Via The Australian comes the marvel of Australia’s LNG boom:
The huge impact of the OPEC oil cartel’s battle with US shale producers has been starkly revealed in a national industry survey that says Australia’s oil and gas industry logged a combined 2015-16 underlying net loss (excluding writedowns) of $4.5 billion.
The results of the Australian Petroleum Production & Exploration Association’s 29th annual survey, to be released today, show the biggest, and only the second, net loss since the survey started in 1987-88.
This is despite record production of 488 million barrels of oil equivalent as new LNG production came on line.
But APPEA members paid $4.25bn in taxes and royalties, although this was down from $5.24bn the previous year.
The first time in the past 29 years that the Australian industry had a combined loss was 2014-15, when a $600m net loss was logged.
This will include WA gas so it’s not all QLD though most of it is via the write downs. As I said this morning, the gas farce is complete:
- QLD had a coal-seam gas bubble with massive over-investment in export plants;
- ACCC and other authorities allow gas reserves to consolidate around the export cartel and QLD’s abundant and very cheap gas reserves are now exported en masse;
- Asian gas prices crashed on oversupply and the Curtis Island cartel now loses money on every calorie exported meaning that no Australian tax is paid thanks to write-offs and depreciation;
- the cartel then artificially limited gas supplies to the east coast economy driving prices crazy;
- because gas generation sets the marginal cost of electricity, power bills soared;
- neither the subsequent demand destruction nor calls for more supply will help because the cartel just ramps exports further;
- QLD has stepped in with power subsidies for households that are recycled directly to the gas cartel, so it is now literally borrowing to pay the gas cartel to steal its own gas.
Why don’t we reserve enough gas to set the local price at $5Gj and maybe even raise export prices a little. It’ll force the gas sector to take its own losses instead of everyone else having to take them instead.
