Morrison’s gas cartel pillages billions


It still gets the least amount of press of any of the Morrison Government’s disgraces thanks to comprehensive MSM stupidity. But pound-for-pound, there is no more horrendous pillaging of Australia than that conducted by the Morrison Government’s protected gas cartel.

Over the Christmas break, there were significant developments in the global energy crisis that illustrate just how much money the cartel is now stealing directly from Australian’s pockets.

The global gas price jackknifed higher in the past month in both spot markets and, more significantly, futures markets. Prices that would just one year ago been thought of as preposterous are now the norm out to mid-2023 and it is not until 2024 that this price windfall reverts to mean:


The driver of this price windfall is the gas crisis in Europe over the Nord Stream 2 pipeline which has now been overplayed by Russia. By starving Europe of gas until it approves the pipeline, which will not now happen until H2′ 22, Russia has given Europe every incentive to diversify elsewhere.

That other supplier will be the US where LNG export plants are booming and will continue to do so. Asian gas futures markets are now pricing a longer timeframe for price mean reversion to get this done.

In the meantime, Australia is enjoying a huge gas price windfall with equally large budget revenue flows to match. Or, rather, it should be, but isn’t because the gas cartel pays no tax thanks to the fantastic rorting embedded in the Petroleum Resource Rent Tax.


To give you an idea of just over the top this rorting is, consider the following table of breakeven prices for Aussie gas:

Remember that these are all-in costs and a lot of the capital that make up these breakevens is already written off. The cash costs are now fabulously low, well below $5Gj for most if not all. They are selling it in Asia for $34.


The gas cartel paid no tax in 2019/20. None from Origin, Santos, Shell nor Chevron. The PRRT shows no boost from windfall profits ahead:

We are talking tens of billions of foregone tax revenue here.


What we are getting instead is this. Local gas price rises:

Even as we get NOTHING from the export price windfall of our own gas, the local price of gas is once again through the roof, hollowing out manufacturing and delivering households higher utility bills.


Moreover, the majority of Aussie gas goes to China, where it is used to build weapons to end Australian freedom. And the whole box and dice lifts the Australian dollar making the hollowing out that much worse.

This is not the sensible export of the national endowment of energy resources. It is the pillaging of Australian gas by a vicious cartel that would sell its own mother to the Nazis for a few dollars more.

So, what has your Morrison Government done about it?

  • When Senator Rex Patrick made a gas reservation policy a condition of signing up to $30bn in tax cuts, Morrison lied to him, took the tax cuts then never delivered the policy.
  • After the Turnbull Government established a review of the PRRT, the Morrison Government buried it.
  • When skyrocketing local gas prices destabilised Australian decarbonisation, Morrison blamed renewables and rewarded the gas cartel with new tenements to despoil, plus built it a government-funded, white elephant gas turbine.

In short, the Morrison Government has protected the gas cartel daylight robbery at every turn.

This is treason so vast that the gallows are the only sensible response.

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.