Claims thousands of Qld jobs ‘on the line’ if gas cap extended
Senator Matt Canavan says extending the temporary price cap on gas will freeze investment and put thousands of Queensland resources jobs on the line.
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The temporary price cap on gas is set to be extended, sparking accusations it will freeze investment and put thousands of Queensland resources jobs are on the line, but Energy Minister Chris Bowen says the move will “take the sting” out of power prices.
The Albanese Government on Wednesday released a draft gas industry code of conduct, proposing to extend the gas price caps until at least July 2025, subject to review.
It is despite previous warnings from the industry that this would have a “chilling” impact on investment.
There are about 31,000 Queenslanders employed in the gas industry, according to the Economic and Employment Contribution of the Australian Gas Industry Supply Chain report released last year.
While the draft called for the $12/GJ price cap to be retained, it also recommended exemptions to be negotiated for suppliers that committed to increase their domestic supply.
Mr Bowen said it was about ensuring “big industrial users and households have access to gas, Australian gas, at reasonable Australian prices”.
He pointed to the initial price cap, implemented for 12 months from December 2022. Modelling last month showed it reduced the forecast retail electricity price increase by $50, with the rise from July now predicted to be $321.
“This was designed to take the sting out of the price rises,” Mr Bowen said.
The draft warned that international gas prices were likely to stay about $20/GJ until at least 2025, with the ongoing conflict in Ukraine.
Senator Matt Canavan said the temporary price cap had already impacted on investment, with the $1 billion Senex project in western Queensland being put on hold, and this just doubled down.
“We should be enjoying a boom in investment in Queensland, but instead there’s an effective freeze due to this policy,” Senator Canavan said.
“There’s thousands of Queensland jobs on the line.
“In the next 10 to 15 years those mines and gas fields will reach the end of their lives and unless there’s new investment, we may have jobs today, but we won’t have jobs tomorrow.”
Australian Petroleum Production and Exploration Association boss Samantha McCulloch said the proposed price cap exemptions had to be applied for annually, with no guarantee that the rules would not change.
“Conditional exemptions may also be varied or revoked at any time. Long-term capital investments for new gas supply cannot be made on the basis of one year of certainty,” she said.
“The extension of the 12-month temporary price cap for at least another two years is at odds with the recommendations from the International Energy Agency, which only days ago made clear that the temporary price cap should not become permanent because investment may be put at risk.”
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