The Australian Advanced Manufacturing Council commends the initiative by the government to restrict gas exports and thereby counter domestic shortages.
The government said on Tuesday it was taking action to put downward pressure on power prices and ensure reliable energy for all Australians and make businesses more competitive.
Part of the agreement comprises new regulation to give Australian customers priority access to gas supply before it is exported. The draft Australian Domestic Gas Security Mechanism is due to be in effect by July 1.
“The finalisation of our tough gas regulations will increase supply to the domestic market, putting downward pressure on gas prices which have risen because of supply shortfalls,” the government said.
“We simply cannot allow Australians to pay more for Australian gas than competitors overseas do.”
Restricted local supply has ramped up local gas prices dramatically and made it tough for manufacturers to compete on the world stage. From July, restrictions will be placed on gas exporters when there are shortages in the domestic market.
“The Government’s decision crucially recognises the importance of our ample gas reserves for building high-end manufacturing,” says Chairman of the AAMC, Mr John Pollaers.
“The Federal Government is to be commended for putting an emphasis on gas security and affordability for local domestic consumers, including our industry users who create jobs and add value to our basic resources.”
Advanced manufacturers have been sounding the alarm for many years that Australia is in danger of squandering its abundant natural gas reserves, and of becoming the largest exporter of LNG in the world while having a shortage of gas in its east coast domestic market.
“We have long argued that Australia has the gas resources to be a highly competitive location for new global high technology manufacturing, just as the US has seen,” Mr Pollaers says.
The U.S. shale boom has been a major contributor to a steady growth in manufacturing employment in the United States, with the US Bureu of Statistics reporting that manufacturing added 646,000 jobs to the economy from February 2010 to May 2014, and manufacturers are continuing to actively recruit to fill another 243,000 positions.
“At the AAMC, we believe Australia’s resources can sustain both a vibrant gas export sector and a competitive domestic supply. Ideally, we need to work towards an effective, functioning, and transparent gas market. This will facilitate a true competitive energy advantage for Australia,” says Mr Pollaers.