Industry Minister Ian Macfarlane says the federal government won’t introduce a national gas reserve, adding that NSW faces gas shortages and higher prices.
The federal government has ruled out introducing a national gas reservation policy, labelling it “ideological claptrap”.
Industry Minister Ian Macfarlane says household gas prices in NSW are likely to rise as the nation’s most populated state faces a gas shortfall in 2016.
He says it’s up to the NSW politicians to stand up to anti-coal seam gas (CSG) activists who have delayed important domestic gas projects.
“There is no good reason for reservation policy. It is ideological claptrap,” Mr Macfarlane told reporters on the sidelines of the APPEA conference in Perth on Tuesday.
“You haven’t got the gas in NSW to reserve and in Western Australia, if you ask anyone they’ll tell you it’s corrupted the market and affected supply.”
He said the federal government would destroy the nation’s sovereign risk profile if it prevented the export of unconventional gas from Queensland or tried to control the price of domestic gas.
“In the end, this is a NSW issue. There’s not much we can do and there’s not much we’re prepared to do.”
Mr Macfarlane said he was unsure how NSW would meet demand without pushing ahead with CSG projects.
However, he said, the government would “see what happens” in relation to providing assistance to manufacturers.
The minister confirmed NSW households would pay more for gas but said there was unlikely to be shortages this winter.
He also predicted offshore floating LNG projects would ramp up alongside existing large onshore projects in WA, Queensland and Darwin.
After significant delays, Mr Macfarlane urged Woodside Petroleum and its partners to push ahead with its Browse floating LNG project.
“We need to get on with Browse. We lost a lot of time on James Price Point,” he said.
Meanwhile, Santos Vice President of Eastern Australia James Baulderstone said 100,000 manufacturing jobs on Australia’s east coast were at stake as 45 per cent of the industry relied on gas.
“If we can’t get sufficient supply, particularly supply in NSW – the only state that effectively doesn’t produce any gas at the moment – there are severe consequences,” he said.
An inability to supply gas would ultimately affect people’s standard of living, he said.