Due to soaring energy prices because of gas shortage caused by the export of coal seam gas (CSG) to Asia, Queensland residents are clamoring to reserve 15 per cent of the state's gas reserves for domestic use.
India's Petronet LNG Ltd. is about to embark on a fund-raising campaign to gather funds that will support the expansion plans on its Dahej liquefied natural gas (LNG) terminal in the state of Gujarat.
However, CSG producers opposed the clamor because it is unworkable. They, however, promised to lower domestic gas prices.
Taking the side of Queensland gas users is Incitec Pivot Managing Director James Fazzino who criticised Queensland's hand-off policy of allowing the state's gas to be sold offshore only as illogical and short-sighted. Incitec Pivot runs the country's only ammonium phosphate and urea plants which use gas as feedstock. Without sufficient gas supply, the facility would close, Mr Fazzino warned.
He lamented that after 18 months of negotiations with Australian gas companies, only one firm gave an indicative offer to Incitec but is price is five times higher than what American ammonium phosphate and urea plant operators are paying.
"Australia, in contrast, have naively allowed the unfettered export of this resource without regard to the immense opportunity lost in not retaining gas onshore for value adding," Mr Fazzino said in his speech at the American Chamber of Commerce gathering in Australia.
"The U.S. sees its gas reserves as an enabler of value adding and local production in revatilising the economy. We, in contrast, have naively allowed the export of this resource without regard for the immense opportunity lost," he pointed out.
The U.S. Natural Gas Act limited liquefied natural gas (LNG) exports, in the process ensuring supply and local affordability. Because of this policy, U.S. President Barack Obama, in his 2012 State of the Union address, assured that America's supply of natural gas can last almost 100 years.
Due to the concentration of natural gas producers in Australia on the export market, the country is expected to become the number one LNG exporter in 2020. By then it will overtake current top LNG exporter Qatar, which actually provides heavy subsidies for domestic users of its LNG.
Mr Fazzino cited estimated in the 2012 Queensland Gas Market Review that price of natural gas in the U.S. is at $2 to $3 per gigajoule while its estimated forward contract price is as high as $12 per gigajoule in Australia.
He stressed that fertiliser and explosives makers in Queensland would just need one per cent of the total 20 million tonnes yearly natural gas production of Gladstone by 2016.
Mr Fazzino said he is not against gas exports since Incitec Pivot benefits from the global trade.
"Yet a balance needs to be struck to encourage opportunities for local manufacturing growth and for affordable domestic and commercial energy," he said.
To contact the editor, e-mail:
Most Popular Slideshows
- Australia Bids Adieu to Adam Spencer's Mornings on ABC's "702 Breakfast" Show [PHOTOS]
- SEE PHOTOS! Eva Longoria Wears No Panties at Cannes 2013, Revealed in Embarrassing Wardrobe Malfunction [SLIDESHOW]
- Top 10 Hottest Celebrities with Shocking Weight Loss (And Find Out Their Secrets!) [PHOTOS]
- Demi Lovato Snapped Getting Flirty with The X-Factor Boss, Simon Cowell? [PHOTOS]