From Cartel Canavan today:
Bass Strait is declining as a supplier of cheap and affordable gas. We have been fortunate that gas production has increased in other parts of Australia, like the coal-seam gas fields of Queensland. These fields are the only reason that we can respond to the falling production in Bass Strait.
This time last year, gas prices shot through the roof. Prices for large commercial and industrial consumers peaked at around $16 per gigajoule in early 2017, more than three times their historic levels. These prices put at risk thousands of jobs so the government acted to ensure that sufficient gas would remain in Australia at a reasonable price. We introduced the Australian Domestic Gas Security Mechanism so that the government had the legislative ability to restrict gas exports in the national interest.
Fortunately, the government has not had to resort to formal gas export restrictions. We have instead reached agreement with the gas industry that sufficient gas would be made available at reasonable prices. Since signing the heads of agreement in October, LNG exporters have announced contracts to provide substantial volumes of additional gas to domestic buyers in 2018.
No amount of export controls can force the price down below the cost of production. To get further reductions in gas prices, we need to discover more productive gasfields, just as we did in the 1960s. That is why the government has established the gas acceleration program, which opened for applications in January. It will provide matched grants for gas producers to drill in new areas. The government is also funding new geological and bioregional assessments in the Cooper Basin and Isa Super-Basin areas.
There are prospects right around Australia. Recently, the Victorian government released a “working estimate” of 110 petajoules for onshore conventional gas resources around Port Campbell. In the Northern Territory, there is great excitement about shale gas resources that could deliver affordable oil and gas.
Yes, bring it on. More gas is good. However, export restrictions can patently reduce prices in the meantime and, for that matter, forever too. Today’s east coast price is not cheap at all at $9Gj average and $10.50 in VIC. It should be below $5Gj ($6 at the very worst such as in WA thanks to reservation) and the only way to get it there is to force more of the QLD gas stay here. That is, break the cartel that is shipping it all offshore.
All other unconventional gas in Australia is not cheap enough to deliver this and it will simply flow offshore as well without reservation.
You, sir, are a scoundrel, an idiot or both.
