Gas shortage and high prices threaten ‘tens of thousands’ of Aussie jobs – and our nation’s food security

Rising gas prices are forcing some local companies to shut up shop, as concerns escalate that a looming energy shortfall could result in ‘tens of thousands’ of job losses.

The looming gas shortfall threatens “tens of thousands” of jobs and Australia’s food security, manufacturers warn.

Makers of everything from bricks to chemicals are paying as much as four times more for gas than in other comparable nations such as the US.

These high prices have already led local operators to shut up shop and ship offshore.

Fears are mounting that without immediate action to boost supply, the exodus will gather pace.

“This isn’t a risk that is on the horizon, this is a risk that’s acute and it’s here and now,” said Manufacturing Australia CEO Ben Eade.

Manufacturing Australia CEO Ben Eade says the ability to make things could be impacted by a gas supply shortfall. Picture - Supplied

Australia’s food security and its ability to make complex things were threatened, he added.

“It would be absolutely in the tens of thousands of roles that are at risk,” Mr Eade said.

About 37,000 people have jobs employed in plastics and fertiliser businesses, which at the moment, can only be made with gas; another 30,000 work in companies reliant on gas for high-temperature production.

Gas provides 37 per cent of the energy used by Australian manufacturing, which employs nearly one million people.

Earlier this year, Australia’s only maker of polyethylene, Qenos, went into administration citing high gas prices. It had plants in Sydney and Melbourne.

And last year, Newcastle’s Molycop cut 250 jobs when it quit steelmaking due to pressures including rising gas costs.

Wholesale gas prices quadrupled between 2012 and 2023.

Mark Ellenor, CEO of Australia’s largest brick manufacturer Brickworks, told this masthead its gas costs in Australia have risen about 200 per cent over the past six to eight years.

“It’s been the biggest cost increase in our factories in the last decade,” Mr Ellenor said.

The price Brickworks pays for gas here is about four times higher than it is charged in the US, where supply is plentiful.

“It will come to a point where everything is just imported due to the uncertainty of supply, long-term contracts and the cost.”

Qenos CEO Stephen Bell at the Olefins plant at Altona in 2022, before it collapsed into administration due to high gas prices. Picture: Nicki Connolly

The Australian Competition and Consumer Commission has raised the alarm on a gas shortage in the eastern Australian market from 2027. The eastern market covers NSW, Victoria, Queensland, Tasmania, South Australia and the Northern Territory.

Victoria and NSW in particular face a capacity crunch.

Gas industry leaders including transmission pipeline giant APA Group’s CEO Adam Watson say they want to provide more supply but need politicians and regulators to stop delaying project approvals.

Mr Watson said manufacturers were depending on more supply coming into the market. Many had no other energy option, he said. And their viability was on the line.

“One of the reasons we are advocating for the role of domestic gas is that it is the way to keep industry going in Australia which translates into keeping jobs in Australia,” Mr Watson said.

According to APA, industry consumes about 90 per cent of gas used in Australia. The rest is for household heating and cooking.

Originally published as Gas shortage and high prices threaten ‘tens of thousands’ of Aussie jobs – and our nation’s food security