Australian-born chairman and CEO of the Dow Chemical Company, Andrew Liveris, talks with Alan Kohler on ABC Inside Business about the US fiscal cliff and why Australia needs a cohesive energy policy.
“We have to create an infrastructure such that we can have gas-on-gas on competition domestically. If you build the infrastructure, and private sector can do it, and allow shared pipelines, if you build it you will get a domestic gas system and a pricing system that defies the oil gas parity pricing that countries like Australia should never have. If you have the resource in your country, you shouldn’t be paying the highest alternative price of the country that doesn’t have the resource. Why are we paying Japan energy prices when we have domestic gases?”
That is because Australia does not own the gas , the multi national companies do.
Chris, you are not speaking factually. All natural resource extraction is done under licence to extract and to export and royalty payments are mandated by State Governments. Please familiarise yourself with how natural resources are extracted, sold and paid for.
Yet another failure of the Federal Government not protecting the domestic market. Australian’s do own the GAS resource they issue licenses for multi-national corporations to extract it; with out any thought (other than jobs and royalies) protection of the domestic market supply; China & Japan are laughing all the way to the bank!!
You guys both missed the point.
What the CEO of DOW is saying is that the government should intervene and control domestic prices so that locals do not pay the full world price for gas within our borders. He’s right and the same should apply to oil – we produce roughly half our current needs of oil and import the balance. Oil destined for local consumption could be taxed differently so that our price at the pumps was lowered. And one more – the same situation is creeping into our price for seafood like prawns. We make in excess of $30 per kilo for prawns sold off shore so the locals are paying a price that is closer and closer to world prices for prawns each year. At some point this will reach a point where we either pay world price or get NO supply. And the shame is that the prawns are Australian – not farmed in Asia. Globalisation in world trade only works for the multi nationals – not for the people of our country.
I think he was saying that government needs to foster local competition to drive down prices. Not sure how well this would work with prawns, but the stronger aussie dollar may help.