Dow Chemical has announced it will close its plant in Altona.

State faces pressure over onshore gas

June 5, 2019 BY

THE Victorian Chamber of Commerce and industry has urged the state government to lift Victoria’s moratorium on exploration for onshore gas, saying Dow Chemical’s recent decision to close its Melbourne plant was “the worst-case scenario” resulting from high energy prices.

In 2016, the Andrews Labor government permanently banned the exploration and development of onshore unconventional gas in Victoria, including hydraulic fracturing (also known as fracking) – and coal seam gas.

A moratorium on onshore conventional gas will expire in June 2020.

The chamber does not support fracking but has been arguing for some time for increased gas supplies in Victoria to lower energy prices.

Victorian Chamber chief executive officer Mark Stone said more would be lost unless the Victorian and Commonwealth governments brought prices back under $9 a gigajoule, which was “the price at which domestic manufacturers say they cannot compete globally”.

“The Victorian Government needs to act now to stop Victorian businesses from running out of gas and moving their operations out of Victoria.

“Businesses have been warning for years that high gas prices are posing a risk to their businesses. Now, with the news about Dow Chemical’s closure, we are seeing the worst-case scenario start to unfold.

“To avoid more closures, and stem job losses in the manufacturing sector, we are calling for a regulatory regime to manage the risks of individual gas supply projects on a case-by-case basis to be installed instead of the moratorium.”

Dow Chemical said “no single factor” was behind the decision to shut its Altona plant and cited rising gas prices and international competition.

Meanwhile, Environment Victoria believes the state government’s decision to tender for stratigraphic drilling in the Otway Basin is “the strongest indication yet” that the moratorium will not be renewed.

“Daniel Andrews is aiding the gas cartel and locking Victoria into decades more of gas production that will increase our climate impact whilst doing nothing to reduce sky-high gas prices,” Environment Victoria chief executive officer Jono La Nauze said.

“Our government should be focussed on developing an exit plan. We know gas efficiency programs and switching to renewables-powered electricity will save money for homes and businesses.

Drilling more gas won’t make it any cheaper.”