WA gas explosion having flow-on effect to small business

Posted by Daniel Palmer on 11th June 2008

Small Business Minister Margaret Quirk has warned that more small businesses could feel the flow-on effects of the gas explosion on Varanus Island.

A major fire at Apache Energy’s gas processing plant last week is responsible for the disruption to supply with large mining and manufacturing companies likely to be the hardest hit. The WA Food Industry Association has also outlined their concerns that the recent explosion may restrict the competitiveness of the food industry with some food and beverage manufacturers having already been affected.

Ms Quirk encouraged small business owners to curb their energy use saying that although supply would resume, at least partially within two months, some businesses – especially those in the mining, resource and building sectors – were already feeling the pinch.

“The gas shortage has directly affected many of the bigger companies. Some have been forced to lay off staff,” she said. “The gas shortage has a ripple effect: It affects electricity supplies and pushes up the cost of alternative energy sources, like diesel, which flows on to smaller businesses reliant on the products bigger companies provide. We are asking operators to cut back on non-essential use wherever possible, to reduce the strain on available gas supplies.”

Ms Quirk added that small business operators needed to have plans to deal with the issue in the coming months. “Small business operators will need to implement contingency plans to tide them over during these times, both in terms of their workload and their energy use,” she advised. “Domestic consumers and small business operators need to remember that gas is used to produce electricity, so it will not help to simply replace one with the other. In addition, production costs may increase where diesel-generated power or electricity is used in place of gas.”

Ms Quirk said several large mining companies and gas-reliant industries had already received ‘force majeure’ notices by Alinta Gas, resulting in the shut-down of operations.

“This is a time for all businesses and households to pull together and conserve energy wherever possible,” Minister Quirk concluded. “The State Government is working closely with industry, the Office of Energy and affected parties to minimise the negative impact of this gas supply shortage.”