Fix Australia’s gas market or lose manufacturing infrastructure: PACIA

Australia would benefit from cooperation between gas producers and manufacturers as well as sensible regulation to the energy market, according to the Plastics and Chemicals Industry Association.

PACIA’s director for strategy and innovation Peter Bury has said his industry and gas producers’ interests were “fundamentally aligned”.

However, regulation hadn’t yet caught up to the massive shifts in the gas market, with some warning of a “gas cliff” and disastrous consequences loom for industrial users – already paying steeply rising prices – in 2016.

“In the absence of an effective policy there is no marketing competition in the major gas basins, which affects price and supply,” said Bury.

“Without stable gas supplies at reasonable prices, Australia stands to lose major manufacturing infrastructure such as ammonia plants.”

Bury yesterday addressed the opening day of the Eastern Energy Markets Outlook conference, which runs until Friday.

“Clearly the current market mechanisms – especially around supply certainty and price – are not working well,” said Bury.

“Domestic manufacturers are subject to export parity pricing, which means we’re being asked to pay the contract price paid by North Asian importers, for an Australian resource.”

Bury and his group do not advocate a gas reservation policy, rather a “properly functioning regulated market” and input from the ACCC.

For an earlier interview in Manufacturers’ Monthly with Margaret Donnan, CEO of PACIA, on the difficulties faced by industrial gas users, click here.

Image: Courier Mail