Harder to do business in Australia than in the US: Incitec Pivot

Fertilisers and explosives company Incitec Pivot has spoken out about its decision to open an ammonia plant in Louisiana, citing a favourable regulatory environment, cheap energy, and political help to “get things done.”

Incitec’s CEO James Fazzino has previously mentioned gas prices – with the US in the middle of a shale gas boom – as a factor in the April announcement that a factory would be opened in Waggaman, Lousiana. Construction begins this month.

In an interview with the Australian Financial Review, Fazzino also highlighted what he considered a more pro-business attitude in the United States compared to Australia.

“The whole tone of the discussions was so refreshing because [Bobby Jindal, Lousiana’s governor] wanted to get things done,” Fazzino told the AFR.

“That was the mindset from the top and that trickled through the whole bureau­cracy. There and then, Jindal got his head of environment to cancel his meetings and have lunch with me to discuss the project.”

Fazzino, a vocal critic of Australia’s pro-export approach to gas extraction, also mentioned the energy prices in the US, which are currently about $3 per gigajoule.

Australia currently has seven of the world’s 12 major gas projects in development.

These projects are earmarked for export to Asia, where they will fetch higher prices from energy-poor countries such as Japan. Fazzino compared this unfavourably to the situation in the US, which applies a national interest test to LNG exports.

“We are giving away the opportunity to create downstream, value-adding industries. And, with the gas, we are giving away to Asia, tens of thousands of jobs that should be there for our children,” said the CEO.