AWU Union tells Albanese, Madeleine King to intervene in gas market or risk manufacturing jobs

The head of one of Australia’s largest unions has warned up to 800,000 manufacturing jobs are at risk unless Labor intervenes to bring down gas prices.

Australian Workers’ Union national secretary Daniel Walton has written to Anthony Albanese and federal Labor MPs with an “urgent” five-step plan to curb the cost of gas.

The AWU says manufacturers are being forced to pay as much as $800 per gigajoule because gas companies are passing on vastly inflated wholesale prices.

The spot price has been driven up by Russia’s invasion of Ukraine and the resulting sanctions on Russian gas exports, failures in electricity markets, and cold weather.

The AWU is demanding “binding market intervention” including a cap on the price of gas that would be enforced by the Australian Competition and Consumer Commission.

It also wants a “price trigger” inserted in the Australian Domestic Gas Security Mechanism (ADGSM) to ensure “runaway” prices automatically result in the requisition of gas marked for export for domestic users.

Labor is understood to already be considering reforming the ADGSM so the export trigger can be pulled when prices are high.

The Albanese government is also mulling a shake-up of the gas industry’s code of conduct – which was introduced by the Morrison government – to put downward pressure on prices.

In the longer term, the AWU is calling for a national domestic gas reservation policy – similar to that which exists in WA – which would require a proportion of gas produced in Australia be kept here.

Perhaps more controversially, the union has called for onshore gas resources, including the stalled Narrabri and Beetaloo Basin projects, to be “rapidly unlocked”.

In his letter to the Prime Minister and other Labor MPs, Mr Walton wrote: “Manufacturers today are not bluffing. They know they will not be able to afford gas”.

“I have heard this issue spoken about as ‘intractable’ or a ‘wicked problem’.

“That’s not true. In reality there are very straightforward, well-defined steps that the federal government could take today.”

Mr Walton said Australia was producing “more than enough” gas to service its overseas export contracts and provide affordable energy to the manufacturing industry and households.

“The problem is simply that the gas exporters would prefer to sell all of what they are producing at the highest global rates,” he wrote.

He said the gas industry’s code of conduct and the government’s “Heads of Agreement” negotiated with exporters earlier this month were both “thoroughly insufficient”.

Mr Walton’s letter comes a week after he publicly lashed the Albanese government over its gas policy, accusing it of striking a “dud handshake agreement” with gas exporters.

Resources Minister Madeleine King struck a deal with the three east coast gas exporting giants – Santos, ConocoPhillips, and Shell – to set aside more than 150 petajoules of gas for the domestic market next year.

Australia has been experiencing gas shortages despite being one of the world’s largest producers of liquefied natural gas.

NCA NewsWire has contacted Mr Albanese’s office and Ms King for comment.

Read related topics:Anthony Albanese

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