Inquiry finds expanding CSG mining wouldn't plummet prices
AN INQUIRY into the state's gas supply has found expanding CSG mining would not push down prices in New South Wales.
A report published on Wednesday said prices would triple without government intervention - the result of a booming Asian export market, not a shortage of mining operations.
It said domestic price regulation - including an Australia-wide gas reservation policy - was one of the only ways to ensure prices did not skyrocket.
In a state that imports 95% of its gas from outside its borders, the market's rapid shift towards export is expected to have a major impact on NSW prices.
Four export facilities worth $75 billion are currently under construction on Queensland's coast.
The committee based its recommendations on the submissions of 36 stakeholders, including mining companies, the NSW Government and manufacturing bodies.
The Australia Institute said wholesale gas prices in NSW were historically around $3 to $4 per kilojoule, while Asian prices sat at about $15.
It predicted domestic prices would triple unless the government stepped in.
"Once domestic gas producers can sell onto the international markets, prices in Australia will rise from their historic $3 or $4 to closer to the world price," it stated.
"Eastern Australia's wholesale prices will remain below world delivered prices as gas produced here does not need to be processed and transported.
"Most analysts believe Australian wholesale gas prices will reach $9 per gigajoule."
The NSW Government has been a vocal supporter for ramping up coal seam gas mining to fight a supply shortage and subsequent rising prices.
The parliamentary committee recommended those plans be put on hold until all of the recommendations of last year's Independent Review of Coal Seam Gas Activities in NSW had been implemented.
"This report also argues that the development of the state's coal seam gas reserves will not, on its own, act to address the challenges facing the gas market in New South Wales," the report stated.
"The committee recommends pursuing an Australia-wide gas reservation policy, to assist in containing gas prices and to ensure security of supply."
The Australian Workers' Union submitted that allowing gas export to go ahead unfettered would cost the Australian economy $101 billion and about 235,000 jobs.
Greens MP Jeremy Buckingham issued statement arguing for a shift away from fossil fuels to renewable energy.
"A domestic gas reservation may have been possible as a condition when governments gave the initial approval for LNG exports, but implementing such a reserve now through various state and federal governments will be difficult," he said.