Australian gas market

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Australian gas market

Postby HBS Guy » 12 Oct 2017, 11:00

We are being snowed about gas supply and gas prices. Michael West reports:

https://www.michaelwest.com.au/shell-plays-australian-gas-customers-for-mugs/

turdfull’s jawboning has had some effect in reducing spot prices here—but for how long? How good is our supply when no exploration has been done?
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Re: Australian gas market

Postby Lefty » 16 Oct 2017, 10:54

From the article....

Contract gas in WA for commercial and industrial customers is $A6 or lower compared to $10-$16/GJ in the east of the country. WA and eastern Australia are both large exporters of gas. WA is a substantially larger exporter of gas than the eastern states. The difference is WA has a domestic gas reservation policy whereas the east does not.


Yep. Without strictly enforced measures like these or similar, the eastern gas cartel whose massive export edifice sits right across the harbour from my hometown will simply continue to exploit us to the hilt. And the effects are not trivial. How the fuck can a country that is swimming in nearly all kinds of energy resources - both old types and new - be forced to pay some of the highest energy prices in the developed world for it's own energy resources?

Overturning state fracking bans is unlikely to do much as long as the industry is dominated by a cartel - any extra gas produced will simply be hoovered up and exported. This is the bit that Turdfull doesn't get - or much more likely, does understand but is corrupt/bound by ideology - there is no domestic market in the east in the normal sense - production and supply are dominated by a cartel whose shareholders interests are the opposite of those to Australian consumers and domestic businesses. As long as this situation remains, no amount of extra gas production will help.

It is imperative that the cartel be broken - it is desperately in the national interest.
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Re: Australian gas market

Postby Lefty » 19 Oct 2017, 11:35

Bad news if true....

In the next few weeks there will be an announcement that a large, gas-intensive Australian manufacturer is to lay off about 1000 workers. The ripple effects this will have on society will be devastating and most certainly could have been avoided.

It is likely this news will be made to the backdrop of an opportune reaction from the Turnbull government: there is a gas “crisis” in Australia and workers have lost their jobs because of skyrocketing electricity prices. Either the Prime Minister or one of his ministers will swiftly propose the solution: extract more gas and lift the fracking moratoriums.

What will be strategically left out of this narrative is that onshore coal seam gas has proven to be very high-cost. It is globally uneconomic in a low-cost gas world. We are currently experiencing a massive international glut in the supply of gas that is keeping prices at historic lows. Producing high-cost onshore gas is not going to bring the price of domestic gas down and stop further job redundancies. But it is financially advantageous for the handful of gas companies running this national sideshow – Origin, Santos, Shell and BHP/Exxon.

To find a policy response that will bring down domestic prices, save gas intensive industry and jobs and lower electricity costs for the domestic and industrial consumer, we do not have to look far – just to Western Australia.

In WA, industrial consumers of gas pay less than $6/GJ for gas. On the east coast, however, prices have recently been in the range of $10 to $16/GJ. Why is this? The answer is simple: WA has a domestic gas reservation policy.


Link to above quote is near the bottom of this MB article I can't link directly because my months worth of free articles at SMH has run out and I couldn't be fucked subscribing.

If Turdfull allows this to go on, I could only describe it as treason.

There is no shortage of domestic gas production for our own commercial and industrial needs - we are absolutely swimming in gas production like never before. Instead, there is a cartel with zero interest in the fate of 25 million or so Australians and their country, with their feeding tubes plugged in, hoovering up all the gas - including the cheaper to produce gas - and vomiting huge quantities of it into Asia cheaply, while making the people who actually own the resource pay prices so exhorbitant that serious economic harm is begining to unfold.

Again, for a government to simply allow this to go on because, oh dear we're terrified of sovereign risk, can only be either the most appalling act of ballless-ness by a government or......treason. Sovereign risk? What about risk to the sovereign? Are we truly so terrified that stopping the cartel (whom we absolutely fell over ourselves to give the keys to) from parasitising us to the point of economic wreckage will stop them from future investment that we are prepared to simply lay down and accept this kind of exploitation?

The message we are currently sending the multinationals of the world is not merely that we are open for business but that we are open for plunder. We are spreading our cheeks wide and saying to them "ream us out for all it's worth - we'll cop everything you dish out and you'll never hear a squeak from us".

Perhaps free market logic might say "Australian gas-dependant industries should just spend billions on relocating their productive capital and workforces (a combined total of close to a million taking both direct and indirect into account) somewhere where the gas is cheap, like perhaps WA (where it cheap because of GOVERNMENT POLICY, not the free market! :roll ).

Or we could just bring down the hammer on these cunts with strictly-enforced domestic reservation and use it or lose it rules.

My bet is that Malcom will take the "bend over and spread em" option while waxing lyrical about how the fault is someone elses.
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Re: Australian gas market

Postby HBS Guy » 19 Oct 2017, 11:50

Yes, actually doing things is not a trait of PM turdfull.

Shit, I hope some sense prevails somewhere.
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Re: Australian gas market

Postby HBS Guy » 19 Oct 2017, 12:11

smh link:

http://www.smh.com.au/comment/job-cuts-on-the-way-but-dont-be-fooled-by-gas-crisis-spin-20171018-gz343n.html

A truly pathetic, do–nothing government. Just implement a domestic reservation policy FFS! Then start reclaiming gas/oil leases where the leaseholder has done nothing to explore the lease area!

No time for a carrot, the stick must be wielded and wielded decisively—we know it won’t.

Do the Libs think what 1000 new unemployed on NewStart will do to their precious Budget deficit? Less PAYE tax, more Newstart payments. Not*rocket*science!
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Re: Australian gas market

Postby Squire » 19 Oct 2017, 13:03

This is government interference in the markets which never ends well.

If governments had not interfered, cheap Bass Strait gas would have been distributed to NSW and SA four decades ago.

The Liberals blocked Whitlam and Rex Connor from having a pipeline from Dampier WA to Sydney with spurs to SA and other locations.

In regard to WA's gas reservation policy, the people of WA paid up front by a huge investment to allow early gas supply and Energy Company revenue by a domestic gas supply 6 years before LNG revenue started to flow. WA consumers paid premium prices above world gas price at that time and probably still are paying a premium price.

On top of that, some corruption was afoot at the time with the WA Inc. scandal with Brina Burke and other politicians filling their pockets with free money.
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Re: Australian gas market

Postby HBS Guy » 19 Oct 2017, 13:33

Interference or not something does have to be done.

Moving on leases not explored would give the gas companies a clear message.
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Re: Australian gas market

Postby Lefty » 19 Oct 2017, 13:43

The problem here is entirely stemming from the lack of intervention by government. They were elected to represent the interests of Australians first and it is their job to do so by moving to prevent a cartel from inflicting great socio-economic harm.

The "not end well" part is already emerging, precisely because they refuse to meaningfully intervene.
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Re: Australian gas market

Postby Squire » 19 Oct 2017, 18:25

The real beneficiaries of Australian resource exports are MNCs, foreign money lenders, and international investors.

The trickle down is a drip.
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Re: Australian gas market

Postby Lefty » 20 Oct 2017, 06:02

Squire wrote:The real beneficiaries of Australian resource exports are MNCs, foreign money lenders, and international investors.

The trickle down is a drip.


Yes and yes.
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Re: Australian gas market

Postby Lefty » 20 Oct 2017, 12:37

David Llewelyn-Smith - not exactly a red ragger - understands the dire need for state ownership and control of certain things.......

The answer is obvious and it is not market-based. Gas reservation needs to be ramped-up aggressively and the prices fixed.

Remaining gas reserves are too expensive to develop privately. They should be expropriated and developed by a gas national champion.

This market has failed. Only government can fix it.


https://www.macrobusiness.com.au/2017/10/deliver-cheap-gas-east-coast/

Exactly. Government LET a predatory and parasitic cartel do just about whatever it liked, on the premise that markets are always and ever the only efficient and effective way to allocate just about every resource that exists. This premise has been so blindingly obviously demonstrated horribly wrong so many times now that you would think common sense would have prevailed and the need for state ownership and control of certain crucial resources, infrastructure and institutions been admitted long ago and appropriate action taken to swing the pendulum back leftward towards some balance.

That the Australian government continues to stand blithely by and simply watch the millions of people who elected to lead them be virtually raped and pillaged economically is the most base act of betrayal of it's responsabilities. The continued unswerving belief that markets will fix this if left to their own devices is deluded ideolgical madness.
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Re: Australian gas market

Postby HBS Guy » 20 Oct 2017, 12:45

deluded*ideological*madness*

Sums up the last 4 years very well. And they are STILL trying to push that stranded asset, coal.
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