Great gas cartel robbery continues unmolested

From Oil Price:

China is set to import massive amounts of LNG in 2019 as part of its determined push to switch away from coal and toward the lower emissions natural gas, but this robust demand is unlikely to curb the current inventory glut in Asia, according to Reuters, citing Fereidun Fesharaki, chairman of energy consultancy FGE.

While China’s LNG demand growth is set to increase by 14 percent in 2019 over 2018 levels—between 30 billion and 40 billion cubic meters—it’s lower than the 2018 demand growth of 18 percent, according to data from the National Development Reform Commission. This demand growth is also likely to be lower than supply, which has increased dramatically over the last year as Australia, United States, and Russia increase production.

New production for LNG this year is expected to surpass LNG demand by 2 percent, according to Reuters calculations. This lopsided equation is unlikely to improve LNG prices which have plummeted about 60 percent in the last six months alone.

On the demand side of the equation, these low LNG prices are still above pipeline gas prices, and as the new Russia pipeline comes onstream to carry gas to China, demand for LNG may falter, CNPC’s Ling told Reuters last week, although this is still many months away from completion.

The Russia to China pipeline, dubbed the Power of Siberia, is expected to come online in December 2019.

The Chinese ramp up is pretty wild:

But, even so, I don’t think it is wild enough. The gas glut remains intact for years though clearly excess supply will create its own demand via cheap prices, especially as the war on coal intensifies.

Perversely, this would be good news for Australia given it should lower our domestic energy prices. The Aussie LNG export net-back price that is supposed to benchmark the gas cartel so that Australians aren’t ripped off by paying higher prices than our export customers has crashed to $5.20Gj, via the ACCC:

But even more perversely, the east coast spot price is unmoved at $10.50Gj, roughly double the cartel agreed price when the Australian Domestic Gas Security Mechansim (ADGSM) was introduced.

While the keystone cops of the Resources Minister, AEMO and ACCC do nothing, that means wholesale power prices are currently double what they should be as well, given gas sets the marginal cost of electricity. This highway robbery in utility prices is worth a cool $15-20bn to consumers and business per annum.

There has never been a greater heist in the history of burglary.  The other top ten pale in comparison:

1. Millennium Dome Raid

The year was 2000, and London had finally finished construction on the catastrophic waste of money known as the Millennium Dome. Among its many displays, was a world class Diamond exhibit. The crown jewel was the “Millennium Star” — a flawless 203 carat gem worth $250 million. The robbers planned an explosive smash and grab job, running in guns blazing and escaping on a waiting speedboat. Their plan was foiled, however, as London’s metropolitan police had coincidentally already had them under surveillance for a few armored car robberies, arresting them on site.

2Isabella Stewart Gardner Museum Heist

In 1990, while the entire city of Boston celebrated St. Patrick’s day by chugging beer and smack-talking the Yankees — two thieves dressed as Boston police officers entered the museum and stole 13 works of art. The missing pieces include a Rembrandt, Manet, and a few by Degas, estimated at $500 million total. Empty frames currently hang in the room, in homage to the missing art and in hopes that they will one day be returned. This is one of the greater unsolved mysteries in American crime.

3. The Collar Bomb Bank Robbery

This one may sound familiar to anyone who’s seen 30 Minutes or Less, but the real story is far more tragic. In 2003, a middle-aged pizza deliveryman walked into a bank, handed the teller a note asking for the money in the vault — and then lifted his shirt to display a collar bomb around his neck and chest. After stealing the money, he got about 15 minutes away before state troopers arrested him.

He started screaming that he had been forced to perform the robbery and the bomb was going to go off. The police surrounded the area and waited for the disposal squad to arrive — but before they could get there, the bomb started beeping and blew up. The tale only gets stranger from there, with FBI investigators, a long paper trail of clues, and dead bodies hidden in freezers. Worth a read if you enjoy truth that’s stranger than fiction.

4. $6 Billion in U.S. Tax Stolen in Iraq

In all the chaos of post-Saddam Iraq — with private security contractors, former Iraqi military and the US army all fighting for control of the region — someone made off with over $6 billion dollars worth of the money Congress dumped on the country. Special inspector general for Iraq reconstruction, Stuart Bowen, admitted he couldn’t account for the money, and called it the “largest theft of funds in national history.” The absurd quantity, complete lack of investigatory results, as well as the manner in which everyone just seemed to forget about it, makes this the largest and strangest of robberies.

5. The French Bank Vault Tunnelers

In 2010, a team of robbers used sophisticated and unknown tools to borrow underground and into a Parisian bank’s vaults — where they proceeded to rob over 100 safety deposit boxes. The value of the stolen items cannot be known, as wealthy clients confidentially managed their containers. A very similar crime occurred months earlier at a bank to the North of the city, with over 100 boxes robbed — making the same mystery team the top suspects.

6. Great Train Robbery

In 1963, £2.3 million (£40 million today) was stolen off of a post office train in England. The 15 member gang managed to pull off the caperwithout using a single gun. The money they stole was on it’s way to being burned, and the crew would have gotten away with it — had they not played a game of monopoly in a barn with all the stolen cash, and left fingerprints all over the place…seriously.

7. D. B. Cooper

A favorite among conspiracy theorists, D.B. Cooper performed the only unsolved air piracy act in American history.  In 1971, the unidentified man – known by his common epithet – hijacked a Boeing 727, extorted $200,000 and then leaped out of the plane with the money somewhere between Portland and Seattle. Despite years of searches, and an ongoing FBI investigation, neither the body or money have ever been recovered. The assumption is that D. B. parachuted to an uncertain fate, but his case remains active at the Bureau for over 40 years, and has amassed 60 volumes of theories.

8. Vastberga Helicopter Robbery

In 2009, an otherwise docile police force in Sweden had to face a highly organized gang of daring criminals, in the country’s first ever “Helicopter robbery.” The crew of thieves used a stolen helicopter to land on the roof of a cash depot building. They broke through glass with sledgehammers, blew through security doors with explosives and raided the cash store vaults — stealing bags of money as they made their escape. Police cars arriving on the scene had their tires blown out by caltrops that the criminals had littered all over the road. None of the thieves who were caught received more than 7 years in prison though, so if you’re going to practice your criminal skills in any country — Sweden might be a safe bet.

9. Thomas Blood and the Crown Jewels Of England

The year was 1671, Thomas Blood was an Irish Assassin (obviously) who decided to try his hand at robbery. His humble target? The crown jewels of England, which are held in the Tower of London and surrounded by guards … a lot of guards! Blood’s plan involved costumes, a fake title, a fake wife (played by a prostitute) and a fake nephew which he claimed would marry the daughter of Talbot Edwards — the Keeper of the Jewels.

After securing a private viewing, the gang knocked Talbot out, smashed the Jewels with mallets and stuffed them in their pants to make a run for it. They didn’t get too far though, with several guards reportedly tackling them off their horses. Blood lucked out, however, as King Charles II was so amused by the attempt, he pardoned Thomas and let him retire on a nice spot of land in Ireland.

10. Antwerp Diamond Heist

This 2003 robbery was dubbed the “Heist of the Century” — with large quantities of gold, diamonds and jewelry getting lifted from the Antwerp diamond center. The estimated worth of the missing items was than $100 million, but as it turns out there was more to the story. Leonardo Notarbartolo orchestrated the robbery, and lived beside the diamond center for three years prior to the crime. As part of his sophisticated ruse, Leonardo posed as an Italian diamond merchant in order to gain credibility at the center.

More than 123 out of 160 safe-deposit boxes were forced open, each of which was made of steel and had a unique key/combination lock. Leonardo was arrested, though his entire crew got away. Years later, he gave an interview to Wired magazine, in which he claims the whole thing was an insurance fraud attempt by a diamond merchant who hired him. Apparently, the actual score was closer to $20 million — leaving the lion’s share of the theft to be suffered by the insurance company.

Send in Labor to toughen and enforce the ADGSM.

David Llewellyn-Smith


  1. ErmingtonPlumbingMEMBER

    “But even more perversely, the east coast spot price is unmoved at $10.50Gj, roughly double the cartel agreed price when the Australian Domestic Gas Security Mechansim (ADGSM) was introduced.”

    If the ALP dont sort this out post election victory then their leadership deserves to be sacked by its rank and file membership.
    YOU could help make this happen.

    • Crispin Hull says the crux of the matter is the way the political parties are funded.

      Lobbying was a felony in many American states! It was seen as utterly wrong.

      Companies are not allowed to fund political parties in Canada.

      The AEC needs to adequately fund the political parties.

  2. bolstroodMEMBER

    I met Mark Butler yesterday arvo in a farmers shed near Lismore.
    There were about12- 18 people present. I will say that I left more impressed by him than I thought I would be.
    Discussion covered a wide range of energy topics, including a question abut whether his partner works for Santos, apparently not.
    There will be a minister for Science in a Shorten ALP government and it will increase funding to the CSIRO and other scientific bodies although Butler said it will take a lot of time to repair the damage to staffing and morale that the LNP cuts have made.
    On large scale land clearing he proposed Federal government oversight of the States and promised there would be no access to old growth forests for sourcing biofuels.
    On hydrogen Butler was definite that the ALP in government would only enable Green hydrogen (Renewable electricity to crack H2O). as opposed to Blue hydrogen from gas and Brown hydrogen from coal.His take on the fate of coal was so similar to MB’s that I asked him afterwards if he was an MB reader. He said he did not know of MB, but there was a spark of interest and he asked his minder to note it.
    He is very pro solar and wind and Electric vehicles and expects the price of energy options to rule the market.
    His take on the Climate catastrophe is that it is of the utmost urgency, and Australia as one of the largest per capita emitters and largest exporter of fossil fuels must show leadership.