Calls to restrict billions of dollars worth of LNG exports in favour of a domestic gas reservation policy will not lead to lower natural gas prices or increase gas supply, according to the Australian Petroleum Production & Exploration Association (APPEA).
In a statement, the association said more than $60 billion worth of natural gas projects in Queensland alone, which employ about 30,000 people, would need to be dramatically altered to adhere to Manufacturing Australia’s self-interested proposal, which would ultimately deter the investment needed to bring on new gas supplies.
APPEA chief executive David Byers said while increasing east coast gas prices in response to rising costs of supply and market conditions, any move to cut back on exports is not the right solution.
“Australia benefits when we export goods at market prices. That’s not just true for gas; it’s true for wine, wool, wheat and cotton. It is difficult to judge the validity of a survey when it is claimed to be conducted across ‘eight (sic) states’ and the ‘three multiple choice questions’ have not been released,” he said.
“But to claim Australia’s gas prices are amongst the highest in the world is demonstrably untrue. The most recent quarterly report from independent energy analysts EnergyQuest1 shows that east coast gas prices in the June quarter 2013 were $3.44-$6.13/GJ of natural gas compared to an average price in Japan of $15.62/GJ. (1 EnergyQuest 2013, EnergyQuarterly August 2013 Report, August 25.)”
Mr Byers said Australia is in the middle of the pack for gas prices and claims the country has among the highest gas prices in the world were inaccurate.
“The best solution to higher gas prices is the production of more gas – not the introduction of new regulation. Such a policy would actually reduce the very investment needed to bring on new supplies,” he said.
“The east coast market gas demand is growing from 700 petajoules to 2,800 PJ by 2016-17. There are currently more than 1.1 million gas users in NSW alone. The failure of NSW to respond to increasing gas demand and develop its gas resources will have unfortunate consequences, in the form of lost jobs, higher prices, and foregone economic opportunity.”