From Michael West, the last journo standing:
The Gas Cartel has managed to convince the Australian public that when global gas prices are high we should pay global prices and when global prices are low we should pay 60 per cent more than the global price.
Yes you read that correctly. Australian industry is currently paying 60 per cent more than the global price for gas when Australia is the world’s second largest exporter of gas and will soon be the largest.
Here is what Morgan Stanley had to say about it in December: “Export gas cheaper than domestic; is not socially or politically acceptable. What has yet to have an impact is the potential for future legislative interference if the east coast gas markets continue to tighten with the majority of current gas reserves committed for export.
“Due to gas pricing mechanisms agreed to in some early contracts, significant volumes of gas are being produced by APLNG and on-sold to QCLNG for 20c/GJ with the ensuing volume of LNG now delivered to Singapore and China at landed prices that are currently lower than city gate prices in eastern Australia.
“At $US50 Brent prices, the field netback for export gas would approximate $US3.50/GJ, which would be cheaper than domestic gas prices, which are quoted in the $A7-$9/GJ range. This is not a sustainable situation in a tightening domestic market.”
The price of oil has dropped hard since then, placing further pressure on oil-linked export contracts. Brent crude now fetches $34.06.
Australia produces gas as cheaply as anyone in the world from our globally competitive offshore gas fields. Where we are uncompetitive is in the high-cost east coast onshore CSG fields. To try to make the globally uncompetitive CSG industry profitable the gas cartel is keeping domestic prices artificially high by controlling supply.
It is, says analyst Bruce Robertson, “classic cartel behaviour” and “the relevant authorities stand by and allow this illegal activity to continue without lifting a finger”.
“Our industry is moving offshore to secure cheaper sources of energy and our domestic consumers are being milked. If you consume gas in Australia you are paying too much.”
We know Australians don’t give a shit but this is actually the stuff from which revolutions are made.
