Sims: gas producers have power to provide market relief

Australian Competition and Consumer Commission (ACCC) Chair Rod Sims has blasted gas producers, saying they haven’t done enough to secure Australia’s gas supply.

Speaking at the Australian Domestic Gas Outlook Conference, Mr Sims said after the ACCC began investigating, the market producers had complained about government intervention to divert gas back from exportation to domestic supply.

“The market was clearly, by any definition, dysfunctional,” said Mr Sims.

“In my strong view they [the gas industry] brought it on themselves.

ACCC Chair Rod Sims

“I have absolutely no sympathy for them, they should have been paying more attention to what was going on in the market.

“Some of the comments I got were ‘we didn’t know the market was short’. Give me a break.”

High gas prices on the east coast have continued to put pressure on manufacturing and industrial businesses, such as fertiliser and explosives maker Incitec Pivot, who is struggling to maintain economic feasibility for some of its operations.

Both the ACCC and EnergyQuest have repeatedly warned that continually high prices will cause businesses to fail or move away from the east coast, and Mr Sims said the gas industry had previously denied this possibility.

“We’ve got to all remember when the LNG projects in Queensland were being commissioned, they promised this current crisis would not happen,” he said.

“I remember suppliers assuring the Queensland Government that investment in gas exploration and development would be timely, that a reservation policy in the east coast was not required and that businesses would be protected and their futures secured.

“If more businesses start to fail, and I believe they will, pressure will inevitably ramp up on governments to do more. That’s just reality.”

Mr Sims said gas producers were the ones “best placed” to provide assistance to the manufacturing sector and help avoid more business closures.

“The east coast of Australia is just about the only region in the world that has both gas exports and a liberalised gas market,” he said.

“It should be a privilege for gas producers to operate in a country that embraces a free market but that privilege should not be taken for granted.”

If you have company news you would like featured in Gas Today contact Assistant Editor David Convery at dconvery@gs-press.com.au

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