At last: Straya to invest in gas fix…in Asia…OMG

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This dill has no idea what he is doing:

Australia has struck a high-level agreement with the US government to promote more Asian gas import receiving infrastructure and open markets as both nations expand competing liquid natural gas exports.

The deal was revealed today by Federal Resources Minister Matt Canavan, who said it had been signed last week during Malcolm Turnbull’s trip to the US with the aim of expanding Asian gas markets.

“The launch of the strategic partnership of energy in the Indo-Pacific will promote the development of regional infrastructure and energy co-operation, open and competitive markets and improved rules and standards,” Mr Canavan told the Australian Domestic Gas Outlook conference in Sydney this morning.

“There is a transition to lower emission energy supplies and gas is right up there as the next cab off the rank,” he said.

“But some of the infrastructure in Asia does need increased investment in receiving terminals, pipelines, to allow more gas to be taken up in our region.”

WTF. Are we going to do vendor financing deals for Asian nations to build the very infrastructure we need at home? The east coast economy is dying because these profitless gas exports are enabling the cartel to gouge local businesses and households via an artificial shortage.

Give us domestic reservation, in AUD and dislocated from Asian pricing, and build the infrastructure to make it work if necessary. Build a pipeline from WA if you have to.

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Asia is swimming in gas. Despite all of the hoopla, it will remain this way for as far as the eye can see:

That’s what this is really about. Building out Asian infrastructure to soak up the glut on behalf of the toxic cartel.

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The US doesn’t care. It’s gas price is $3.20 and protected by domestic reservation. But ours is $7.85 spot, well above export net back and nearly at parity with Japan. The only thing protecting the local eonomy from further price spikes is the glut. I know this argument is upside down but that’s how broken this market is. The higher the Asian gas price goes the worse off we will be.

This debacle has now morphed from economic barstardy to outright control fraud.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.