Earlier this year I visited the Qenos plastics manufacturing facility in the southern suburbs of Sydney at Botany.
The factory supports more than 300 Sydney jobs and demonstrates that Australia can house world-class manufacturing facilities that provide high paying and rewarding employment. That factory, and those jobs, are here in Australia because we traditionally have had secure access to resources such as gas, which is a key input to making plastics.
Our historic domestic gas and petroleum fields are dwindling, however, and we need to develop more gas resources if we want to keep these jobs.
At the moment, NSW imports 96 per cent of its gas needs from other states. Without a new gas field being developed, NSW will rely completely on imported gas within five years. In the Narrabri area of central northern NSW, gas could be developed which would supply more than half of the state’s gas needs.
This gas would lower gas prices and secure jobs across the state. The project would also create 1300 jobs during construction, 200 ongoing jobs, and yield royalties to the state government of $1.2 billion. More than one million homes and businesses in NSW use natural gas.
More than 15,000 industrial jobs in the state directly depend on gas supply, with a further 2.5 million people employed by companies that use natural gas.
With these obvious benefits on the table, in 2014 the NSW government announced that it would “fast track” development of the Narrabri gas development.
Unfortunately, in the four years since nothing has progressed. This is despite Santos, an Australian gas company that wants to develop Narrabri, being ready to go.
The inaction in NSW has caused the federal government to take the unprecedented action of introducing the ability to redirect gas exports for domestic use.
Our action has helped lower domestic gas prices by 20 per cent and prevent a shortfall of gas emerging.
However, it is costly to move relatively expensive coal seam gas from Queensland to elsewhere.
A recent ACCC report confirms customers in NSW and Victoria are paying more for their gas because of state government restrictions on developing local gas resources.
Importing gas from Queensland adds $2 to $4 per gigajoule to retail prices in the southern states.
A more sustainable option would be to develop NSW’s own gas resources to maintain its supply of gas and a strong manufacturing sector. A strong manufacturing sector helps the whole economy as well.
Manildra Group’s site near Nowra is the largest processor of wheat in the world and employs 400 people.
As well as being a large user of gas, it supports more than 4000 NSW farmers by buying their grains and sugar which are made into 15 different food and industrial products.
Developing our gas resources is essential to support manufacturing and farming jobs. That creates more wealth for all of NSW.
Matt Canavan is the federal Minister for Resources and Northern Australia