LNG exporters warned stop putting local businesses at risk
THE gas industry has warned price relief is unlikely for southern states unless governments lift exploration bans.
The warning comes after Australia's competition watchdog criticised Queensland's LNG exporters for having "contempt" for the domestic market.
Speaking at a gas industry conference this week, Australian Competition and Consumer Commission chairman Rod Sims threw the Curtis Island LNG exporters into the spotlight and said the gas industry had brought government intervention on itself.
Mr Sims said gas suppliers were driving manufacturers and other domestic gas users out of the market by failing to address the high gas prices.
"We must all remember that, when the LNG projects in Queensland were being commissioned, the suppliers promised that this crisis wouldn't happen," he said.
"Gas suppliers would be well advised to consider what they can do to provide immediate price relief."
With the introduction of the Australian Domestic Gas Security Mechanism in 2017, Curtis Island exporters were forced to supply the domestic market with more gas and to promise they would prioritise local customers in the event of a shortfall.
A Santos spokesman said in response to Mr Sims' comments that the company was doing "a huge amount" of work to increase gas supplies in a bid to drive competition and put downward pressure on prices.
But he said with moratoriums on gas exploration ongoing in Victoria and New South Wales, price relief would be difficult.
"Successive Queensland governments have supported gas development, and that's a good thing, but Queensland should not be expected to do all the heavy lifting for southern states that will not facilitate development of their own gas resources," he said.
In 2016 the Victorian Government announced it would introduce legislation to permanently ban fracking until 2020, in what Premier Daniel Andrews described as "one of the most amazing community campaigns" in history.
New South Wales introduced CSG exclusion zones in October 2013.
Speaking at the same conference, oil and gas group APPEA chairman Martin Ferguson said prices would remain higher while Queensland was sending gas south.
He pointed to ACCC cost estimates that shipping Queensland gas to Melbourne adds $2 to $4 a gigajoule.
"Even more importantly, the coasts of producing coal seam gas are significantly higher than traditional conventional sources of supply," he said.
"We are all familiar with the absurd situation that the states with the greatest need for gas are also the states which have killed local onshore development.
"New South Wales and Victoria have chosen to abdicate their responsibilities.''