Bernardi: Smash the gas cartel

Via The Australian:

If we want more affordable gas and cheaper, more predictable electricity generation then we need to increase the gas supply. This is also the view of the Australian Competition & Consumer Commission. If we want to receive billions of dollars in royalties and unleash resource-driven jobs and prosperity, we need to force the development of the Bowen Basin gas resource.

You might think that’s easier said than done but it could start with a frank conversation between Scott Morrison and some gas industry decision-makers.

It might take some motivation in the form of legislation, holding costs or even an undeveloped resource “lock-up” tax to encourage them, but a simple direct request also might be enough. The carrot is always better than the stick.

…Large foreign multinationals apparently believe they run governments, rather seeing themselves as effectively contractors for the Australian people operating here by invitation.

Bravo. This is of course in response to Shell, which is playing silly buggers with Arrow, yesterday at the AFR:

Shell is edging towards a long-awaited decision to develop about 5 trillion cubic feet of gas at its Arrow operation in southern Queensland, but senior management has made it clear a go-ahead later this year is not a foregone conclusion after several “surprises” from governments that affect the $10 billion project.

The tight east coast gas market is understood to have been a key topic of discussion at a meeting in Sydney on Tuesday between Shell’s global chief executive Ben van Beurden and Prime Minister Scott Morrison.

It is also expected to have been raised by federal Resources Minister Matthew Canavan in Perth late Wednesday, when he was to attend a dinner to celebrate the start-up of Shell’s Prelude floating LNG plant.

As Bernardi suggests, the solution is simple. Apply “use it or lose it” powers as we have already done in Bass Strait.

David Llewellyn-Smith

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.

Latest posts by David Llewellyn-Smith (see all)


  1. Lord Walter Mountbatten - Adventurer

    Good Lord! This Bernardi fellow, even though he’s a Catholic, appears to have the same common-sense as though eminently sensible but electorally weak Centre Alliance duo.

    Dark storm clouds appear to be gathering over yonder cartel.