Manufacturing News

Liveris repeats Dow Chemical’s demand for smarter Australian gas use

Andrew Liveris, the Australia-born CEO of Dow Chemical, has joined Manufacturing Australia in requesting that the federal government take action to make gas more affordable for users.

Liveris, a long-time critic of the country’s unfettered gas export situation, has written an opinion piece claiming that investment in Australia is being discouraged and that, despite rich gas reserves, supply is shrinking because it is being sold as exports.

“In turn, prices are shooting through the roof, causing Australian manufacturers to close up shop or shift their new investments to other places,” he writes in today’s The Australian. “This does not make sense. And it should not be the case.”

Yesterday, as reported in Manufacturers’ Monthly and elsewhere, Manufacturing Australia’s Sue Morphet warned that Australia needed to take action to secure gas for domestic users, saying that reserving five per cent of gas extracted for local use would help manufacturers.

“Because we thought there was just so much gas, no one ever thought there would be a shortage, so there were never any rules of engagement for export licences,” she said of the situation. Morphet also used her keynote address at the Manufacturers’ Monthly Endeavour Awards dinner to make the case for action known.

Liveris made a similar point regarding the need to set aside natural gas for local use, writing that “[In] Australia, all of our expanded natural gas supply is committed for export.

“While there is certainly merit to sending excess natural gas abroad as LNG, natural gas is fundamental to the domestic economy as a fuel and as a raw material in manufacturing.”

Morphet has said that up to 200,000 jobs could be lost without action, with subsectors including chemicals, aluminium, building products and paper being particularly badly affected. She has also spoken in terms of the lost value-add by exporting rather than using local gas supplies. Liveris also claimed that exports led to lost value-add, putting this at eight times what could be gained by using rather than exporting the resource.

Liveris has attracted criticism and been accused of self-interest both here and in the United States for his demands that gas exports be limited. On this website, for example, one reader claimed that the Dow boss's record, “speaks for itself…and his latest belly aching about the LNG exporters is yet another example of a CEO positioning his company to reap the rewards at the expense of others.

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