Morrison’s mates stuff their faces with power pork

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I long ago ran out of pejorative adjectives to describe the Morrison Government machete hacking into the Australian energy market. Today it swings another stroke into the pulpy corpse:

  • $600m will spend on the Hunter white elephant power pork station.
  • The 660MW beast will fill a notional shortfall predicted by the AEMO to 150-200MW, easily and much more cheaply filled by private energy storage.

This has nothing whatsoever to do with providing cheap, secure and carbon mitigated energy. It is the usual combination of political drama to keep the Hunter electorate fearing energy transformation while feeding Morrison mates in the gas cartel.

The feedstock for the new plant will come from the million-year water table poisoning Narrabri gas fields being developed by gas export cartelier Santos. As we know, this project will do nothing to lower gas prices. First, because it is too expensive. Second, because without blanket reservation, STO will divert other, cheaper gas currently supplied locally into higher exports.

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But wait, there’s more. Snowy Hydro will build the new power plant. It is run by none other than David Knox. He is the very former CEO of STO that point-blank lied in 2011 about his gas reserves being sufficient to supply both his new LNG terminal and local customers without triggering price rises at home.

When his plant opened, Santos was so short of reserves that it bought every spare molecule of gas in the broader market. Australian gas prices skyrocketed from $3Gj to $20Gj, driving electricity prices mad. Even as the global gas price collapsed on the supply flood, forcing Santos to write down billions on its dud plant. Knox was sacked.

Now he is back to build a gas power plant with public money that will again lift power prices that would have fallen had he and Morrison just stayed away.

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Finally, just to add a delightful layer of diarrhea to that shit sandwich, you should know that STO has donated $1m to the Coalition since 2010.

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.