“I find it very strange to hear gas producers complaining about government intervention when their lack of attention to the domestic market brought it about.
“They wouldn’t be at netback without the government intervention, so who’s fault’s that?”
Mr Sims urged the big gas companies to pay more attention to the domestic market and make gas available to consumers and manufacturers locally.
Of particular concern was the risk to manufacturing plants, many of which were citing high gas prices as their main source of revenue pressure.
The recent collapses of Queensland-based brickmaker Claypave and NSW coffee cup makers RemaPak were blamed on the price of gas, which the ACCC noted in its report would hit $11 per gigajoule this year.
Mr Sims said once those companies closed, they wouldn’t be replaced, and suggested a level of $7 per gigajoule as a sustainable target for both industry and customers.
“I’d be surprised if there wasn’t a lot more [company collapses] to come if we don’t get those prices down,” he said
“If a plant is closing because they need $4 gas, well that is a real shame but I’m not sure what we can do about that.
“But if a plant is closing because it needs $7 gas and it’s being offered $11 gas then that is a real tragedy.”
Santos boss Kevin Gallagher acknowledged there was an issue with the gas price, but insisted greater access to gasfields would increase supply, which would then drive the cost down.
“I’ve a degree of sympathy for the manufacturers because this happened very quickly,” Mr Gallagher said.
“We were all caught out by the speed at which the market changed on the east coast.
“But we do know supply will bring cost down; if there’s more supply coming into the market than demand that will drive down the marginal cost.”
He said in particular the development of the gasfield at Narrabri in NSW would allow more domestic supply which would drive down costs in southern states.
Queensland has announced a raft of gas exploration projects and currently exports gas to other states, but the cost of transport is keeping costs high.
Energy Minister Matt Canavan said he believed a source of gas in southern states would relieve much of the price pressure, and called on the Victorian Labor government not to extend a moratorium on new gas projects after 2020.
“My understanding is it would require action from the Victorian government to continue and I would just urge the Victorian government to let common sense prevail here,” Senator Canavan said.
“If they don’t, they have to be held responsible for any manufacturing job losses that result because of that decision.”
Stuart Layt covers health, science and technology for the Brisbane Times. He was formerly the Queensland political reporter for AAP.