Essay by Eric Worrall
“… Australia has a wealth of coal and gas resources as well as renewable energy, so why are energy costs so high …”
Rich in resources, but Australia’s energy costs have tripled and manufacturers are hurting
…
“[The US is] pro-manufacturing, they’ve got cheap energy, they’ve got good gas supply and reserves. It’s one of the most attractive markets to invest today,” he said.
Mr Gandhi said one solution to the problem in Australia is to increase the supply of gas.
But it is already too late for many Australian manufacturers.
“If you start investing today it takes three to 10 years to bring on new gas resources … [and] manufacturers won’t survive [that long],” he said.
…
Plastics manufacturer Qenos went into administration last year blaming the lack of a reliable supply of gas and rising costs.
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The federal government did not respond to the ABC’s questions about a decision, but a statement from a spokesperson for Energy Minister Chris Bowen blamed the coalition for the gas shortfall.
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Bruce Robertson, a former stockbroker and fund manager who is now an independent energy consultant, said Australian manufacturers were “bleeding to death” due to high energy costs.
He blamed the gas export companies operating the export terminal in Gladstone in Queensland.
…
Liam Wagner is an associate professor at Curtin University’s Institute for Energy Transition, researching new technology in electricity markets and how gas prices work in the eastern states.
He thinks manufacturers should focus on alternative fuels like hydrogen rather than hope for government intervention.
…
Read more: https://www.abc.net.au/news/2025-01-13/gas-energy-costs-threaten-manufacturing/104788984
The fact that nobody in government or academia seems to understand the problem, let alone have viable ideas for solving it, is bad news for what is left of the productive sectors of Australia’s economy.
Imposing a gas reserve or export quota on gas companies would at best buy a few years. Gas companies would respond to the increased risk of damaging government intervention by redirecting new gas field development elsewhere. Why should gas companies gamble on Australia’s hostile energy regulation landscape, when they can participate in Trump’s energy renaissance?
As for hydrogen, I’m not going to bother answering that one. Feel free to ask other WUWT commenters why hydrogen is a bad idea, if you genuinely believe this is a possible solution.
Packing up and relocating to the USA or Asia might save some businesses. Though given the growing string of bankruptcies, it may already be too late for many of them.
Update (EW): One of Quenos Plastic Manufacterer’s plants was in Melbourne, Victoria. Quenos relied on gas from Altona Refinery, an adjacent oil refinery. The oil refinery shut down in 2022. This is triggering a cascade of closures of adjacent businesses which piped gas or other petroleum products directly from the refinery, including Quenos.
The Victorian State Government could have acted to ensure a plentiful gas supply for businesses like Quenos, but instead of trying to help industry, in 2021 the Victorian Government added a permanent ban on fracking to the state constitution. This hostile regulatory act likely convinced Quenos and businesses like it there was no hope for a profitable future, which may have been a factor in their decision to close.
When I first read “Atlas Shrugged” I thought the description of cascading industry failures in the book breathed real life into the plot. Now I am seeing it play out in real life.
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