Federal Resources Minister Matthew Canavan is under pressure to consider a blanket cap on LNG exports from Queensland as activist groups, including The Australia Institute, argue the existing LNG export control policy is only entrenching high prices for east coast gas users.
“Placing a cap on LNG exports would ensure that gas saved by efficiency measures and switching would go to Australian users rather than being exported by LNG companies,” said TAI principal adviser Mark Ogge, calling also for energy efficiency and fuel switching to reduce gas use.
…Lock The Gate Alliance is meanwhile calling for a cap on exports set at about 80 per cent of the current capacity of the three LNG export terminals on Gladstone’s Curtis Island.
…The group said an alternative approach would be to amend the trigger for the Australian Domestic Gas Security Mechanism to include a price – say $5 a gigajoule in the southern states – which it said would represent “a fair rate of return” to gas producers.
Both approaches are fine.
Meanwhile, Nev Power is pushing another solution, also at AFR:
One-time iron ore heavyweight Nev Power says Australia lacks the infrastructure – including a transcontinental gas pipeline – to capitalise on its natural advantages in energy.
Mr Power joined board of Strike Energy on Wednesday in a coup for the company as it looks to commercialise a major onshore gas discovery in the Perth Basin.
…Mr Power said a gas pipeline connecting the west and east coasts, an idea he first championed while at Fortescue, was a potential solution to nonsensical issues with supply and cost.
Previously there has been debate around the pipeline:
The Department of Energy last month quietly released the findings of the study by ACIL Allen into a pipeline that would connect the massive gas fields of northwest Western Australia to the east coast.
The study found that while the $5.8 billion pipeline was technically feasible, “commercial and market risks present major challenges for the project”.
But Mr Barnett disputed the study’s findings, arguing that the right government support could make the pipeline a reality.
“It is an absolutely doable project,” he told The Australian.
“Gas wouldn’t become the major source of energy on the east coast but it would stabilise the system. It gives flexibility and it would solve the crisis. It is a silver bullet.”
As a publicly-owned stimulus project the pipeline makes sense. $6bn would be well spent if it dropped east coast gas prices to $7Gj. That is still expensive but it is one third lower than today, helping stabilise manufacturing and the power grid by giving certainty of supply to gas peakers. Retail electricity prices would fall by 20% so the $6bn would deliver roughly the same in economic stimulus via cheaper utility bills for households and businesses.
It’s much more productive spending than another tax cut gone into funding a lift in house prices.
One would have to ensure that there was enough western reserves to not lift the WA gas price but that’s kind of the point of the Strike Energy idea.
