Gas Fired Recovery Only Benefits Gas Industry

New analysis by the Australia Institute Climate & Energy Program finds that using the COVID-19 recovery funding to subsidise the gas industry would create few jobs, increase emissions and lock in higher energy prices.

Key Findings

  • Despite being the world’s largest Liquified Natural Gas exporter, less than 0.2% of Australia’s workforce works in the gas industry, and the companies pay little if any tax.
  • The gas industry is among the most capital intensive, job poor industries in Australia (see Figure 1 below).
  • Subsidising gas will displace lower cost renewables and lock Australia into higher energy prices and higher emissions for decades to come.
  • Recovery funding gives Australian manufacturing with a unique opportunity to shift to electrification of many processes, providing clean, efficient, cheaper and more reliable alternatives.

“Spending recovery funds on a capital intensive, jobs poor industry like gas completely defeats the purpose of a recovery program, virtually any other industry would be likely to create more jobs,” said Richie Merzian, Climate & Energy Program Director at the Australia Institute.

“Australia’s COVID recovery, and the climate, would be better served by investment in renewables—which are far cheaper and cleaner than gas—not squandering public money on a so-called ‘gas fired’ recovery.

“Gas supply has tripled in the last decade and yet domestic gas prices on the East Coast have only increased, evidence that higher gas supply does not automatically equal lower electricity prices.

“Locking Australians into gas by building new infrastructure is short sighted, will end up costing Australian energy consumers more money, and ignores the other crisis at hand, climate change.”

Figure 1: Job intensity of selected Australian industries (jobs per $m sales income)

Source: ABS (2020) 81550DO002_201718 Australian Industry, 2017-18, https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/8155.02017-18?OpenDocument

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Media Enquiries

Anna Chang Communications Director

0422 775 161

anna@australiainstitute.org.au