Always waste a good crisis. Gas cartel edition

Via The Australian comes the sound of the door closing on cheap energy:

Energy giant Shell said several of its high profile Australian gas projects were to blame for a massive $US8bn to $US9bn ($A11.7bn-$A13.2bn) writedown triggered by lower prices amid a Covid-19 demand shock.

The energy major – one of Australia’s biggest gas producers and foreign investors – will take an impairment of up to $US22bn on its global assets.

The largest write-downs were sparked from its gas business with the $US8-$US9bn figure attributed primarily to Australia including a partial impairment of its Queensland QGC unit and troubled Prelude floating LNG project offshore northern Australia.

Why didn’t we apply domestic reservation to QGC amid the crisis? This writedown would be a couple of billion heavier as export contracts were broken and nobody would even remember it.

We’d have smashed the gas cartel and delivered ourselves cheap energy for as far as the eye can see.

Instead we’re jerking off over a “gas led recovery” that will never come.

Talk about sub-altern.

David Llewellyn-Smith
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Comments

  1. PaperRooDogMEMBER

    Implementing ADGSM would be an essential buffer as we are pushed out of China markets. How does expensive energy fit with the recently announced security measures . ie increased military budget, cyber security etc, expensive energy just makes us weaker & less competitive. Will her LNP put the interests of Australia above those of international companies who play virtually no tax?

  2. How would dom gas reservations work for projects already producing? It sounds incredibly illegal to just change the rules halfway through and demand that operators re-reoute exports for domestic use. This would completely change the capital makeup, existing contracts and everything else which was never agreed to by the gov/operators prior to commencing the project. Plus, changing the rules halfway through is a huge red flag for future projects and investment as corporations will be turned off by government intervention risk. Am I missing something?

      • Beat me to it.

        In any case, there would be no illegality. There would be squeals of “sovereign risk” but those would count for nothing because everyone who might be worried about future investment in Australia will know the real story.

  3. Why didn’t we apply domestic reservation to QGC amid the crisis? This writedown would be a couple of billion heavier as export contracts were broken and nobody would even remember it.

    Angus Taylor and his future employment prospects, that’s why.

  4. bolstroodMEMBER

    No wonder the Govt and the fossil fuel industry don’t want Renewable Energy.
    There is nothing like the super, super profits to made from renewables as there is from Fossil Fuels.

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