13 April 2015
Gas squeeze threatens 83,000 jobs
Manufacturers have called for an overhaul of the domestic gas market to ensure surging east coast gas exports will not squeeze supplies to large industrial users, resulting in a threat to tens of thousands of jobs.
Lobby group Manufacturing Australia says the sector will decline by $120 billion by 2021 unless this issue is addressed urgently, with projections also suggesting up to 83,000 direct manufacturing jobs are at risk.
Concerns that surging gas prices could force manufacturers to shift production capacity offshore has resulted in stepped up lobbying in a bid to push for increased transparency and efficiency of the gas market as price rises begin to bite.
The price of gas sold to households and small businesses is already rising and is forecast to increase by an estimated 7.5 per cent in 2015-16.
"Large industrial customers have a lack of confidence in the gas market for long-term supplies," the executive director of Manufacturing Australia, Ben Eade said.
"The impact is real, material and happening now."
The latest gas statement of opportunities issued on Monday by the Australian Energy Markets Operator showed slumping industry demand coupled with supply upgrades has pushed back concerns over domestic gas supply shortages emerging over the next five years.
As a result, no supply gaps are forecast for any of Australia's eastern and south-eastern gas markets between now and 2019.
But large users are finding it impossible to contract gas for long periods, which is threatening the viability of much of the country's manufacturing base, he said.
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