Major gas shortages predicted for East Coast in 2018

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Major gas shortages predicted for East Coast in 2018

Postby Squire » 02 Nov 2017, 12:50

Turnbull won't do a thing about it in the short term because it doesn't matter to him and his mates. Turnbull and his mates will find a way to profit from the shortage before they move forward.

One of the schemes Turnbull is examining is a pipeline from Dampier to the East which is something Rex Connor of Labor Party was proposing nearly 50 years ago. Labor was going to finance with low-interest Middle East money.

Meanwhile back in the kitchen the gas peters out.

https://www.businessinsider.com.au/australia-east-coast-power-supply-shortage-2018-2017-9

Australia's east coast faces a gas shortage so huge it's the power needs of 55 major towns for a year

CHRIS PASH
SEP 25, 2017, 2:39 PM

Australia’s east coast domestic gas supply is expected to see a shortfall equivalent to the residential power needs of Wollongong for a year, 55 times over, according to analysis by the ACCC (Australian Competition and Consumer Commission).

The ACCC’s investigation, ordered by the federal government in April, shows a substantial shortfall of gas for the east coast likely in 2018, with a subsequent sharp rise in electricity prices, mainly due to increasing exports of LNG.

“The situation in the east coast gas market is serious and options to address the problems in the immediate term are limited,” says Rod Sims, the ACCC chairman.

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The report projects a shortfall in the east coast gas market of up to 55 petajoules (PJ) in 2018, which could be as high as 108 PJ if domestic demand is higher than expected.

One PJ is enough gas to supply the residential needs of Warrnambool, Wollongong or Penrith, or a large industrial user, for a full year.

The likelihood and extent of a supply shortfall will partly be affected by difficult-to-forecast gas-powered electricity generation demand.

But the significant shortfall of gas is reflected in prices being offered to commercial and industrial customers for 2018.

“The effect of higher gas prices is felt right across the economy, from households to big business. Gas and gas-powered generators are also an important part of electricity generation, so higher gas prices feed in to higher electricity prices, leading to a double hit for many,” says Sims.

More than a third of the commercial and industrial users interviewed by the ACCC are considering either reducing production or closure due to high gas prices.

The ACCC estimates showing expected demand and the shortfall in supply:



The ACCC reported last year, in its East Coast Gas Inquiry, that the Queensland LNG projects caused a significant disruption to the market.

In 2018, the LNG projects will together produce more than 70% of the east coast’s gas and account for two-thirds of the east coast’s gas demand.

“The expected shortfall could be reduced to a significant extent if the expected sales on international LNG spot markets were instead redirected to the domestic market,” says Sims.

“It is unclear why we are not seeing more steps being taken by the LNG projects to supply more gas into the domestic market. Although we accept some additional coordination costs would be likely and agreement of the joint venture parties of the LNG projects is required.”

The ACCC says domestic prices on the east coast are well in excess of the appropriate benchmark levels.

The Australian Government has recently implemented the Australian Domestic Gas Security Mechanism which can restrict LNG exports to meet domestic demand.

“Export controls may go some way to addressing this shortage in the short term,” says Sims.

“However, further steps are needed to address the underlying problems of lack of gas supply and lack of diversity of suppliers in the east coast gas market.”
Last edited by Squire on 08 Nov 2017, 01:21, edited 1 time in total.
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Re: Major gas shortages predicted forr East Coast in 2018

Postby HBS Guy » 02 Nov 2017, 17:38

So the Libs want more CSG fracking?
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Re: Major gas shortages predicted forr East Coast in 2018

Postby Squire » 03 Nov 2017, 14:19

HBS Guy wrote:So the Libs want more CSG fracking?


The Libs want more free OPM. They will instigate gas shortages to bend the will of the public.
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Re: Major gas shortages predicted forr East Coast in 2018

Postby Lefty » 05 Nov 2017, 05:38

Turnbull won't do a thing about it in the short term because it doesn't matter to him and his mates. Turnbull and his mates will find a way to profit from the shortage before they move forward.


Agree.

This is essentially a national security crisis that vastly outweighs any credible terrorist threat. The government are choosing to let a cartel absolutely plunder the Australian economy. Because they are paralysed by free market ideology or are corrupt or both.

They can wax lyrical all they like about perceived risk to future investment and free markets - there is no longer anything resembling a market here. Our lifeblood - energy - is under the domination of a cartel, plain and simple. Because we simply gave it to them. Because that's what we do here.

Australia = stupid. We desperately need to reject neoliberalism or keep on suffering the consequences.
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Re: Major gas shortages predicted forr East Coast in 2018

Postby Francis » 05 Nov 2017, 10:58

I wouldn't say we just gave it to them.

Large donations were made to both the libs and labor
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Re: Major gas shortages predicted forr East Coast in 2018

Postby Squire » 05 Nov 2017, 16:28

Francis wrote:I wouldn't say we just gave it to them.

Large donations were made to both the libs and labor


They were not donations. They were downpayments to establish property rights over politicians, like dogs pissing on things.

To the wealthy and immoral, politicians are property, not people.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Lefty » 08 Nov 2017, 08:29

Industrial energy buyers on the east coast are seeing a fresh deterioration in the choice and terms of gas supply offers, only weeks after the federal government’s deal with Queensland LNG exporters for additional local supplies.

Businesses seeking firm gas supply contracts are often finding only one retailer with gas available to sell to large customers, said John Bartlett, senior manager at Energetics, which sources more than $250 million in gas and $2 billion in electricity each year for large energy users.He said it appears the extra gas arising from the early October deal is being sold to the highest priced markets such as power generation, leaving industrial customers still short.

“The reality is that gas is being directed to more profitable channels, suggesting that the commitments from energy retail executives amount to very little,” said Mr Bartlett.

… industrial energy buyers fear the relief will turn out to be only temporary and say they have seen little evidence of an improvement in contract offers since the deal, despite the pledges by Shell, Origin Energy and Santos to make more gas available for use on the east coast.


Certainly, onerous conditions around contract offers have not softened, said Tennant Reed, policy adviser at Australian Industry Group, which represents a number of industrial gas buyers.

“We should be seeing more parties able to make offers, but all the feedback I’ve had is that its 95 per cent “take-or-pay” and tough conditions around maximum demand remain the norm,” Mr Reed said.


https://www.macrobusiness.com.au/2017/11/gas-crisis-returns/#comment-2993968

What a shame that we are totally and utterly helpless and powerless to do anything whatsoever about the absolute rape and pillage of our resources on our own sovereign territory :roll :roll :roll , even though they are crushing consumers, directly harming the vulnerable and threatening to inflict serious harm on our domestic industry - otherwise investors might throw a wobbly and exit the field or not come here in the first place.

FFS Turnbull - grow a set and put a stop to this blatant economic plunder!!!!!

But we know he won't.
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Re: Major gas shortages predicted for East Coast in 2018

Postby HBS Guy » 08 Nov 2017, 09:23

We need an election ASAP! This shambles can’t be allowed to keep going!
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Re: Major gas shortages predicted for East Coast in 2018

Postby Squire » 08 Nov 2017, 13:15

HBS Guy wrote:We need an election ASAP! This shambles can’t be allowed to keep going!


Nothing will change. You can't force business to spend its money on facilities for supply of a good that will be price controlled. That's communism.

The government has to make the supply of domestic gas commercially attractive. Incentives work better than disincentives.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Lefty » 08 Nov 2017, 14:04

Squire wrote:
HBS Guy wrote:We need an election ASAP! This shambles can’t be allowed to keep going!


Nothing will change. You can't force business to spend its money on facilities for supply of a good that will be price controlled. That's communism.

The government has to make the supply of domestic gas commercially attractive. Incentives work better than disincentives.


Would you champion this argument when the economy implodes - all because those who were elected to lead us are too afraid or too corrupt or both, to bring those engaged in outright economic plunder and vandalism of that which belongs to this nation to heel?

What incentives do you suggest will would have the slightest effect on the current outcome? I'm not sure you understand the meaning of the word "cartel".

Your suggestions here have surely gotta be just a piss-take?
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Re: Major gas shortages predicted for East Coast in 2018

Postby HBS Guy » 08 Nov 2017, 15:45

Taxes on gas exported? A resource rent tax?
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Re: Major gas shortages predicted for East Coast in 2018

Postby Squire » 08 Nov 2017, 17:12

HBS Guy wrote:Taxes on gas exported? A resource rent tax?


Disincentives disincentivate.

The only way gas can be produced and transported against negative economics is if the government undertakes the gas production and pipelines. Profit based corporations won't engage in such business because it is high loss and thankless. There is just no incentive to meet growing demand by investing more when it's a loss-making venture.

The problem is lack of strategic planning. The time horizon for projects like this is beyond one parliamentary term which means that if a government loses an election after starting such projects, the incoming government receives the acclaim if the project is successful.
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Re: Major gas shortages predicted for East Coast in 2018

Postby HBS Guy » 08 Nov 2017, 18:04

Or destroys the project: the NBN for example, or the Snowy Mts Scheme that Menzies would have halted but the Country Party wanted that nice irrigation water. Agrarian socialists alright!
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Re: Major gas shortages predicted for East Coast in 2018

Postby Lefty » 08 Nov 2017, 18:42

The only way gas can be produced and transported against negative economics is if the government undertakes the gas production and pipelines. Profit based corporations won't engage in such business because it is high loss and thankless. There is just no incentive to meet growing demand by investing more when it's a loss-making venture.


Squire......you seem to continually struggle with understanding the meaning of "a cartel has taken (been given) control of the resource".

cartel
noun
:an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.


Do you understand the artificial nature of the rather sudden domestic shortage?

There is no shortage of gas production. We are absolutely swimming in all the gas production our domestic industry and households could ever use plus much more again. It is all being hoovered up for export by the cartel.

Australian domestic industry and households are now being deliberately denied affordable access to their own sovereign resource so that huge volumes of our own energy can be vomited cheaply into Asia.

If you can't grasp just how twisted and wrong this is on so many levels then there probably isn't much hope for you.

If you can't grasp just how serious the situation is then there probably isn't much hope for you.

However, you have correctly identified one potential solution - a national gas champion would be one possible approach. But we had better hurry. Of course, the only thing Turnbull does in a hurry is nothing.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Squire » 08 Nov 2017, 18:49

The problem with having a government entity as a gas supplier is that the government is likely to privatize it if it is successful, and even sell it off cheaply if it is not successful.

Whatever fills their personal pockets.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Lefty » 09 Nov 2017, 06:37

Squire wrote:The problem with having a government entity as a gas supplier is that the government is likely to privatize it if it is successful, and even sell it off cheaply if it is not successful.

Whatever fills their personal pockets.


Yes, this has been the way of the past 35 years or so - neoliberalism. The failures of neoliberalism are becoming so large and so far-reaching that this will ultimately have to change.

There would only be one single purpose in a government owned gas supplier - to provide affordable access to an absolutely critical resource to domestic consumers in the case where private markets either cannot or will not do it.

Or in the situation we have now - where properly functioning private markets have basically ceased to exist altogether.

We have spent decades selling off government-owned things that worked - usually for the worse. This would be the inverse - creating a government entity to prevent disaster because something has been clearly demonstrated to not work in unfettered private hands.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Squire » 09 Nov 2017, 12:14

The answer could be decentralization of the gas market by fostering a bean diet and harvesting anus gas.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Lefty » 10 Nov 2017, 06:26

India enjoys huge Aussie gas discounts as local penionsers die

Not sure it's quite as bad as that bad yet but it's coming - the recalcitrance and probable corruption of the Turnbull government will see to it.

The east coast shortage that is at the root of our woes here is but a small percentage of production. Domestic reservation policy would fix it easily.

But reserving a little bit of a nation's own sovereign energy supply to ensure that local industries don't implode and households are not crippled is something only commies would do. Apparently.

All that remains to be seen is just how bad Australians will allow the situation to become.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Squire » 10 Nov 2017, 13:57

You are missing major considerations in the $6 WA domestic gas price.

The WA taxpayer paid for the pipeline from Karratha to Perth. It was later privatized.

When gas production started from the North-West Shelf, the WA consumer was paying a 100% premium over international gas market prices in order to give Woodside Energy healthy revenues ahead of the start of LNG shipments four years after domestic gas started.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Lefty » 10 Nov 2017, 14:36

The major consideration is that the price differential largely results from one gas-rich state legislating to put aside some gas for domestic users while on the other side of the country, a cartel is in almost complete control and gouging till the cows come home.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Squire » 10 Nov 2017, 18:29

Lefty wrote:The major consideration is that the price differential largely results from one gas-rich state legislating to put aside some gas for domestic users while on the other side of the country, a cartel is in almost complete control and gouging till the cows come home.


If supplying the Eastern states with gas was such a profitable enterprise, Australia would be overrun with companies seeking to enter the market.

There is more human anus gas in the Eastern states than natural gas.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Lefty » 10 Nov 2017, 18:32

Squire wrote:
Lefty wrote:The major consideration is that the price differential largely results from one gas-rich state legislating to put aside some gas for domestic users while on the other side of the country, a cartel is in almost complete control and gouging till the cows come home.


If supplying the Eastern states with gas was such a profitable enterprise, Australia would be overrun with companies seeking to enter the market.

There is more human anus gas in the Eastern states than natural gas.




Help me to understand how I can help you to understand the meaning of the word "cartel".
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Re: Major gas shortages predicted for East Coast in 2018

Postby Squire » 10 Nov 2017, 18:51

Lefty wrote:
Squire wrote:
Lefty wrote:The major consideration is that the price differential largely results from one gas-rich state legislating to put aside some gas for domestic users while on the other side of the country, a cartel is in almost complete control and gouging till the cows come home.


If supplying the Eastern states with gas was such a profitable enterprise, Australia would be overrun with companies seeking to enter the market.

There is more human anus gas in the Eastern states than natural gas.


Help me to understand how I can help you to understand the meaning of the word "cartel".


For your arguments to be credible, there would have to be a conspiracy between politicians and gas exploration and production companies to cause economic harm to Australia.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Lefty » 11 Nov 2017, 06:03

Look Squire, I'm interested in facts - I don't troll/argue just for the sake of arguing. If you want to argue that the sky is green not blue just for the sake of it, then I'm not interested.
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Re: Major gas shortages predicted for East Coast in 2018

Postby Squire » 11 Nov 2017, 18:32

Lefty wrote:Look Squire, I'm interested in facts - I don't troll/argue just for the sake of arguing. If you want to argue that the sky is green not blue just for the sake of it, then I'm not interested.


If LNG is cheaper than the Eastern States gas production, the answer is evidently for the government to finance LNG gasification facilities in Eastern cities and buy LNG from the producers.

If it's a strategic economic policy issue, the government is best placed to finance it.
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