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Access to affordable gas critical for Australian manufacturing - 3 September 2018

Delaying the NEG decision will be at the cost of energy users

 

Access to affordable gas remains a policy priority for Australian manufacturing. Chemistry Australia welcomes further support for this position from the Federal ALP in their National Gas Plan announced today.

“The industry welcomes policy options to the table that could provide downward pressure on domestic gas prices,” said Chemistry Australia CEO Samantha Read.

“There is now acceptance across the political divide that $10 gas is not sustainable if we want to keep industrial manufacturing on the east coast. This is a significant development that refocuses the policy discussion on the importance of Australian jobs and Australian value chains.

“The vigorous reporting regime by the ACCC, AEMC and other Federal Government interventions have had effect to bring down spot prices from historic highs. However, our members are not experiencing similar relief in gas contract pricing, with three to four-fold increases in a relatively short period still being reported.

“The 2014 Deloitte Access Economics Report forecast losses of $118 billion in manufacturing output and 15,000 jobs between 2014 and 2021, due to the gas market transformation resulting from LNG exports. This may be conservative given the scale of the transformations that have eventuated.

“This is about Australian gas and Australian jobs. We are certainly encouraged that there is now much greater recognition that creating the right environment for industrial manufacturing is a policy priority.

“Australia is fortunate to have an abundance of gas, and is more than able to support domestic industrial manufacturing, LNG exports, as well as commercial and retail markets.

“It remains essential to immediately lift the bans on gas development in the southern states to boost supply and help decrease costs. Transportation adds to the cost of gas for users. The best way to ensure low cost gas is to develop the resources available, in the markets in which they are used,” said Ms Read.

 

Gas is particularly essential to the business of chemistry. It’s important for process energy, and it is also a non-substitutable ingredient for advanced manufacturing. The Australian chemistry industry uses 10% of Australia’s domestic gas for its molecular properties to create a huge range of products essential to our everyday lives. These include fertilisers for our crops, cleaning products for health and hygiene in our homes and hospitals, and smart packaging to keep our food fresher for longer.

 

Media contacts:
Claire Selby – cselby@chemistryaustralia.org.au or 0448 028 876
Krista Imberger – kimberger@chemistryaustralia.org.au or 0439 318 290

 

Chemistry Australia is the pre-eminent national body representing the $40 billion Australian chemistry industry, one of the largest manufacturing sectors in the country. The industry employs more than 60,000 people and contributes more than $11.6 billion to GDP in industry value add. Members of Chemistry Australia are positioned across the entire value chain including manufacturers, importers and distributors, logistics and supply chain partners, raw material suppliers, fabricators, compounders, recyclers, research, academia and service providers to the industry. These businesses range from small family-owned companies to leading national and multinational enterprises.

 

 

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