ACCC to investigate gas markets

The Australian Competition and Consumer Commission (ACCC) will
launch a year-long public inquiry into the competitiveness of wholesale gas
prices in Eastern and Southern Australia.

ACCC Chairman Rod Sims said in a statement that the inquiry
will concentrate on the producer, processor, pipeline, and wholesale levels of
the market and will not investigate the retail market.

Significantly, the investigation will be done with all the
powers of the ACCC under Part VIIA of the Competition and Consumer Act 2010.
This includes coercive powers to gather information and enforce industry to
provide information.

“Previous inquiries have been hampered significantly by a
lack of information. For example, conflicting accounts by industry players on
whether gas is being made available, and at competitive prices,” ACCC Chairman
Rod Sims said.

The Federal Government directed the ACCC to undertake this inquiry.
It follows the release last week of the Government’s own Energy White Paper,
which addressed ways to ensure the delivery of competitively priced and
reliable energy supplies into the future.

The Paper asserted that this can be best achieved by
promoting competition in energy markets, increasing energy productivity and
facilitating investment in energy resources development.

Yesterday, industry group Manufacturing Australia launched a plan for improving local gas supply. It claimed as many as 83,000 jobs are at
risk because of high gas prices.

The 13-point plan said what is needed is increased
competition in the gas market, increased supply, the development of
infrastructure, and incentives for new gas production.

It suggested ways to create more transparency in the market
for natural gas. It said there should be more trading hubs and that the states need
to enforce “use it or lose it” laws to stop gas being withheld.

For their part, the producers claim the market is
functioning well. As the Australian reports, they could point to a recent $1.2
billion-plus gas supply deal between the Bass Strait partners ExxonMobil and
BHP Billiton, and energy retailer AGL as evidence of this.

And a forecast by the Australian Energy Market Operator
claimed there will be no gas supply gaps in the eastern states markets until at
least 2019.

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