Plenty of gas, it just gets used by LNG exporters: report

The Australia Institute has questioned the importance of gas to a manufacturing recovery, saying there was no shortage, and increasing production would just benefit LNG exporters.

The progressive think tank published its On the make — gas and manufacturing report on Monday. Among its findings are that 1 per cent of Australian gas produced is used as a manufacturing feedstock, compared to 82 per cent that is exported, and that the gas industry uses more gas just running its export terminals than the entire local manufacturing industry consumes.

“If the Government was serious about increasing manufacturing jobs, they would fund measures to help manufacturers reduce their dependence on expensive gas rather than handing money over to the gas industry,” said Richie Merzian, Climate & Energy Program Director at TAI.

Merzian said manufacturing jobs had declined for decades while the industry enjoyed cheap gas.

“There is no shortage of gas for manufacturing in Australia. The problem is governments are allowing a few global oil and gas giants to export vast quantities of Australia’s more affordable gas, leaving only more remote expensive gas for Australian manufacturers,” he added.

The paper follows research by the Grattan Institute showing 4,000 – 5,000 jobs on the east coast (which has experienced the biggest price rises for gas) were at gas-intensive manufacturers, and that subsidising the gas industry “would have limited impact” on manufacturing. Its conclusions were disputed by Chemistry Australia.

Picture: Joe Castro/AAP

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