An idea whose time has come, from Ross Gittins:
As the feds understood full well, once you can liquefy natural gas you can ship it overseas. And once you do that you’ve taken the relatively tiny, closed eastern Australian gas market and opened it up to the huge East Asian gas market, where prices are much higher.
The inevitable consequence was a leap in the price of gas on the eastern seaboard – plus a huge windfall gain to our eastern gas producers.
Now do you see why the gas industry and federal politicians of both stripes keep repeating the economic lie that the problem has been caused by the states’ bans on fracking, and could be solved by lifting them?
No amount of increased gas supply on our part would be sufficient to lower the East Asian price of gas, which means no new producer of coal seam gas would be prepared to sell it to local consumers and manufacturers for anything less than they could get by selling it to Japan or China.
Unless, of course, the federal government obliged them to.
I don’t object to the policy of export-parity pricing but, like its predecessors, the Turnbull government wants to keep the policy a deep, dark secret because it’s so much harder to defend a super-rational policy in these days of populist indulgence than it was when Malcolm Fraser did something similar to petrol prices.
