Comedian tries to make sense of Aussie gas cartel

Is funding a new gas-fired power plant in the Hunter Valley “a grab for votes” in the upcoming by-election? #QandA pic.twitter.com/OSov1ZLeWa
— QandA (@QandA) May 20, 2021

It’s pretty simple and not funny:

East coast LNG exporters lied about having enough gas when they built their export plants.
They then bought all of the cheap third-party gas reserves and either shipped them as well or refused to sell them locally.
The solution is domestic gas reservation at a fixed price to break the cartel. That is, gas is a failed market.
Second best by a long way is LNG imports to break the cartel.

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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.