Transcript: APPEA Chief Executive Samantha McCulloch discusses gas market pricing
12 December 2022
Doorstop
Samantha McCulloch: The reforms announced by the government on Friday evening fundamentally dismantle the efficient operation of Australia's gas industry. It goes well beyond a temporary price cap and includes indefinite regulation into the prices in the Australian gas market.
This is going to have a chilling effect on future investment in supply, and it's that new investment in supply that is actually the key to bringing down prices for Australian households and Australian manufacturing.
Reporter: In the mandatory Code of Conduct, the framework released by Treasury, it says reasonable price, are you seriously suggesting you want to impose an unreasonable price gas?
Samantha McCulloch: Well, it's a regulated price concept that will be administered by the ACCC. It doesn't reflect the risk profile of the industry. This is an industry that spends billions of dollars before any money is made, so a regulated price is not going to be conducive to new investment in supply.
Reporter: Are you speaking to the Crossbench and Coalition about your concern with this legislation and asking them not to support it, and so on?
Samantha McCulloch: We're speaking to all stakeholders. This is far-reaching reform that will have long-term consequences for Australia's energy security, and for our gas industry and the 80,000 jobs and workers that are employed the gas industry.
These are considerable reforms that really need adequate consultation, with stakeholders including the gas industry.
Reporter: Can you confirm you're planning a $20 million campaign against these reforms, and if you are don't you think that could be seen as out of touch, given how many people are struggling right now?
Samantha McCulloch: All options are on the table, this is an industry which has invested $400 billion in the Australian economy over the last decade and what we're seeing now is a government changing the rules of the game with alarming frequency. So, as an industry we'll be looking at all options in regards to these reforms.
Reporter: Inaudible.
Samantha McCulloch: Let's break that down actually, the price of gas, let's distinguish between the domestic market and the export market. Domestically, and when we're looking at the wholesale market, where the caps are going to be applied, most gas is sold under long-term contracts and the average price being struck in those long-term contracts is around $12 a gigajoule.
