LNG white elephants worthless

Another writedown of the value of Australia’s worthless LNG export refrigerators today:

More writedowns to come with those long-range forecasts still too high for oil and, as we go forward, crashed spot prices will overtake Brent benchmarks in Asia as well.

By my calculations, that’s now roughly $4bn in writedowns for a $6bn investment, in just five years. The fridges are worthless.

Yet the entire east coast economy is bailing out this apocalyptic capital misallocation as the firms use their worthless fridges to artificially tighten local gas supply and gouge 90% of Australian households and business.

We are so far past unbelievable that at this point that we can only call it organised crime.

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About the author

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.