Manufacturing job losses imminent as gas shortage worsens

TAFT, CA - JULY 21: An oil rig south of town extracts crude on July 21, 2008 in Taft, California. Hemmed in by the richest oil fields in California, the oil town of 6,700 with a stagnated economy and little room to expand has hatched an ambitious plan to annex vast expanses of land reaching eastward to Interstate 5, 18 miles away, and take over various poor unincorporated communities to triple its population to around 20,000. With the price as light sweet crude at record high prices, Chevron and other companies are scrambling to drill new wells and reopen old wells once considered unprofitable. The renewed profits for oil men of Kern County, where more than 75 percent of all the oil produced in California flows, do not directly translate increased revenue for Taft. The Taft town council wants to cash in on the new oil boom with increased tax revenues from a NASCAR track and future developments near the freeway. In an earlier oil boom era, Taft was the site of the 1910 Lakeside Gusher, the biggest oil gusher ever seen in the US, which destroyed the derrick and sent 100,000 barrels a day into a lake of crude. (Photo by David McNew/Getty Images)

As Australia’s gas shortage intensifies and gas prices rise, manufacturers are warning of job losses and a fall in business investment.

The Australian reports that regional manufacturers, including the country’s largest tomato producer, Kagome Australia and largest wool processer, Victoria Wool Processors, have warned they will halt investments if prices keep on rising. Both companies have revealed they will face major gas price rises in the new year, up to 100 per cent.

Kagome chief executive Jason Fritsch said the situation became apparent after the company entered negotiations with retailers last year and faced “take or leave it” gas prices, due to critical lack of supply.

“We did not have an option of contracting for a 12-month period; we had to take a two-year period with another price increase next year,” Mr Fritsch said.

“Over the last three years, gas demand has tripled largely due to an increase in export, without an accompanying increase in the supply of gas to meet this ­additional demand.

“I acknowledge there is complexity around introducing additional supply, but we need our state and federal governments working together to find a way.”

The federal government has urged state governments to remove restrictions on gas extraction and fracking to ease the shortage and dampen prices.

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