The Australian Industry Group has called on Prime Minister Malcolm Turnbull to do more to help local gas buyers with an ongoing shortage on the east coast as a result of new export terminals coming online in Queensland.
In an open letter to the Prime Minister’s office, Ai Group this week pushed for two options to tackle the gas crisis “which we think may be viable and are worth developing further”.
Ai Group proposed a voluntary ‘gas swap’ program, where gas exporters would instead buy cheaper Asian gas on the global market, to free up gas currently earmarked for export for the domestic market instead.
It also pitched for an increase to gas supply.
Encouraging gas swap deals would help counteract an unfair market which has emerged for local buyers, Ai Group said.
“Gas prices are rising significantly above the levels modelled, and they do not reflect export parity but a mismatch between local supply and demand,” the group said.
“With spot gas prices in Japan, Europe and the United States at low levels, Australian gas users do not merely face the loss of a previous competitive advantage in gas, but the imposition of a gas price disadvantage.
“Meanwhile, lower international oil and gas prices have badly dented the market value of the gas exporters, and the associated revenues and GDP benefits appear to be lower than hoped for.
“And high gas prices are greatly worsening price and supply security problems in the National Electricity Market.”
Ai Group said the gas-using industry “strongly supports” the idea of increasing domestic gas production, but noted this solution would take years to impact the market.