High gas prices will shut down WA industry, Yara executive warns
Yara Pilbara Fertilizers executive, Jai Coppen warned the DomGas inquiry that high gas prices in Western Australia could lead to the deindustrialization of the region.
The economics and industry committee is examining domestic gas supply rules amid a projected significant shortfall within ten years.
Focus has been on LNG exporters and disputes over access to international markets for Perth Basin companies.
Jai Coppen, Yara's senior energy sourcing manager, highlighted that rising gas costs could force reductions in production at Yara, as their fertilizer and ammonia prices are already affected by global market issues. He confirmed predictions by the Australian Energy Market Operator that the industry could decline if gas prices reach $9.50 per gigajoule.
Stuart Nicholls, CEO of Strike Energy, criticized the local gas subsidy policy, arguing that it doesn't improve competitiveness for WA industry and mining, with the real beneficiaries being Yara's shareholders, not the local market.
Coppen also expressed concerns about the vulnerability of the manufacturing industry to disruptions, noting that recent outages at gas facilities had already forced production cuts at companies like Alcoa and Yara. The situation highlights the precarious balance of the gas market in WA.