The Queensland Resources Council (QRC) is warning the federal government’s gas price cap will only worsen the supply shortages by destroying investor confidence in exploration and development of new gas fields in Qld and Australia.
QRC Chief Executive Ian Macfarlane said such heavy-handed government intervention in energy markets will not end well.
“The only thing short-sighted and misguided strategies like price caps and tax increases will reduce is the incentive for energy companies to invest in new projects in Queensland,” Mr Macfarlane said.
“Less investment means less long-term gas supply in Queensland, and the loss of billions of dollars in investment and thousands of future jobs.
Last year in Queensland, gas companies spent $3.1 billion dollars supporting almost 2500 local businesses and paid $730 million in wages to 4,330 Queenslanders.
“The new price cap has already wiped more than $1.5 billion off the value of energy companies in a day, without adding one single petajoule to gas supplies.
“Companies like Shell, APLNG, Santos, Senex and Arrow Energy have invested billions of dollars in Queensland over decades to produce gas and have all flagged the price cap will negatively impact their operations and plans for future investment.”
Mr Macfarlane said Queensland gas producers are paying the price for policy failures of southern states.
“While Queensland has been developing a mature and well-regulated onshore gas industry, Victoria placed bans on gas exploration and New South Wales has delayed making a decision on new projects,” Mr Macfarlane said.
“The industry has long flagged this will become a problem for Australia, and that’s exactly what has happened.
“The government needs to be aware of the damage a gas price cap will have on jobs across the Darling Downs through to Gladstone, along with nearly 2,500 local businesses and contractors the gas industry supports.
“The Queensland gas sector directly and indirectly supports the jobs of more than 52 thousand Queenslanders and generates over $11 billion of economic activity in the state.
“If the Federal Government really wants to lower energy prices for households and businesses, it should be looking at ways to increase investment in gas projects to build supply,” Mr Macfarlane said.
“Queensland gas producers play a crucial role in balancing up Australia’s energy supply as we decarbonise our electricity supply, but ill-considered policies like a price cap threaten its capacity to continue doing so.
“Families, businesses and industry will be worse off in the long term from a price cap, along with the damage it will cause to the Queensland and national economies.
“The QRC urges the government to rethink its response and instead consider how to increase Australia’s gas supplies to bring down prices.”
