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Sims told Guardian Australia on Monday it was the wrong way to go. We made our views very clear about gas reservation in our April 2016 inquiry report and the concern is that it might decrease incentives for investment. He said reservation policies deterred new investment. In terms of bigger projects that might service both LNG and domestic, you run a risk of making it harder for them to go ahead, and that doesnt seem to be a terribly sensible thing to do. In his speech to be delivered on Tuesday, Sims says the ACCC had been warning of a looming gas crisis for 12 months. The outlook for gas supply is now even worse than it was a year ago; indeed, our worst fears are being realised, Sims says. His speech warns the scarcity of available gas on the east coast has triggered price increases, and a significant reduction in gas used for electricity generation, which is likely to flow through to significantly higher prices for residential customers. He says Australian manufacturers are exposed. Some are experiencing difficulties gaining supply; all are, or seem likely to, face huge price hikes that will perhaps permanently damage their businesses. Sims says unless action is taken including boosting supply by ending the current state-based moratoria on gas exploration plants could close. Australia often makes it hard to be involved in manufacturing. We are now making it extremely difficult, if not impossible, for some, he will say. He advises the gas companies to look more carefully at servicing the domestic market rather than directing most of their product overseas.
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