Labor delays LNG import rort

Thank goodness, via the AFR:

Credit Suisse energy analyst Saul Kavonic said that despite the crowd of proposals, none may get a green light this year.

“I remain sceptical of an LNG import terminal achieving FID [final investment decision] this year due to poor appetite by industrial buyers, social licence challenges, and the risk posed by a potential new government and pipeline reform to some terminal business cases,” Mr Kavonic said.

…An ALP government is expected to toughen up gas policy, and observers point to the potential influence of the Australian Workers Union, where national secretary Daniel Walton has spoken out against imports in the belief they would lock in LNG import-equivalent prices for domestic gas.

He is absolutely correct. LNG imports will only add an import cartel to export cartel and actually lift prices because by definition we cannot import gas for less than the Asian price plus a margin.

Domestic reservation is a much better solution. If we lower the ADGSM target price to $5-6Gj, the cartel will simply have to deliver enough gas to hit it. That gas will be locally produced and to the extent that it never gets exported will lifted Asian prices at the margin instead of our own.

Houses and Holes

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.


  1. ErmingtonPlumbing

    A good piece of Govie stimulus,…rather than $900 cheques and tax loopholes for speculative investment’s woukd be to build Rex Connors 1974 gas pipeline from the NW to the east coast.
    No Fk trying to borrow the cash of the A,..rabs to build it this time around. We should just pay for it, hot of our own printing press.
    Cant think of a sounder destination for a bit of “Money Creation”.

    • I hold much hope that WA would sooner cut ties with the commonwealth than pipe its natural gas into the cluster-fvck that is Australia’s East Coast domestic gas market…