Australia’s energy suicide is here

And so it begins, or resumes, via Domainfax comes the catastrophic ACCC:

Mr Sims said the information would allow manufacturers to get better gas contract prices.

“Domestic gas buyers clearly should not have to pay more for gas produced in Australia than the overseas buyers. The publication of LNG ‘netback’ prices on our website will further improve gas price transparency and reduce the information imbalance between gas buyers and sellers.”

However, Mr Sims said prices could fall below these prices if more gas supply becomes available in Australia.

More from The Australian:

Prices right now for 2019 are very high,” ACCC chairman Rod Sims told The Australian.

“We don’t want to lose Australian industry just because of unusually high prices. They are really struggling and there are certainly some gas users that are weighing up whether to continue doing business in Australia or move their plant overseas. There’s no doubt some are thinking about that.”

So, as I’ve been writing for some time, the export net-back is already at $15Gj versus today’s $9Gj locally. It does not appear that the renewed Australian Domestic Gas Security Mechanism (AGDSM) has changed its price benchmark from the net-back price so we are about to see a massive new energy price shock first in gas then electricity prices (recalling that gas sets the marginal cost of electricity).

Yet what is the ACCC response to this outright national crisis? To again argue that we must release NSW and VIC gas that has been locked up owing to rock-solid community opposition. It’s true but it ain’t coming.

The ACCC has descended into economic virtue signalling while the economy in its care is ravaged by an energy cartel. As the ACCC keeps its head firmly plugged in some ridiculous test tube, the political fallout will be next as energy prices skyrocket into next year’s election and an energy squeeze joins the building credit crunch to smash domestic demand. It will also reignite the carbon wars as politicians exploit the shock.

And you know what happens next? The RBA will be forced to cut and the AUD will fall. But don’t sigh with relief. That will make it all worse as the lower currency drives the gas net-back gas price even higher making the energy shock much worse.

Yes, this is now how Australia’s catastrophically stupid Banana Republic gas ‘market’ works. The weaker the economy and the AUD gets, the higher local energy prices go, weakening the economy and AUD, rinse and repeat unto doom.

This is complete economic lunacy.

The link between local and global gas prices must be broken permanently. Toughen domestic reservation. Fix it at $6Gj. Do it today. WA has reservation and a stable gas price of $4Gj.

It’s that or it’s watch the nation turn into a giant Nauru.