March Keith Pitt to the gallows

The Morrison government’s own competition regulator, the ACCC, is apoplectic about the outrageous behaviour of the east coast gas cartel:

Mr Sims said that while the spike in spot gas prices on the east coast was “extremely unfortunate” for those buyers exposed to them, his main concern was in relation to contract prices…

“I’m not going to predict which way prices will go but I am very much hoping they’re going to go down, because once you get contract prices over $10 [a gigajoule], that makes it really hard for some manufacturers as to whether they can continue or not,” he said.

Prices are already well above $10Gj. Although Asian buyers of gas can these days can get contracts as low as 10% of the Brent benchmark, Australian bulk consumers can’t get deals below 14%.

Today that means that you can buy contract gas in Asia for $10Gj while it costs $14Gj here. This is why I have argued for years that we should import LNG to break the cartel.

But even that argument is only based upon desperation. The sensible approach is to break the Australian export cartel with a domestic reservation policy, at a fixed price if necessary. Just as WA does.

This is especially the case now amid the developing cold war with China. We only have high gas prices at all because China is vacuuming up two-thirds of LNG exports from the east coast. Using the gas to make cheap power for its industrial machine that makes, among things, weapons that it is pointing back at Australia. Paul Kelly revealed last weekend that PM Morrison recently appeared at the G7 to present China’s 14 conditions to end democracy:

Interviewed by Inquirer, Smith said China “had kicked some own goals”, and he branded the 14 points released by China’s embassy as the conditions to repair relations as “stupid and nuts” – with Morrison tabling these points at the recent G7 meeting for the benefit of other leaders.

Yet here we are, allowing this trade to hollow out the remnants of our own industrial base, which is critical in the production of counter-balancing strategic output.

So, how does the Morrison government’s point man, the Resources Minister Keith Pitt, respond:

But federal Resources Minister Keith Pitt rejected that, saying the mechanism is intended to ensure long-term supply rather than address short-term price pressures. It would in any case only apply to 2022 supply rather than the current market tightness.

Mr Pitt said it was “the height of hypocrisy” for Labor leader Anthony Albanese to give advice on gas when he wants to ban government proposals to open up more areas for exploration off Victoria to ensure long-term supply.

There is no gas-led recovery because there is no domestic reservation. Any cheap new gas will simply be shuffled to exports by the cartel to keep local prices tight while Australian industry will keep being hollowed out.

No country can survive this kind of suicidal assault for very long. The ADGSM must be triggered and the local gas price smashed below export net-back. Preferably to a fixed price at $5Gj. If that means breaking Chinese supply contracts and the price rises for it then all the better.

Any other outcome is the kind of treason that should end at the gallows.

Houses and Holes
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Comments

  1. I doubt there’s a serious Aussie manufacturer that hasn’t learned their lesson. It’s simple really
    Australia hates Manufacturing, so just F-off
    Yep that’s right anyone who makes anything should have already figured out the game but for the laggards let me put it succinctly just [email protected]#$-Off. We don’t need you and we don’t need your stinking fumes and we don’t need your kind of jobs, so just F-off do it and do it now!
    There that should be clear enough, just get Scotty from Marketting to sign it and we’ll have complete our journey from a stone age culture to a “service” culture in a little over 200 years
    Aussie Aussie Aussie ….

    • Australians Don’t hate Manufacturing – although it’s been Bernaysed since the 80’s as unsexy. The Neogliberlism ideology saturating Political & Capitalist strata really does hate it – Greed is God! Most Aussie manufacturers of note have already gone as you’d know (although you might not know of some who came back because they couldn’t find Quality or the vaguest understanding of it).
      There’s also a Few that still exist on a shoestring & a few budding madmen that are trying despite the odds. They do it hard but have managed to retain their Quality – something that offshoring has never even understood above the mighty dollar. Wuflu affecting JIT hasn’t changed minds about global integration – it couldn’t grasp it from their cold dead hands. What might is a gradual acceptance of 40% global price rises, an education of what Quality is & expectation for such in a product. And lots of landscape shots Clockwork Oranged onto every billboard of the ecological damage wreaked from those that don’t mind shitting in their own nests for a fast buck.

  2. Display NameMEMBER

    Keith Pitt is little more than someone else’s useful idiot. The LNP have privatised themselves to a group of multi nationals who have zero interest in the country other than as a revenue generating opportunity. I am sick of the corruption. It is constant. From parachuting mates into senior regulatory and public service roles (No wonder the vaccine rollout is [email protected]) to privatising everything for a song to their business associates.

    • codeazureMEMBER

      “The Federal Minister Representing The Interests Of Resources Companies, Keith Pitt” to give him his full name. He’s only doing his job, acting in the best interests of his future employers. What a champ!

  3. Ronin8317MEMBER

    When it comes to politicians, watch what they do, not what they say. ScoMo is talking tough with China, yet when it comes to action he is doing zilch. Port of Darwin is still operated by Landbridge, and we’re still sending cheap gas to China even while Australians pays more. The gas cartel needs to be broken up, which is suppose to be ACCC’s job.

  4. The gallows for the dogs organising this theft? Strong language, but as I’m facing a quarterly gas bill of $800, it sounds like a reasonable proposition to me.

  5. Ghost of Stewie Griffin

    In the new global liberal order that progressives are constantly cheering, a nation cannot use its own resources to perpetuate its own society and values – all decision making on resource allocation must be deferred to the market. Any other solution or decision making process might be bias with cultural values and favour one group over another.

    This is the way in the Economic Zone Formally Known as Australia where there are no values other than accepting all values. The best that resident consumer units can hope for is that we can import our own gas back from the global markets….

      • TailorTrashMEMBER

        …and let’s issue some investor visas to some PLA connected immigrants to run the export import operations
        ……“Straya needs investment and the skills “ that
        this will bring

  6. I doubt that suggesting one of our Federal Ministers (or anyone for that matter) should be hung, improves the quality of this site, even if it is in jest!

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