It seems there are sensible economists in Heaven, via AFR:
The Uniting Church in Australia has lined up against powerful gas producers, telling the federal government that proposed changes to the petroleum taxation regime are far too generous and leave the community shouldering part of the risk for poorly conceived exploration programs.
…the Synod of the Uniting Church, which pledged to divest from fossil fuel investments in 2014, said it was “perplexed” why the government was retaining tax concessions at all for the gas industry. It said the revised “uplift” rates on concessions are “still too generous at the cost of returns to the Australian community” for funding for aged care, schools health and disability services.
“Further, the Synod is disappointed the reduction in uplift rates only applies to future projects and does nothing to address the massive accumulated credits that apply to many of the existing project.”
Bloody oath. God meet Mammon.
Meanwhile, Scummo is so lost on energy he is going to rev up Australia’s exposure to gas which will drive power prices up even further, at The Australian:
The Prime Minister’s underwriting scheme shortlist has mainly focused on gas and hydro projects in Victoria, NSW and South Australia.
“The government was able to agree a short list of projects, which will now be examined in closer detail, before any final decision is made on any underwriting on the price position for those projects that would assist them to secure their project findings,” he said in Brisbane today.
“Those projects have been drawn down from 66 proposals down to a dozen. Those projects will deliver around 4,000 megawatts, which is about twice the size of what we’re talking about, up at current stations like Liddell and other coal-fired power stations.
More gas demand when this, also at The Australian:
East coast gas users face a fresh warning of supply shortfalls from early next decade as rapidly declining offshore fields, limited new onshore production and questions over Queensland’s output raise concern over the ability of manufacturers to strike new deals.
Victoria may face annual gas supply shortfalls from 2023 or 2024 on peak demand days, with the situation worse in the winter months when average consumer demand is four to five times greater than in summer, industry sources told The Australian.
The Australian Energy Market Operator is expected to echo supply squeeze concerns raised by industry in its upcoming annual Gas Statement of Opportunities, due to be released this week, with the tone of its market commentary likely to be closely watched by nervous buyers looking for certainty on output. “There is not likely to be a gas shortfall in the next few years but we are potentially looking at fresh problems from the 2023 or 2024 period on,” a senior gas executive told The Australian.
What can I say? If the government simply triggered the Australian Domestic Gas Security Mechanism instead of subsidising new plants then gas prices would crash under $5Gj right now. If it firmed up the domestic reservation mechanism with a price cap of $6Gj then investment would pour into gas power production with the certainty of viable fuel supply without the government spending a single cent. As well, every $1 fall in the gas price is equivalent to a $10MWh drop in the power price. In other words, the government could cut the wholesale power price in half overnight and firm up dispatchable power at the stroke of a pen.
That this simple solution to Australia’s entire energy crisis has gotten no traction in the broader conversation only goes to show that I, too, have been damned by God to be the Cassandra of my age.