En­ergy plan des­per­ately re­quired

Dairy News Australia - - OPINION -

If only far­m­gate milk prices would rise as quickly as en­ergy prices. A re­port from the con­sumer watch­dog has con­firmed gas prices will con­tinue to rise as Aus­tralian com­pa­nies pref­er­ence in­ter­na­tional spot mar­kets. Aus­tralian farm­ers, see­ing mod­est in­creases in far­m­gate prices at best, will cop a dou­ble hit from this price surge, as gas is re­quired to pro­duce elec­tric­ity; and pro­ces­sors will seek to re­cover ris­ing gas prices through lower far­m­gate prices. The ACCC has de­scribed the sit­u­a­tion as se­ri­ous and that op­tions to ad­dress the prob­lems in the im­me­di­ate term are lim­ited. The Fed­eral Gov­ern­ment has im­ple­mented the Aus­tralian Do­mes­tic Gas Se­cu­rity Mech­a­nism (ADGSM), which al­lows for the re­stric­tion of LNG ex­ports in an ex­pected short­fall year, with the aim of di­rect­ing those sup­plies to meet do­mes­tic de­mand. How­ever, more needs to be done to find a longterm so­lu­tion. State gov­ern­ments on our east coast can help. There are five gas sup­pli­ers in Western Aus­tralia, and prices are com­pet­i­tive as a re­sult. The ACCC’s call that more sup­pli­ers are needed in the south­ern states, and that blan­ket mora­to­ria should be re­moved, mir­rors that made by Sa­puto ear­lier this year. In a sub­mis­sion to the ACCC, Sa­puto warned that the cost of gas for its Al­lans­ford plant will in­crease by 50 per cent from 2018 due to “gov­ern­ment pol­icy re­strict­ing gas ex­plo­ration”. The Vic­to­rian Gov­ern­ment has placed a mora­to­rium on con­ven­tional gas ex­plo­ration un­til 2020. This should be im­me­di­ately re­viewed as con­ven­tional gas ex­plo­ration does not have the same con­cerns as un­con­ven­tional gas, also known as hy­draulic frac­tur­ing (frack­ing). The same ur­gency is re­quired in South Aus­tralia — where farm­ers are re­turn­ing to diesel gen­er­a­tors to avoid power black­outs and rein in costs. The SA Gov­ern­ment is in a mud­dle — ris­ing power costs but no in­cen­tives for farm­ers to tran­si­tion to so­lar or wind. Fed­eral and State gov­ern­ments need to pro­duce clear en­ergy poli­cies de­void of po­lit­i­cal point scor­ing to get Aus­tralia out of this mess. Un­for­tu­nately, we’re not con­fi­dent they will un­til it’s too late.

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