The Australian Financial Review revealed this morning that the AWU had struck a cross-factional alliance with the Construction, Forestry, Mining and Energy Union to pressure Shorten to back greater controls on LNG exports and create a national gas reservation.
The newspaper said that AWU national secretary Scott McDine would tell the ACTU Congress today that the lack of a national reservation policy was "perhaps the most egregious modern example of our government selling out the interests of Australian workers for the benefit of private profits".
"We are allowing foreign gas companies to come here, extract the gas that belongs to all of us and then sell it back to us at the same price a country with no gas is forced to pay," he said.
"I believe this represents a fundamental injustice and a fundamental betrayal of ordinary working Australians.
"It's a disgrace that our nation's decision-makers have prioritised the interests of multinational gas exporters - and abstract ideals about a theoretical free global gas markets - over the interests of Australian workers."
Australian Petroleum Production and Exploration Association acting CEO Paul Fennelly fired back this morning, saying the AWU's push will achieve little and will make all Australians - including Australian workers - poorer.
"If you want to kill off investment, kill off jobs for workers and drive up the gas price for manufacturers, then the measures prescribed by the AWU are an excellent way to go about it," Fennelly said.
"1950s policy solutions won't bring more gas to market or reduce costs for our manufacturing sector. It's strange the AWU is pursuing a policy that does not have the support of major manufacturing groups.
"There are important lessons to be learnt from other countries - as well as an Australian state that has pursued a protectionist policy that has proven to be a poisoned chalice."
This view was reinforced at last week's APPEA Conference, where gas producers noted that Western Australia's gas reservation policy was a factor in driving investment away from the state and a deterrent to bringing on new domestic gas supplies.
"Both the 2012 and 2015 Energy White Papers found that rather than increasing domestic gas supply, reservation would discourage new market entrants and would reduce supply competition, ultimately leading to higher prices," Fennelly said.
"As the Productivity Commission also found in its recent review of the gas market, such a policy would reduce the welfare of all Australians by up to $24 billion over the period to 2032.
"That would leave all Australians, including Australian workers, $1000 per person worse off."
He said the AWU's continued insistence that Australia was the only country that did not have a reservation policy was false.
"Countries such as the USA, Canada, the Netherlands, Norway and the UK allow the market to set wholesale gas prices, just as we need to in Australia," Fennelly said.
"These nations do this for a very good reason: gas reservation actually makes worse than the situation it is supposed to fix - by reducing the very investment needed to bring on new, or cheaper, supplies.
"At a time when governments are seeking to increase the competitiveness of the Australian economy and attract new project investment, gas reservation is the antithesis of the policy response most in the business community are looking for.
"Reservation doesn't work, and that's probably why we don't do it for any other commodity such as iron ore, wool, wine, wheat or beef.
"We would encourage the AWU to join the nation's major manufacturing industry groups, which are advocating for the development of onshore gas resources in NSW and Victoria to bring on new supply and enhance energy security."
