FAILURE to support the development of new gas supplies in NSW will not only hit wholesale prices by up to 32 per cent in the state, it will also result in a reduction of $14.2 billion in GDP over the period to 2035, the industry's peak body has warned.
The Australian Petroleum Production and Exploration Association argues that there is abundant gas to be developed on the east coast but resistance to the development of coal-seam gas would have significant economic effects.
APPEA chief executive David Byers said action on gas resources had been needed almost three years ago but the industry had been stifled by policy uncertainty, policy changes and a lack of clarity.
"The goalposts keep shifting and NSW continues to import 95 per cent of its gas from other states," he told The Weekend Australian.
"There can't be any downward pressure on gas prices or jobs created or country towns revitalised if gas remains in the ground.
"There is a rude shock awaiting NSW businesses and households if supplies of natural gas can't be sourced locally."
The NSW gas issue was the focus of the state's energy security summit this week, when political and industry heads debated the challenges facing the sector.
Ian Macfarlane, federal Minister for Industry, which includes the resources portfolio, was quick to throw his support behind the development of CSG assets in NSW, after highlighting his concerns about the energy crisis facing the state.
He warned that thousands of jobs between Newcastle, Sydney and Wollongong could be lost if the gas crisis was not addressed.
"Men and women who work in the processing and industrial areas relying on gas will lose their jobs if we can't get the gas industry in NSW going," he said after Thursday's summit.
Resistance to developing NSW's gas assets could result in royalties and payroll tax over the period to 2035 being reduced by $1.9bn, according to research released by APPEA.
The industry body also said that if there were no gas developments, then NSW's income would fall by $7.9bn (in net present value terms) over the period to 2035, which equated to $1100 per NSW resident.
Business Council of Australia president Tony Shepherd also weighed into the argument this week, saying that there was considerable uncertainty about east coast domestic gas supply, driven by uncertain CSG policy.
"We should be clear about the size of the problem that confronts us," he told this week's summit.
"NSW demands about 20 per cent of Australia's gas, half of which is consumed by manufacturers and other industry. Meeting this demand in the next five years is the immediate challenge that we must address."
The BCA head said governments needed to streamline and facilitate project approvals in both the commonwealth and state planning and environmental authorities.
He identified two key projects in NSW -- Santos's Pilliga project and AGL's Gloucester project -- which, combined, could supply most of NSW's demand for gas.
"These projects present an ideal opportunity for both the federal and state governments to establish a co-ordinated approvals process to ensure their timely development, subject of course to the necessary environmental requirements," he said.
- See more at: http://www.theaustralian.com.au/business/companies/failure-on-gas-could-hit-gdp-by-14bn/story-fn91v9q3-1226728845573#sthash.YIREYw3S.dpuf
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