Urgent plea to secure domestic gas supply
Ross Pilling, managing director of chemical company BASF's Australian operations, said federal and state governments needed urgently to keep the supply and price of gas steady or risk further job losses in the manufacturing sector.
"A sustainable future for Australian manufacture of plastics and chemicals is achievable," Mr Pilling told the Plastics and Chemicals Industries Association national conference in Melbourne on Thursday.
"But if governments and industry do not take care of a competitive domestic gas supply, ours will continue to be an industry in serious decline."
But in a divergence from the escalating protests from the manufacturing lobby, including Dow Chemical's Andrew Liveris and Manufacturing Australia's Sue Morphet, Mr Pilling said the PACIA did not call for a "reservation" of gas supply for the local market. Much of Australia's heavy industry relies on gas as its energy source.
"We have vast reserves of natural gas and there is more than enough to both support a vibrant and sustainable chemicals and plastics industry and meet export demand," Mr Pilling said.
But Paul Howes, the national secretary of the Australian Workers Union, did renew his call for a gas reservation policy and said prioritising the export of gas meant "prioritising the interests of oil and gas companies over the Australian economy and Australian workers".
"Australia's current position of 'extract as much gas as possible, and send it offshore as quickly as possible' is, frankly, a ridiculous policy to maintain in an increasingly energy-constrained world," he said at the conference.
Australia is set to overtake Qatar as the world's leading exporter of natural gas and Mr Howes said this nullified its advantage of having vast natural gas reserves - all while US manufacturing thrived on cheap energy from its shale gas boom.
"Australian manufacturing - and especially our chemical and plastics sector - requires all the advantages we can muster to compete in a global economy," Mr Howes said.
The peak body for the oil and gas industry, the Australian Petroleum Production and Exploration Association, has consistently argued against gas reservation, saying it impaired local gas supply and affordability, rather than improve it.
Resources Minister Gary Gray and his opposition counterpart, Ian Macfarlane, have rejected implementing gas reservation policies.
Frequently Asked Questions about this Article…
Leaders in Australia’s plastics and chemicals industry, including BASF’s Ross Pilling, urged federal and state governments to keep domestic gas supply and prices steady. They warned that without a competitive and reliable local gas market, manufacturers could face further job losses and industry decline.
Unstable supply and volatile gas prices can raise costs for energy‑intensive manufacturers in sectors like chemicals and plastics, risking job losses and lower corporate earnings. For everyday investors, that can translate into weaker performance for listed manufacturers and more uncertain returns in energy‑linked sectors.
Ross Pilling, managing director of BASF Australia, told PACIA’s conference that a sustainable future for Australian plastics and chemicals is achievable but depends on governments and industry protecting a competitive domestic gas supply. PACIA did not call for a formal gas reservation policy in the comments reported.
Views are divided. The Australian Workers Union’s national secretary Paul Howes renewed calls for a gas reservation policy to prioritise domestic supply and protect workers, while PACIA did not press for reservation. The oil and gas peak body APPEA opposes reservation, and both Resources Minister Gary Gray and opposition counterpart Ian Macfarlane have rejected implementing reservation policies so far.
Supporters like Paul Howes argue a reservation policy would prioritise domestic manufacturing, the broader Australian economy and workers over rapid LNG exports, helping keep local energy costs and supply more predictable for industry.
APPEA consistently argues that gas reservation would impair local gas supply and affordability rather than improve it. For investors, that position signals potential industry resistance and policy complexity that could affect gas producers’ export strategies and domestic supply dynamics.
Australia is on track to overtake Qatar as the world’s leading natural gas exporter, which critics say risks prioritising exports over local supply. The article highlights concerns that exporting large volumes can undermine the cost advantage needed for local manufacturing to compete globally.
Investors should monitor government decisions on gas reservation or regulation, statements from industry groups like PACIA and APPEA, and commentary from major companies (for example BASF and other manufacturers) about supply and cost pressures. Changes in domestic gas policy or export levels can materially affect energy costs, corporate earnings and employment in heavy industry sectors.
Call 1300 880 160
Start a chat
Schedule a call
