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Gas price spike a major blow to Gladstone industry

GLADSTONE industry could pay an extra $2.9 billion for gas in the next decade as LNG export drives up prices, a new report has claimed.

Independent think tank The Australia Institute said the cost blow-out would see businesses shut down and jobs disappear in the region.

Report author Mark Ogge, who will address the Gladstone Conservation Council on Tuesday night, blamed the price spike on poor state and federal government planning.

"It's a failure of economic management, approving so many massive projects to be built simultaneously," he said.

The report describes Gladstone as Queensland's most important industrial region, and said it was "ironic" that our LNG boom would drive up local gas bills.

"The massive flow of gas into Gladstone for export via Curtis Island will lead to billions of dollars of increased costs for these industries," the report said.

It said this cost came on top of a skills shortage driven by LNG construction.

"Allowing even more resource projects to go ahead at this time will exacerbate the impacts already being felt by these industries and businesses, and lead to more business closures and job losses," the report said.

Gladstone Industry Leadership Group chief Kurt Heidecker declined to comment on the possibility of job losses, but agreed the cost blow-out came at a tough time.

"We don't have that option of reducing or not using gas, and it makes it particularly difficult as the price of commodities globally is at historic lows," Mr Heidecker said.

"Some industries have negotiated long-term (gas) contracts - but there is more competition in the market for gas."

The peak body for oil and gas slammed the Australia Institute report, saying "the suggestion that a new $60 billion export is bad news for Queensland is astounding."

Australian Petroleum Production and Exploration Association director Michael Bradley said even once the Curtis Island plants were operational, 69% of revenue would stay in Australia.

"The Australian economy benefits when producers export goods and services at world prices," Mr Bradley said.

Mr Ogge said the gas boom was driven "overwhelming by foreign companies", at the expense of long-term industries.

Mr Ogge's presentation is at the Heron Room at the Grand Hotel, from 7pm.

Topics:  gas, gladstone, gladstone conservation council, industry, lng




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The improvement would be mild when compared to past cycles