

“Shoring up our gas supply and delivering affordable energy would not only preserve these under threat jobs, it would lead to a manufacturing renaissance with many more highly skilled and highly paid jobs across the country.”

Mr Walton noted Australia has a gas export industry without a gas reservation policy – which has meant that multinational gas companies can export as much gas as they see fit overseas, driving up prices in Australia.

“Australians find themselves paying more for our own gas than we charge our customers overseas. It’s crazy!”

The AWU is helping shape government policy by being part of its Manufacturing Taskforce tasked with getting Australia’s economy back on track post COVID-19. It has also set out its key recommendations in a submission to the Federal Government.

Key AWU Recommendations

  1. With new gas projects being considered in Victoria and NSW, it’s vital that Australia develops an East Coast Gas Reservation policy so that this additional gas supply produces domestic economic benefit. As a matter of urgency, we must ensure these new projects are subject to gas reservation policies and that this extra gas supply stays in the east coast and delivers cheaper gas prices.
  2. Push for the approval and development of gas extraction across NSW and Victoria.
  3. Expand the capacity and pipeline infrastructure between the main gas producing states and the East Coast.
  4. Call on the Federal Government to ensure future offshore gas projects, including Scarborough Offshore, proceed as planned and are not subject to unnecessary delay.
  5. Maximise new gas supply opportunities in WA (such as West Erregulla Gas Project) to expand domestic manufacturing in the region.
  6. An emphatic rejection of the acquisition bid for Caltex by any foreign buyer

You can read the full submission into the Inquiry into Australia’s Oil and Gas Reserves here.

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