TRACY BOWDEN, PRESENTER: With 5,000 job losses announced since the Abbott Government swept to power in September will pale by comparison to what lies ahead according to major Australian manufacturers.

They say more than 100,000 jobs will soon be lost unless the Government intervenes to solve a looming energy crisis.

A gas shortage that is already pushing up gas prices for households and heavily job-laden industries.

Strangely, Australia meantime is on track to become the world's largest exporter of gas in the next few years. So what's going wrong ask what needs to be done about it?

Greg Hoy reports.

GREG HOY, REPORTER: This CSR factory at Ingleburn in Sydney is preparing to pull down its huge old chimney stack.

ROB SINDEL, CHIEF EXECUTIVE, CSR: Well, it is a historic day, it's also a sad day. This plant was built in the 1980s.

GREG HOY: After 30-odd years melting raw materials to make glass, this factory is shutting shop and retrenching its 150 staff, mostly because of its energy bills. The cost of gas, the lifeblood of this smelter has tripled.

ROB SINDEL: Factories like this, they just can't support that additional impost. For the people here it's the saddest part because if you thing about the 150 people who worked here, it's not only their jobs, those 150 people supported a family, they supported a community, they were part of the local soccer club and now they're out looking for employment.

GREG HOY: Just some of the collateral damage the company says of Australia's burning ambition to become the world's biggest exporter of gas, supplying fuel-starved Asian markets that will pay triple what Australians do for energy, a bonanza for gas producers.

DAVID BYERS, PETROLEUM PRODUCTION ASSN, APPEA: It's a big opportunity for Australia. This is destined to be a huge boost to Australia's GDP over the next 20 to 25 and beyond - years and beyond.

GREG HOY: But manufacturers say there's a down side that's being ignored.

ROB SINDEL: One of the issues for Australia is we've agreed to triple our gas exports. Nobody quite understood that that would mean there wouldn't be enough gas available, post-2016, to support local industries like this one.

SUE MORPHET, CHAIR, MANUFACTURING AUSTRALIA: We've got major companies that have survived the GFC that are now really under pressure to move their manufacturing offshore.

GREG HOY: Sue Morphet, chair of Manufacturing Australia, warns the consequences for the economy will be dire.

SUE MORPHET: It could cost our GDP about $28 billion and 100,000 direct jobs plus all the indirect jobs for people who service the manufacturing sector.

GREG HOY: The head of global chemical giant Dow, Andrew Liveris, is one of Australia's most successful business exports. Born in Darwin, he is now co-chairman of Barack Obama's advanced manufacturing partnership and chairman of the US Business Council.

ANDREW LIVERIS, GLOBAL CHAIRMAN, DOW CHEMICAL: Our Dow Australia factories here in Melbourne are seeing a doubling of gas prices when our contract expires here this year which is going to render them pretty uncompetitive.

GREG HOY: These huge new export facilities in Queensland are being constructed to service massive export licences which were granted on the understanding they would source new supplies of coal seam gas but they haven't found enough CSG. This, manufacturers say, is leading to shortages in their traditional gas supply. Gas exporters deny they're eating into local supply for manufacturers.

DAVID BYERS: It's coming primarily from the CSG fields in Queensland.

GREG HOY: But, with respect, that's rubbish, isn't it, because the industry itself says these exporters do have a shortfall in gas and they're buying up domestic supplies as fast as they can to fill that shortfall.

DAVID BYERS: There's not a shortfall at the moment because the projects haven't ramped up the to full production. They're still under construction.

GREG HOY: Manufacturers say, however, big gas producers are already hoarding gas in preparation for exports. Gas producers deny this and say it's just a smokescreen.

DAVID BYERS: The market is working. What we have, however, from Manufacturing Australia, particularly, is essentially quite a protectionist proposal which is trying to have gas supplied at preferred prices, lower prices, cheap gas into one industry sector at the expense of the gas production industry.

GREG HOY: Gas producers say that you're effectively lying or, at best, exaggerating and that you're simply trying to drive down the cost of gas.

ANDREW LIVERIS: Why should Australia pay Korea and Japanese prices for its domestic gas? The Australian domestic consumer should see the benefit of abundant supply. It's not a question of who's telling the truth and who's not, I ask anyone to look that facts of domestic markets around the world.

GRANT LUKEY, COOGEE ENERGY: In Australia it means we're right on the cusp of the entire country losing a huge investment wave in the chemical sector.

GREG HOY: Australian businessman Grant Lukey is also searching for a factory site in America. Back home in Victoria, his company, Coogee Energy, makes methanol, a cleaner transport fuel. The Chinese simply can't get enough of it so Coogee is about to build a billion-dollar plant but must build it in America to get enough affordable gas.

GRANT LUKEY: Australia no longer is that attractive and it's particularly around the changing dynamics of the gas market.

ANDREW LIVERIS: In the United States they've also got rules, for example on oil, that they should not export any of their oil. On gas, the department of energy, by rule of law, has something called the public interest. It will not export gas if it's not in the public interest so the debates that are going on in the United States right now is how much of the gas to let loose.

GREG HOY: Australian manufacturers say quarantining gas to promote local industry is also happening in other countries.

SUE MORPHET: Canada, Israel, Qatar, the USA. They have all had a full review of what they can use their gas for domestically before they have allowed export. Israel holds back 60 per cent of their gas for domestic value-add. Canada does exactly the same thing, USA have only just allowed export after they've allowed their domestic market to fully flourish.

GREG HOY: Manufacturing Australia is calling for a national interest test. It points out that Western Australia has already adopted a policy of reserving 15 per cent of its gas for use in WA.

DAVID BYERS: This is an interference with the way in which demand and supply should operate. It's an increase in costs in being able to supply into the Western Australian marketplace.

GREG HOY: Andrew Liveris is taking his message to Canberra. His meetings with the Federal Government this week were private but there's little doubt what stern question was raised.

ANDREW LIVERIS: I think this next period of time you will not like the answer as the Alcoas and other companies start shutting down and you haven't got a plan to re-skill your workforce to the advanced economy and I think that pressure has arrived and I think what will happen is the Government will have to respond.

TRACY BOWDEN: Greg Hoy with that report.