Experts say the Federal Government’s rabid push to increase gas production is likely to benefit gas exporters, not manufacturers.

New research suggests that the Federal Government’s “gas-fired recovery” will not assist Australia’s manufacturing industry.

Australian manufacturing in 2018-19 used just 373 petajoules (PJ) of gas, while more than 4,500PJ went to exports. About 1 per cent of Australian gas is used as feedstock in manufacturing.

In fact, the figures show the gas industry uses more gas just processing gas for export as Liquefied Natural Gas (LNG) than the entire manufacturing industry.

“The Government claims it is trying to create jobs in manufacturing by giving money to the gas industry. In fact, they are just giving money to the gas industry,” says researcher Richie Merzian, Climate & Energy Program Director at The Australia Institute.

“There is no shortage of gas for manufacturing in Australia. The problem is governments are allowing a few global oil and gas giants to export vast quantities of Australia’s more affordable gas, leaving only more remote expensive gas for Australian manufacturers.

“No-one still believes producing more gas will reduce gas prices for manufacturers. Over the last decade gas production tripled, and prices tripled along with it.

“Manufacturing jobs declined for decades when Australia had cheap abundant gas, then continued to decline when gas production tripled over the last ten years. It’s hard to think of a less effective way to create manufacturing jobs than giving money to the gas industry.”

The findings of the Australia Institute study also include;

  • 82 per cent of Australian gas production goes to exports
  • The LNG export industry used 12 times as much gas as the entire manufacturing industry
  • LNG exports employ only 4 workers for every petajoule of gas used, compared to around 760 workers per petajoule used in chemical and mineral processing manufacturing
  • Most manufacturing workers work in sectors that use little if any gas. Three quarters of gas used in Australian manufacturing is used by sectors that employ only 17 per cent of the manufacturing workforce, while 60 per cent of manufacturing jobs are in sectors that use just 10 per cent of total manufacturing gas consumption

The full report is accessible in PDF form, here.