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directly and indirectly supports hundreds of thousands of jobs.
Sheadded:“ esectorunderpinsmorethan 1,600 full-time equivalent jobs for every peta- joule [41.68 bcm] of gas it uses. is is impor- tant, because when you look at other industries that use gas, the number of jobs the chemical industry supports is much higher: 80 times higher than LNG, and 150 times more than the gas- red electricity generation sector.”
She said the sector added A$286mn ($194.1mn)ofvaluetoeverypetajouleofgasit used, noting that this was 33 times higher than the LNG industry and 68 times greater than gas- based electricity generation.
She said: “Australians receive A$277mn more in economic bene t from a petajoule of gas that goes through the chemistry industry than they do from a petajoule of gas going to LNG exports.”
While she said the numbers did not mean “these industries are less important to the econ- omy”, her comments suggest otherwise.
She added: “ e [gas supply] crisis is impact- ing investment decisions of companies in the chemistry industry today and future investment considerations, which is a signi cant lost oppor- tunity for Australia. In the current climate of slow economic growth and declining economic complexity, we can’t a ord to lose investment in an industry that makes such a large and valuable contribution to the economy.”
APPEA responds
e implications of Chemistry Australia’s report were not lost on the Australian Petroleum Pro- duction and Exploration Association (APPEA), which was quick to slam publication.
CEO Andrew McConville said Chemistry Australia was trying to turn the discussion on Australian gas into an “us versus them” debate.
McConville said: “Both manufacturing and oil and gas production are key sectors of the Aus- tralian economy. Attempts to compare funda- mentally di erent industries and portray them as being in competition with each other does little to contribute to an important debate. We do not need to choose between the two.”
He added that much of Australia’s increased gas production was the direct result of invest- ments in export projects.
McConville said: “The industry takes its obligations to the domestic market and its role in supplying local manufacturers very seriously. It’s also the case that Australia’s LNG projects will deliver decades of economic growth, jobs and exports in Australia.”
He added: “ is approach of wanting to claim that one industry adds more value to a unit of gas than another is not relevant to what needs to be a sensible and focused debate on how best to develop Australia’s substantial gas resources.
A common basis of comparison, such as dollars per unit of revenue or unit of production, is a far morerigorousapproach.”
APPEA’s head reiterated the body’s long-standing refrain that the best way to reduce gas prices was to raise output.
He said: “ is should be the ongoing focus of all involved in this debate – governments and industry. Working with the oil and gas industry on genuine and long-term solutions to bring more gas into the domestic market is by far the moste ectivewaytoaddrealvalue.”
Understandable concerns
APPEA is understandably worried about Chem- istry Australia’s stance, given the petrochemical body’s report came hot on the heels of a govern- ment pledge to consider a national gas reserve policy as a means of reducing gas prices.
Australian Resources Minister Matthew Canavan and Energy Minister Angus Taylor announced on August 6 that they would review a range of policies in order to come up with options by February 2021 to bring down domes- tic gas prices. ese will include gas reservation, pipeline access and price transparency.
While Read applauded the federal govern- ment’s moves to improve gas supply to domes- tic industries, she added that greater urgency was needed to solve short-term challenges. She added: “Government intervention is necessary to address the dysfunction in Australia’s gas mar- ket, so as not to lose manufacturing capability and further strip complexity from Australia’s economy.”
Read said: “We hope the Victorian Govern- ment will remove the ban on gas exploration and development as it’s hurting manufacturing, especially in the chemistry sector. We urgently need additional supplies of gas to put downward pressure on prices to secure manufacturing jobs. It’s time for state governments to act.”
Both Chemistry Australia and APPEA are on the same page when it comes to state gov- ernments doing more to loosen their upstream restrictions. However, that is a decision that must be made by local authorities, with Canberra una- ble to do more than bring pressure to bear on state governments.
Chemistry Australia’s campaign to promote its sector value is aimed at ensuring that the cen- tral government values gas-based manufacturers ahead of gas producers should upstream reform lobbying fail. APPEA is correct when it says that Chemistry Australia is trying to turn the gas market discussion into an “us versus them” debate; it is the smart move given the media and politicians’ handwringing over local gas prices. If anything, it seems likely that more manufactur- ing groups will follow suit to paint the gas export industry as the villain of the gas crisis, forcing the government to take more aggressive action.™
Week 32 14•August•2019 w w w . N E W S B A S E . c o m P13