Via Domain:
Energy Minister Angus Taylor wants Australia to capitalise on depressed global oil and gas markets to deliver cheap energy for industry and boost the strategic oil reserve during the coronavirus crisis.
The price of crude oil has plummeted, driven down by a price war among producing nations and coronavirus restrictions. The spot price for liquefied natural gas contracts is tied to the oil price and the gas market, a major energy source for Australian industry and manufacturing, has also seen price falls.
East Coast wholesale gas sold for $4.30 a gigajoule on Tuesday, down from contract prices that ranged between $9 to $12 a gigajoule earlier this year.
Mr Taylor told The Sydney Morning Herald and The Age the government was looking to invest in gas projects to provide more cheap energy, and indicated he would also snap up cheap oil to boost Australia’s strategic reserves.
“Global pressure on gas and oil prices provides us with an opportunity for strategic economic stimulus in Australia to aid the recovery,” Mr Taylor said on Tuesday.
“Gas already plays an essential role in energy reliability, but it could be even more important through a gas-fired recovery. We want to have demand for affordable gas matched with priority upstream investment opportunities to bring gas where it is needed and provide economic stimulus.
This is incoherent. The Government is going to seed fund new gas projects amid a total collapse in global prices? Who is going to build these projects that will lose squillions with gas prices so low? Narrabri is breakeven around $8Gj versus $4.40Gj for contract prices today.
What the Government should be doing is slamming domestic reservation onto the gas cartel while nobody is looking. Just as it has already agreed to do with Centre Alliance to get its tax cuts through the senate.
That would guarantee future low prices for energy and underpin the repatriation of manufacturing that Scummo keeps banging on about.
More terrestrial gas won’t do squat. It’s too expensive.
