The Australian Industry Group (Ai Group) has hit out at the ‘clamp down on gas production’ in New South Wales, and has warned that similar sentiments being echoed in Queensland should ring alarm bells for the industry and broader community.

"Big employing industries are concerned that the already tight gas market could become disastrously short of supply if State and Federal governments don’t tread carefully in responding to community worries about coal seam gas.  Right now we are seeing a domino effect, as one government after another puts roadblocks in the way of resource development under pressure from a public that does not yet see the risks of a gas squeeze,” Ai Group CEO Innes WIllox said earlier this week.

The calls by Mr Willox comes after the New South Wales Government announced exclusion zones to the development of CSG, while Victoria placed a moratorium on new CSG wells.

"Ai Group has been warning for some time that supply is tight and prices are rising due to the looming gas export boom. Many have assumed that high gas prices would encourage more production and prevent an extended supply squeeze.  But this simply will not happen if governments feel obliged to clamp down ever harder on coal seam gas,” Mr Willox said.

"Even higher prices and a permanent supply crunch would result.  That would hit jobs, investment and household budgets, not just in Gladstone and Brisbane but in Sydney, Melbourne and Adelaide. 
"Governments, the community and the media need to weigh those risks in the debate over coal seam gas.  This resource needs to be developed safely; but if it is not developed at all, the costs will come hard and fast.”