Robert Gottliebsen (“Gotti”) is at it again confusing the debate over Australia’s gas supplies:
With the exception of Western Australia every state in Australia is going to suffer from much higher gas and electricity prices.
Investment in energy using industrial plant will be curbed and consumers will be forced to cut back on retail expenditure because of rising gas and electricity costs. Inflation might break out.
Federal Environment and Energy Minister Josh Frydenberg blames NSW, Victoria, Tasmania and the Northern Territory for virtually stopping gas exploration…
Neither at this stage has grasped the fundamental problem — farmers must be entitled to a share of the revenue for the gas that is under their ground…
When Dow Chemicals chief Andrew Liveris came to the ADC Leadership Retreat in 2014 and later travelled around the country he set out a detailed plan for Australia to avoid the very thing that has happened— gas shortages and higher power prices.
Liveris explained to the nation that we must start by giving farmers rights to substantial revenue from gas found under their land. That way the economics of farms would be transformed and they would become supporters of exploration and development, not opponents.
Liveris explained that Australian experts needed to go into the rural town halls and community centres to explain just how simple and non-threatening “fracking” was…
Australia bristles with opportunity if only the blockages could be removed.
Talk about a selective recollection of events. Andrew Liveris certainly has been a vocal critic of Australia’s gas policy, but not in the way that Gotti describes. Liveris’ main objection is that Australia (outside of Western Australia) does not have a domestic gas reservation policy. You know, the same as they have in the US and pretty much every other energy producer on earth.
Way back in 2013 Liveris warned that Australia risked destroying its manufacturing sector by exporting too much gas to Asia:
Dow Chemicals would open its cheque book for big-ticket value-added manufacturing projects in the country if it could source cheaper gas, which he said should not simply be shipped to export markets without allowance for domestic markets…
Mr Liveris is particularly vocal on energy policy… He is a strong supporter of domestic gas reservation, in which cheap domestic gas supplies help buttress a domestic manufacturing base. The US has seen manufacturing and jobs pick up thanks to the extraordinary gas boom, which has turned US the energy market on its head…
He says despite an abundant supply of gas, Australia has simply let oil and gas majors charge the domestic consumer a world oil price equivalent, which helps kill manufacturing…
And last year Liveris once again urged the Australian Government to reserve some low cost gas for advanced manufacturing:
One of Australia’s most prominent executive exports, Dow Chemicals chief executive Andrew Liveris, says the nation’s economy could be “transformed” if governments took greater action to encourage the supply of low-priced energy to advanced manufacturers.
Mr Liveris, the Darwin-born son of Greek migrants who has headed up Dow for 10 years, used his appearance at a business breakfast in Perth yesterday to renew his call for gas reservation policies that would ensure a supply of cheaper energy for Australian manufacturers.
Rather than burning gas for energy, the economic impact of petrochemicals could multiply by converting them into products such as hi-tech materials…
“Once we can do this, we believe one-third of our economy could be transformed in the advanced manufacturing context… [We could] create a competitive advantage that will take the advanced manufacturing economy of Australia from less than 10 per cent today to over 30 per cent.”
That, he said, would have a knock-on effect on government revenues, with manufacturing multiplying the revenues generated out of oil and gas exports 20-fold…
“For every job in the energy sector, eight jobs are created around it in the supply chains when you value-add.
“For me, this is a no-brainer, it’s low-hanging fruit.”
Unfortunately, Liveris’ advice has so far fallen on deaf ears within the government, which would rather let the “market” sort things out.
In the meantime, every dollar earned from exporting gas to Asia is very likely costing Australia much more in lost value-added local production let alone higher household energy costs.
So much for creating a “clever” and “innovative” economy. How about a “hollowed-out” economy instead:
