As the price of gas is set to treble, Maryvale pulp and paper mill is not happy. They are the state’s biggest gas user, burning an astronomical 18-30 TJ of gas per day. The average household uses in a year, 0.055% of what this forest pulping enterprise uses in a day! .
At a Grattan Institute talk last month (Oct 2014) Brian Green, ex-SECV and now Australian Paper’s energy manager, said he has been unsuccessfully trying to negotiate a deal with gas producers for over a year.
Gas prices will increase sharply to match the international price for gas once the export facility at Grafton in Queensland opens next year and goes into full production from CSG and other unconventional gas sources. This will make Australia the world biggest gas exporter, overtaking Qatar.
For households, the biggest part of the bill is distribution and retailer charges. For industry, the biggest percentage of the bill is the cost of the gas itself. So industries’ power bills will go up more than household bills. Auistralian Paper estimates it would add an additional $30-40 million onto their energy costs nnually. It claims their profits are already marginal. This could be the blow that the paper mill’s owner, Nippon, needs to close this forest devouring loss maker down.