Call for gas shortfall inquiry PDF Print E-mail
Saturday, 10 November 2012 13:34

The call Friday by the nation’s leading manufacturing groups for an independent inquiry into the looming shortfall in gas supply has been supported by Australia’s gas transmission industry.

“The manufacturers are right, this is a major challenge for policymakers as a shortage of natural gas is expected to cause a dramatic domestic price hike which is likely to be detrimental to many Australian businesses,” Australian Pipeline Industry chief executive Cheryl Cartwright said.

“Gas reservation is not the answer; increasing the supply of gas is.”

However, Ms Cartwright warned that a transparent gas market, while a useful tool, would not increase gas supply or address shortfalls driving the concerns expressed by manufacturers today.

“Increasing transparency through the Short Term Trading Market and the Gas Bulletin Board has not led to increasing the supply of gas over the past few years – and nor will a proposed supply hub being proposed for Queensland,” she said.

“The price bubble is occurring with or without trading hubs. Natural gas is marketed in Australia under long-term contracts, so while trading hubs provide transparency, only a small amount of ‘balancing’ (or left-over) gas is actually traded – this does not increase the quantity of gas in the system.

“The price bubble, that could see the price of gas treble for several years in the eastern States, is being caused by the slowdown in access to coal seam gas.

“Governments have two choices – ensure access to supply to reduce the size of this price increase, or provide temporary assistance to companies that cannot survive until the price settles.

“An independent inquiry would help to resolve this issue.”


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