Gas reservation policy a howler, says APPEA

Howes said reserving a portion of Australia’s gas exports is critical to securing the aluminium industry’s future energy requirements.

“It has been estimated that as much as 80% of Australia’s projected gas supply has already been secured by LNG exporters,” he said.

“By sending so much of our gas production offshore, we have been left with the highest domestic gas prices of any country that exports gas.”

The Australian Petroleum Production and Exploration Association chief executive, David Byers, hit back saying Howes’ call “for one industry to subsidise another” would cruel investment and ultimately drive up gas prices.

“Reservation policies actually impair local gas supply and affordability, not improve it… laws dictating where and how gas can be sold deter investment in exploration and development.”

He said if the government adopts the AWU’s National Gas Reservation Policy, gas companies would demand a quid pro quo from aluminium makers for their discounted gas, that being cheap aluminium to use in plant construction.

“This is an anti-market policy demand that would leave many of its industrial proponents aghast, were it ever to be applied to their own operations.

“If taken to its logical conclusion, such an approach could see gas suppliers demanding laws forcing aluminium and steel manufacturers provide below-cost inputs to new gas-processing facilities and pipelines that are currently not commercial.”