The Energy Users Association of Australia (EUAA) has welcomed news of the Productivity Commission commencing a project examining policy issues related to the Australian gas markets.
“The massive transformation currently experienced by Australian gas markets has the potential to shut down entire industries,” the association’s CEO Phil Barresi said.
“The economic impact of gas price and supply issues cannot be underestimated. Energy users have been calling for policy makers to take this grave issue seriously.”
The project is focusing on three critical elements – the implications of linking to global markets, the effects of economic regulation on usage and investment, and the potential costs and benefits of policies affecting exploration and production activity.
“This focus project is quite significant and we trust removes the emotional hyperbole coming from producers and anti production interest groups at the cost of having gas flow to manufacturing and commercial centres in our regional centres,” Mr Barresi said.
“International price parity and the diversion of all gas to international markets will decimate local industry. In terms of economic regulation we implore the Productivity Commission to go a step further by looking at the effects of possible market intervention as a short term transitional solution to enable local manufacturing to become more confident in their future investment in Australian jobs.
“It’s essential to ensure transmission access and transparency of access is fully maximised to enable those few local manufacturers who are able to find gas to have it shipped to them.
“Finally, the Commission’s proposed analysis of policy costs and benefits will potentially resolve one of the long standing concerns of gas users, being the ‘lose it or use it’ principle for onshore gas reserves.”
Deloitte Access Economics research undertaken on behalf of a consortium, including the EUAA, suggested specific industry sectors will suffer up to $118 billion loss of income from 2014-2021, with significant impact on employment.