Gas cartel squeals like stuck pig

Via APPEA, the gas cartel’s cheap lobbyist:

APPEA needs to hear directly from the Government on the specifics of the proposed gas deal before commenting further.”

But we see no need for changes to the Australian Domestic Gas Security Mechanism (ADGSM) at this time.

The ADGSM is up for a review in 2020 and the gas market transparency work will follow on from ACCC recommendations that were recently made public.

The Australian gas market is comprised of multiple gas suppliers competing to win local business.

AEMO’s 2019 Gas Statement of Opportunities has confirmed that the gas market is well supplied until at least 2023.

The propaganda flow is thick at the AFR:

Queensland’s biggest LNG exporter has announced new gas sales deals with manufacturers Orica and Orora, lending weight to producers’ arguments that the east coast market is working and doesn’t need further government intervention.

Fertiliser maker Orica will buy 10.2 petajoules of gas over four years, starting in 2021, while packaging company Orora will buy up to 6 petajoules over three years starting from 2023.

At what price? And why today? Why are the terms confidential? Why did the QLD government have to broker a deal for Coolan Island recently?

If it were true that the market were working then none of these questions would be necessary. Nor would the spot price be trading at $9-10Gj when it supposed to be at $5Gj under the terms of the existing ADGSM.

The cartel is openly violating its own contract with the Government to supply locals at export net-back.

Why should the Australian public listen to it at all in such circumstances? Frankly speaking, on the end of such outrageous treatment, why shouldn’t the public demand expropriation of cartel assets if it won’t deal with the owners of the gas equitably?

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.


    • Unfortunately, that article whilst ringing true in on many points, has the name John Pilger attached.
      Anyone else but him.

    • Exactly.

      Hopefully Vic can do gas reservation itself? Dan Andrews ripped up the East West Link contract after winning the election.

      • John Howards Bowling Coach

        Dan Andrews is a moron. The East West Link should have been renegotiated not scrapped, the road is needed, just not under the terms and method put up. Instead he is beholden to Transurban and had they offered to build the East West Link in return for tolls on the Eastern Freeway Manchurian Dan would have agreed in a second. I have met Dan many times, he is probably the most unimpressive or inspiring polly I’ve met in my life and I have met many.