NSW citizens should riot until Santos is shut down

Via the AFR:

Santos, the Australian Workers’ Union and the Narrabri local council have rejected a wall of environmental, farmer and activist opposition to a $3.6 billion gas project that promises to meet up to half NSW’s gas demand and help keep a lid on prices for manufacturers and households.

Claims by the anti-coal-seam gas lobby that 98 per cent of people opposed the project were “clearly fabricated”, Narrabri and District Chamber of Commerce’s Russell Stewart told the first day of public hearings on the project, accusing activists of “relentless fearmongering” on the venture.

But opponents lined up to attack the project and the risk it poses to water and land resources, with some on Monday describing the venture as “dangerous”, a “desecration” of Aboriginal heritage and lacking social licence.

Let’s be clear. I used to support this project. The gas shortage is real even if it is clearly artificial.

However, there are now a number of reasons why it should not go ahead. Two are uppermost.

The first is that it will do nothing to reduce gas prices. The gas comes out of the ground somewhere around $7Gj. By the time it is disgorged in Sydney it will be $9-10Gj gas. That is 300% higher than historic prices and above where prices are today.

This is made much worse by the simple fact that Santos is a member of the gas export cartel. That means that although Narrabri volumes are domestically reserved, the rest of its gas portfolio is not, so as Narrabri comes on stream it will divert other gas resources to export via its QLD export plant that is running well below capacity to sustain the local artifical shortage and high prices.

In turn, Santos will insist upon Brent-linked contract prices for Narrabri gas and will not lower prices at all.

Second, because community objections to this project are so extreme, a few years ago the NSW Chief Scientist was commissioned to produce recommendations to make the gas extraction safe. She produced sixteen rules. But owing to NSW parliamentary bastardry, the Narrabri project is now exempt from all sixteen.

In short, the Narrabri project will NOT lower gas prices and it can be deployed with no safeguards. None. Meaning that its millions of tonnes of carcinogenic salts can be stuck anywhere Santos feels like it. In a salt shaker and sold to your kids if it likes.

As things currently stand, the alternative solution to the looming gas shortage is gas imports. This is extraordinarily stupid in itself but it is better than Narrabri. The gas will arrive at around the same price as Narrabri on Brent-linked contract volumes. But the importers will also sell it at Asian spot prices. Today this would deliver gas for $3Gj and the Asian and global gas glut is so vast that prices will be low for as far as the eye can see.

Ironically, these spot imports will very likely include Santos gas that has already been exported for peanuts thanks to the cartel’s stranglehold on cheap local reserves that used to be sold locally.

In short, LNG imports will put a ceiling on the gas cartel whereas Narrabri will leave it intact. Imports will not poison the Great Artesian Basin whereas that outcome will be entirely up to the greedy liars of the gas mafia with Narrabri.

Of course, the only logical policy position is to break the cartel with domestic gas reservation at a fixed price of $5Gj on all of its assets.

But that can’t happen because the cartel has control of your politicians. That leaves citizens no other choice but riots until Santos is booted.

David Llewellyn-Smith
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Comments

  1. Stewie GriffinMEMBER

    Glad to see you’ve come around on Narrabri – it is Corporatisic bastardy and exploitation of the community and the environment. In short it is pure EZFKA politics.

      • Know IdeaMEMBER

        It reminds me of the decision to continue allowing the brumbies free range in the national parks.

      • haroldusMEMBER

        Rather than Environmental Scientists, in NSW we have….


        Ornamental Scientists!

        Thank you tip the veal!

  2. Internationally, gas prices are now $2-$3GJ.

    If we’re going for batsh1t crazy projects, we should just import our own gas rather than use CSG

    Anyway, the narrative is so distorted in NSW that 4000 people are expected to protest in Sydney on Friday for BLM, a problem that doesn’t even exist in Australia.

    • BLM, a problem that doesn’t even exist in Australia.

      Is that because we got rid of all our black people already?

      • codeazureMEMBER

        We don’t have a significant population of African Americans nor do we have American police practices, which is what BLM is about. Any application of this American political/social issue to our local situation is a stretch at best. Just because Aboriginal people have high melanin levels as well, doesn’t make it comparable in any way. But it is treated as if it is by the local progressive movement.

        • bolstroodMEMBER

          But we do have 400 deaths in custody of people ofAborigional and Torres Strait ancestry.

          • codeazureMEMBER

            I know & it’s been a terrible thing for decades. Dealing with that problem is important. But it is still a different problem with a different people in a different country.
            Sure, some might like to simplify it as white people oppressing dark, but few can seriously consider black American people/culture to have anything in common with Aboriginal Australians. The issue here is more about suicide, where in the US it’s more unlawful killing by police.
            I just see the use of BLM as a convenient label that has public awareness, so it is being co-opted by the progressive movement for their own purposes.

          • bolstroodMEMBER

            Err No,
            most of the 400 deaths in custody were due to neglect by offiicials or direct harm by officials.

    • NoodlesRomanovMEMBER

      Brisbane gas prices are AU$3.60/GJ (US$2.80/GJ).
      Links always get blocked, but search for AEMO STTM dashboard if you want to check.

  3. But that can’t happen because the cartel has control of your politicians.
    Oh, no! You mean even the Patriots from the CA?

    • ErmingtonPlumbingMEMBER

      Yes I’ll be there,… where are we all meeting up to march under the Macrobusiness.com.au banner!?
      As well as being a righteous cause marching under this banner Could be good for gaining new members too.
      “What do we want!?”
      “More subscribers!”
      “When do we want it!”
      “NOW!”
      I bags holding one of the banner poles.

  4. We should have an MB poll on the worst Australian companies. Big list I know but Santos would be close to the top, maybe with TCL, QAN and RIO.

  5. TheLambKingMEMBER

    the alternative solution to the looming gas shortage is gas imports.

    The alternative solution is to reduce our demand for gas!

    Ban gas connections to all new builds. Cash for Clunker scheme to get rid of gas heaters. Invest in more renewables and storage – so gas is used as a last resort, fast start power source.

    Drive the cartel out of existence.

  6. Yeah right, “16 rules”, only ever to be observed in the breach. Just like Greg Hunt’s “36 of the strictest conditions in Australian history” on Adani. The sooner that Sussan Ley “streamlines” all the environmental approvals to the states, the sooner that NSW can proceed with its program for Net Zero Koalas by 2050.

    • frag outMEMBER

      She was so reassuring on RN this morning with her “never mind the details” response, and instead focusing on some outcomes in the distant future that will never eventuate.

      She had a lot to say, a lot of nothing to say.

  7. This chart:
    https://www.macrobusiness.com.au/wp-content/uploads/2020/07/fyuj.png

    needs to be disseminated to every non-corrupted politician, business leader, and journalist in Australia, with a call to spread the word we must force the reservation of just a few percentage points of our currently exported-for-peanuts-price gas for the east coast states, to bring us back to parity with WA.

    Slimebag Santos slurping pollies are fracking us up the a$$

  8. Yea. Cause riots are so noble. DLS you make good points on energy and cartels and Australian policy, but people never need more license to be crazy, harm people and destroy other people’s stuff. Protests are very different to riots.

  9. bolstroodMEMBER

    I do not believe that the good people of Narrabri and surrounding districts will allow the Gas field to be built.
    For the farmers who rely on the underground water, the gas field spells the end of their enterprises, the ruination of their property values, the destruction of their communities.
    They find themselves in the fight for their lives.
    More power to them.

  10. Australia’s essential demand for NG (ie as a clean industrial and commercial fuel, in urban settings) is much less than its current demand, which includes power generation. A national programme of nuclear power station building, can replace coal and NG for base-load, avoid the environmental impacts of CSG extraction and hydro dams, revitalise our manufacturing and technology expertise, and serve our national security goals.

    • So you will have it (NP) in your backyard and offer to take on the risk of decommissioning and waste products. Let alone the costs of building. Knocked down to you!

      We cannot even get the owners to clean up obsolete coal power station sites 🙁

  11. All the talk about Santos & other following the ‘science’ to manage the coal seam gas risks makes me sick.

    It’s not science. It’s engineers winging it. This is not science it is an experiment.

    The science says there’s a significant chance the water gets buggered when fracking coal seams.

    The science also says that once the water is buggered it stays that way.