Government needs to act on gas, says APIA boss

There is a need for governments to address the east coast gas squeeze, according to the chief executive of the Australian Pipeline Industry Association and others.

Following the release of a Deloitte Access Economics report last week – commissioned by six industry bodies including the Australian Industry Group – Cheryl Cartwright, the head of APIA, has pointed out there is little incentive for suppliers to provide local users with gas.

According to Deloitte’s research, the cost of inaction would be worth $118 billion and 14,600 lost in economic output and jobs respectively up to 2021. Prices paid by local users will approach those paid by importers in countries including South Korea and Japan as Australian LNG exports begin next year.

Cartwright, writing in The Australian, comments that policymakers should address issues such as joint marketing by producers and “use it or lose it rules”.

 “The only way for Australia to address a gas shortage is to provide more gas or dictate where the gas goes,” she writes.

“It’s time to look at policies that impact on gas supply — or, perhaps, lead to a restriction of gas supply.”

She cited the introduction of Short Term Trading Markets and the Gas Bulletin Board as providing current information on supply and transparency.

"But what they can't do is provide more gas," she notes.

Lobby group Manufacturing Australia has said that there was clear evidence of “market dysfunction” in gas and that three years’ worth of warnings had been ignored.

MA released a report earlier this year claiming 100,000 jobs in the industry would be lost without policy action.

The organisation lists “Australia’s energy advantage” as one part of its three-pronged policy agenda, along with fair trade and “investing for manufacturing growth”.

 

Image: http://www.pennenergy.com/