Labor MP Ed Husic, who was very strong on building up Australia’s manufacturing industry while he was industry minister – and who since being dropped from the cabinet has been making his views known on gas and other issues he thinks need more attention, has also dropped by the ABC’s Afternoon Briefing studio.

Q: We heard from Mark Vassella, the CEO of BlueScope Steel, saying a gas reservation policy is needed and other heavy industries say the same. I know a gas market review is under way. It is east coast reservation policy inevitable, something you have to do?

Husic:

I think so. If you look in the last decade, gas demand has fallen 20% and yet we are paying extraordinary prices for an Australian resource.

Australia averaging is $10 a gigajoule for gas. In Qatar you can get of a for $2.20 and in the US for $3, what BlueScope Steel pointed out today.

Part of the recent prices are so high is because we export a phenomenal amount of gas and a lot of foreign multinationals who are on a great deal do not want to have us get access to the uncontracted gas. We want to be able to get that as part of a reservation plan.

The other important point that people need to understand as well is we will have foreign buyers intervene in our market saying do not touch the gas arrangements, yet some of these countries are on selling the very gas they get from us, so Japan, for example, has on sold between 600 to 800 petajoules of gas, nearly double what we use on the east the coast.

Q: Yet knowing that Resources Minister Madeleine King has given a speech given great assurance to the Asian markets Australia is a secure partner for other Asian nations to seek energy security from which seems to suggest she does not want to interfere in any of the existing arrangements we have with those companies from places like Japan which are historically some of our biggest buyers of LNG.

Husic:

Yes and I think most Australians would think if you are buying that gas for your own use, we totally respect the need to hold a contract. But if they are on selling at a phenomenal rate to South Korea and Taiwan, for example, where some of the markets they are on selling to, nearly double what we use on the east Coast and we are paying incredible prices as a result, that is not good.

Q: Do you want a limitation on what buyers can then do with the gas they buy?

Husic:

The other point is this is not a one off. Japan has done this four consecutive years in a row where they have on sold Australian gas while telling us we should not have a right to intervene. My view is Australia needs to assert itself and we should have mechanisms like use it or lose it mechanisms. They are not using it for themselves and just profiting which is exactly what they’re doing, profiting from that gas while we are struggling and we have manufacturers like BlueScope Steel, Dulux and others trying to get access to competitively priced gas. That is an issue and we should assert ourselves.

Q: Should that be imposed on existing contracts because a lot of these are long-term contracts that will run for many years. Should that be imposed on contracts in place the now?

Husic:

I absolutely think if foreign buyers are not using it for themselves and are simply using it to make money by on selling it, we should have a mechanism to intervene.

We cannot have a situation where Australian manufacturers are put under such pressure because of the state of gas pricing. Interventions we have tried here, even the ACCC has redoubtable working, the gas trigger, gas code, heads of agreement, two times now the ACCC said we do not see evidence that is working. We will have to take a stronger stand and my view is the country, if it is serious about manufacturing capability, if we said we learn the lessons of the pandemic and needed to build capability, we need to take a stand to get access to a resource that should confer on us commercial and economic advantage.

For some reason, and I end on this point, for some reason we always seem to be browbeaten easily by either the foreign multinational set up approach setting up the contracts or by foreign buyers making money by answering the gas and we think our national interest [should] take a backseat …and despite having sand kicked in our face when we should be asserting; this is an Australian resource, our gas, our price should be the [set by us].