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Highlights
- Major gas consumers support restrictions on uncontracted gas exports.
- Proposed reforms aim to cut gas prices to boost manufacturing.
- Plans include a national gas reservation policy akin to Western Australia’s model.
In a significant development, major gas consumers on Australia's east coast have shown strong support for Opposition Leader Peter Dutton’s initiative to limit uncontracted gas exports to global spot markets. This move is seen as crucial for reinvigorating Australia's manufacturing sector, which has been battling high costs and supply uncertainties.
Manufacturing Australia, representing industry heavyweights like (ASX:BSL) BlueScope, (ASX:CSR) CSR, and (ASX:TAM) Tomago Aluminium, has vocally backed the Coalition’s proposed reforms. These reforms are designed to serve the national interest by targeting a reduction in gas prices from the current levels of over A$14 per gigajoule to below A$10. Ben Eade, CEO of Manufacturing Australia, emphasized the necessity of these measures, stating, "Our message is clear: If we want Australian manufacturing jobs, we need competitively priced gas."
The Coalition's commitment to driving down gas prices has been welcomed by industry leaders, especially given the untenable prices in a gas-rich nation like Australia. The strategy not only aims to retain the existing manufacturing capabilities but also seeks to expand them by ensuring more sustainable gas costs.
In 2024, a reported 87 petajoules of uncontracted gas were exported to global spot markets—a practice Manufacturing Australia argues should be redirected towards domestic users. This redirection is suggested particularly because Australian regulators have forecasted potential gas shortages, which could further strain the manufacturing sector already dealing with high prices and supply instability.
Further bolstering the domestic gas supply, Manufacturing Australia earlier this month proposed a four-point plan. This plan includes speeding up domestic gas development while adhering to environmental safeguards and instituting a national gas reservation policy. This proposed policy is inspired by Western Australia’s approach, which mandates reserving 15% of gas exports for local consumption.
Through these strategic reforms, Australia could ensure a more robust and competitive manufacturing sector, driven by more affordable and stable gas supplies. This initiative not only promises to protect jobs but also positions the manufacturing industry for future growth amidst global economic shifts and energy market dynamics.
