East coast gas prices are easing back after their recent super spike but they remain higher than the same gas costs in Japan:
Thus electricity prices remain crazy as well:
The news flow shows that pressure continues to mount on GLNG and Santos, the real cause of all problems, via the AFR:
The theory that investors in the Queensland LNG projects may want compensation if they are forced to divert gas into the local market has strengthened after Santos chief executive Kevin Gallagher said the GLNG partners had a right for their investment to be protected.
Mr Gallagher pointed to a “value impact” for the partners in Santos’ $US18.5 billion ($24.3 billion) GLNG venture and said “the issue of compensation then needs to be addressed” if gas was taken from the LNG export venture to supply the east coast market.
Approvals for the GLNG venture contain no limit to the amount of gas the partners can take from the domestic market beyond their own acreage, even though the venture said in its environmental impact statement that it “has no direct implications for domestic gas prices” and would not be diverting gas from local to export markets.
Mr Gallagher also noted it was important to distinguish between Santos and the GLNG venture as a whole in the discussion on gas supplies, noting Santos was just “one vote in four” when it came to decisions by GLNG.
…Mr Gallagher said Santos wanted to reach agreement with its partners on proposals it could take to the follow-up meeting of gas CEOs in Canberra, expected in about three weeks.
No compensation should be paid. These guys buggered up their investment metrics, period.
Meanwhile, Nick Xenophon is keeping the pressure on:
Senator Xenophon said on Monday that his party: “will support company tax cuts for businesses up to $10 million, but nothing beyond that, until we can sort out the energy crisis in this country”.
He criticised the government’s announcement on Monday of an inquiry by the competition watchdog into retail electricity prices as a “lame excuse” for action and demanded “immediate action”.
“The fact that Minister [Josh] Frydenberg has walked away from the emissions intensity approach, one endorsed by Malcolm Turnbull when Malcolm Turnbull commissioned Frontier Economics eight years go in relation to an alternative approach to carbon pricing is just extraordinary.”
Asked what specifically he wanted in return for potentially backing a tax cut for companies with a turnover of more than $10 million, Senator Xenophon said: “It would have to be a guarantee [of an emissions intensity scheme] that is locked in in terms of bipartisan support. You would actually unleash billions of dollars of investment in this country.”
Senator Xenophon also said that he would require a national approach that would see some gas reserved for domestic use as part of a potential tax deal.
The government is reaping the whirlwind of its stupid politics. Xenophon has every interest in playing hard ball given his power base is SA which the government has stupidly blamed for the crisis. Indeed, the SA government and Xenophon look like a united front, via The Australian:
The federal government is panicked over projected power price rises of up to 30 per cent for east coast cities, South Australian Premier Jay Weatherill says.
Unlike Do-Nothing Malcolm’s uncosted 7-9 year distant Snowy hydro brain fart, the SA government has moved to swift and practical solutions to secure its grid within the NEM, with urgent new battery and gas investments (which being publicly owned will run regardless of input prices), as well as some (though not enough) gas market reform.
Now this South Australian alliance might just save the east coast. If it can force Do-nothing Malcolm to act on a third party gas exports ban and domestic reservation then the crisis is over for the foreseeable future. The retail investigation would be a little cherry on top for consumers.
Sit back and watch as SA government polls soar and federal government crater. In the end politics is about governing not itself.
