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Energy close to point of no return

A Glencore senior executive has warned Australia could be nearing a “tipping point” if it doesn’t sort out its gas and energy crisis for industry.

Glencore coal boss Peter Freyberg made headlines this week with a tough assessment of Australia’s gas environment, which has seen major industrial gas buyers forced to accept unaffordable prices in recent months.

Gas buyers are competing with increased demand from the trio of LNG export terminals opened in the last two years at Gladstone, on Queensland’s central north coastline.

Meanwhile, new gas exploration and developments have been hampered by official and unofficial bans in several key states.

The result is higher, and less reliable gas prices – bad for major buyers, such as Glencore, which uses gas energy in its copper mining and production program in Queensland.

“We have to meet Australia’s energy needs now, in five years, 10 years and 15 years,” Freyberg was quoted by Fairfax this week.

“We can’t rely on blue-sky thinking.”

Freyberg said that despite all its energy commodity wealth, Australia was on the precipice of losing major industrial companies to other countries as a result of market mismanagement.

“There is an energy crisis in the world’s largest exporter of coal, the second largest exporter of gas and a major exporter of uranium,” Freyberg was quoted as saying.

“We need real solutions. Unless we make decisions really quickly, and I mean in the next 12 months, that re-establish base-load capacity then we have no chance of sustaining the economy in the shape that it is in now.

“In the end the market will work its way to balance … it will stabilise – but the wrong way for the wrong reason.”

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