“Some are experiencing difficulties gaining supply; all are, or seem likely to, face huge price hikes that will perhaps permanently damage their businesses.”
Mr Sims pointed out that Australia has a surprising number of industrial companies for whom gas makes up 15-40 per cent of their costs; for many other companies, gas as an energy source is around 5 per cent of their costs.
“At best, it makes it hard for these companies to invest and plan with such high and uncertain gas prices and with considerable supply uncertainty. At worst, plants will close and jobs will be lost purely as a result of the current gas crisis,” Mr Sims said.
“Australia often makes it hard to be involved in manufacturing. We are now making it extremely difficult, if not impossible, for some.”
Mr Sims referred to the April 2016 Inquiry’s description of a “triple whammy” affecting east coast gas supply. First, the introduction of LNG exports tripled the demand for gas; second, oil prices fell faster than the optimistic forecasts underpinning these projects; third, regulatory uncertainty and exploration moratoria have significantly limited, or delayed, gas supply.