The head of Australia's leading building and construction materials company has said that the development of coal seam gas is critical to the future of the national economy.
Mike Kane, chief executive of Boral, told Channel Nine’s Financial Review Sunday the development of coal seam gas will play a pivotal role in bringing down Australia’s exorbitant energy costs, which are impeding the competitiveness of the country’s manufacturing sector.
According to Kane, failure to develop the domestic coal seam gas sector could mean nothing less than the demise of Australian manufacturing.
“Coal seam gas is part of the future recovery for Australian manufacturing,” he said. “If it’s not exploited properly, I think Australian manufacturing has a use-by date attached to it because the inflationary pressures in energy will kill domestic manufacturing through time.”
Boral, which is Australia’s biggest manufacturer of building and construction materials, recently executed contracts in NSW and Victoria which will result in gains in the price of gas for the company of around 20 per cent from this year onward. According to Boral, its gas and energy costs already total around $100 million per annum.
Since assuming the position of Boral chief just a year and a half ago, the US-born Kane has embarked upon a concerted cost-cutting spree. He has reduced the company’s costs by $105 million and retrenched 1000 employees.
Kane’s remarks come just as the Abbott government advances plans to introduce “one-stop shop” approvals for mining projects, in order to reduce the number of administrative hurdles needed to get developments off the ground. The plans are expected to reduce federal government involvement in the process and confer greater authority over environmental decision-making to state governments.
Plans to expand Australia’s coal seam gas industry are not devoid of criticism or controversy. Former federal independent MP Tony Windsor is spearheading efforts to raise public concern about the potential impact on the environment of developing Australia’s coal seam gas industry, while oil and gas company Santos was fined $1,500 in February over leakages from a coal seam gas wastewater pond which left local ground water with uranium levels 20 times greater than those considered safe for drinking purposes.