29 January 2015
CSG delay to cost $23b says industry
Business has criticised the Victorian government’s decision to hold another inquiry into coal seam gas, saying industry cannot afford to wait until mid-2016 for a decision.
Ai Group Victorian director Tim Piper said companies will decide to move out of using gas, and “question their continued investment and their long-term commitment to Australia”.
“Companies are already being told they will not have secure contracts by the end of 2016 and if we continue to deny the opportunity to explore for gas in Victoria we’re going to have a situation where companies won’t have certainty of supply,” Mr Piper said.
The Australian Financial Review revealed on Wednesday that the new government will hold a parliamentary inquiry into coal seam gas, to report in 2016. The moratorium effectively prohibiting onshore exploration work will remain in place until then.
Mr Piper said if the government stuck to its position, it will cost industry $23 billion by 2020.
Manufacturers such as Dow Chemicals want the restrictions removed.
Managing director Tony Frencham said his company used gas in the Melbourne and Geelong plants to run the boilers and as prices increase – they are expected to double within years because of the impending gas shortage – he cannot recoup the cost.
“Companies make decisions in boardrooms on the certainty they can see, where we invest and what new facilities we do,” he said.
He was supportive that the government was addressing the issue early in their term but said a decision in mid 2016 was too far away.
Australia’s Plastics and Chemicals Industries Association chief executive Samantha Read said the inquiry needed to be swift and efficient, building on the “significant body of work” already completed”.
“We need to be developing the next generation of Victorian manufacturing jobs without delay,” she said.
“There is significant opportunity for an advanced manufacturing sector, enabled by Australian gas and chemistry, to meet unprecedented global and domestic growth. These are exactly the types of opportunities that will drive a new phase of development in Victoria. But this won’t happen without the certainty required for investment.”