October 23, 2017 Read More →

Job Cuts on the Way, but Don’t Be Fooled by ‘Gas Crisis’ Spin

Bruce Robertson for the Sydney Morning Herald:

In the next few weeks there will be an announcement that a large, gas-intensive Australian manufacturer is to lay off about 1000 workers. The ripple effects this will have on society will be devastating and most certainly could have been avoided.

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It is likely this news will be made to the backdrop of an opportune reaction from the Turnbull government: there is a gas “crisis” in Australia and workers have lost their jobs because of skyrocketing electricity prices. Either the Prime Minister or one of his ministers will swiftly propose the solution: extract more gas and lift the fracking moratoriums.

What will be strategically left out of this narrative is that onshore coal seam gas has proven to be very high-cost. It is globally uneconomic in a low-cost gas world. We are currently experiencing a massive international glut in the supply of gas that is keeping prices at historic lows. Producing high-cost onshore gas is not going to bring the price of domestic gas down and stop further job redundancies. But it is financially advantageous for the handful of gas companies running this national sideshow – Origin, Santos, Shell and BHP/Exxon.

Job cuts on the way, but don’t be fooled by ‘gas crisis’ spin

Posted in: IEEFA In the News

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