Albo must immediately smash the gas cartel

There are lots of things for Albo to do and the last thing on his mind is picking a fight with resources firms. But that’s what he must do:

Surging gas prices have claimed another victim with a major NSW wholesaler forced to shut its doors, saying thousands of jobs were being put at risk due to an “unprecedented rapid rise” in gas and coal costs.

Weston Energy, which provides gas to more than 400 companies and government agencies, has ceased trading with immediate effect meaning 7 per cent of the east coast’s commercial and industrial market will be forced to find a new supplier.

The company said it could no longer finance cash flow requirements of its trading portfolio “on a timely basis” with prices rising over 180 per cent since April, and almost three times higher than at the start of the year.

“Rapidly rising energy prices have put hundreds of Australian businesses, and thousands of jobs at risk,” Weston managing director Garbis Simonian said.

“The fact that Australia is the world’s largest exporter of coal and gas and yet our domestic prices are at unprecedented high levels, highlights real policy failure.”

“The circumstances now buffeting Australian energy markets have been foreseen for some time, but little has been done to prepare Australia’s energy producers and users for this impact.”

It is no more or less complex than that. We have massive quantities of surplus gas coming out of the ground at $1Gj but it’s all being sold to China by an export cartel for $31Gj.

That has left the local economy short and the cartel is now charging us even more than the Chinese at $35Gj.

The answer is already in place. The Australian Domestic Gas Security Mechanism (ADGSM) can be triggered to force the cartel to sell more gas here until the price falls to a reasonable level around $7Gj.

The upsides for this are immense:

  1. Enormous pressure removed from all east coast utility bills both gas and power.
  2. Enormous pressure removed from supply-side inflation
  3. Enormous boost to domestic manufacturing confidence to aid Labor’s industrial revival platform which the cartel will destroy at these prices.
  4. Guaranteed low emissions baseload power supply as renewables roll out.
  5. Massive kick to the crotch of a prone Coalition.
  6. Labor underlining for all and sundry its national interest credentials.
  7. Zero impact on the budget given the cartel pays no tax and growth will lift.

The ADGSM is a Colaition policy. There is ZERO political risk in triggering it.

In fact, if you don’t do it, Albo, we can only assume that, too, are on the cartel payroll:

Everyone wondered whether there was some connection between the government’s direction and its financial indebtedness to the fossil fuel industry. But no one could prove it. Why? Because the Commonwealth doesn’t have real time disclosure of political donations.

Only now, long after the public’s attention has moved on, have those suspicions been confirmed. Thanks to the donations data recently made public on the Australian Electoral Commission site, we know that fossil fuel companies — and the gas industry in particular — were giving generously to both major parties at the time, a whopping $1,329,754 to be precise, with just over half of this from the gas industry.

The Coalition got the lion’s share ($731,534), although Labor collected the not-insignificant sum of $598,220.

If you add to the Coalition’s total for that year the just over $1 million the LNP harvested from fossil fuel via its fundraising entity Cormack, the Coalition’s indebtedness to gas, coal and mining in the 2020-21 period swells to $1,735,048.

Is this proof of corruption? No, but it certainly gives reason for voters to consider whether corruption has taken place. To wit, whether the gas-led recovery policy was designed and intended by the Morrison government to serve the public interest or private ones.

Are you on the payroll, Albo?

Houses and Holes

Comments

  1. Ronin8317MEMBER

    It’s not Albo, but Jim Chalmers who needs to be convinced. That means Australia is stuffed.

  2. I can’t remember who was asked it, but one of the hopefully then-oppo Labor people was asked about EXACTLY this (was it Jim Chalmers in the Treasurer debate? I think so) and he waffled on and didn’t answer the question.

    It was a direct question maybe from Clennell – will you pull the ADGSM trigger.

  3. I expect the usual suspects will come cavorting on here saying Labor won’t be able to do it Because Diversity Hire.

    • DingwallMEMBER

      If Labor or the Libs had the right priorities for the country, then it will be or would have been addressed.
      Unfortunately the hard stuff and therefore the actual outcomes needed are, conveniently, down at the bottom of the priority list.

  4. DingwallMEMBER

    Immigration
    Housing
    Gas
    Lobbyists (ie the real power in the country)
    The list goes on..

    Will Labor roll up their sleeves or will they be at high tea with the Teals…………

      • DingwallMEMBER

        I am watching their work with ICAC with interest and hope.

        Oh but based on the last 20 years of governments, not holding my breath

        • I’m much less sceptical.

          I think we’ll have an ICAC stood up very quickly.

          Labor looks like they’ll get to 76 so it’ll pass the house. Greens may kybosh it quick sticks in the Senate if it’s not wilful enough.

          I think this will be the less problematic change despite all the hyperbole

    • Yes to all those. 1. Sovereignty …our gas goes to us first at cost plus as it does in other gas producing countries, pass tha Anti money laundering by Property, second tranche Bill, stop foreign future ownership of homes and land, etc No dual passport carriers in parliament, no serving other entity, like implementation of WEF policies, this is a private organisation with very unpleasant policies and is a foreign agent in respect to Aus.
      2. Financials, put in Postal Bank..thus needs of rural covered, govt guarantee on deposits that really works, lending to small business, infrastructure,
      3. Education..collapse is last thing empires do, stop foreign intake, cut the fancy salaries for business managing types running units, fund STEM strongly. Fund CSIRO strongly to get innovations for AUS, not sold for pittance to China. Support the manufacturing that comes out…like the prawn farming, fish farming etc. Support better health, medicine for healing.
      4. Fund and support manufacturing of all types fro independence when the west collapses 2030/2032. Cheap energy from 1. to support manufacturing. Funding via 2. Post office bank. Innovation and work force from 3.
      5. If really concerned about global warming, based on C02 set up massive tree planting of native vegetation. Food trees in streets ..nuts, citrus etc. Plants need it for growth.

  5. FFS! We are STILL paying more than foreign buyers!!! I’d assumed with the massive price rises this wouldn’t now be the case.

    • TailorTrashMEMBER

      And add insult to injuries they don’t even give anything back in taxes ……
      yes Albo has a job ahead of him indeed …will he do a Whitlam crash through or crash ?

    • If only we had a media that focussed on this issue instead of all the LNP sympatico dross we have seen especially from the national broadcaster

      They need to nail this to the mast
      SMASH THE GAS CARTEL

      they’ll be national heroes

  6. Until its in mainstream and some simple numbers are attached to it re cost of living, (ie. Like Fuel prices) nothing happens. Too hard to explain and easy to hide from

    • I think a lot of people untuitively understand the notion: “we’re sending it all overseas at X and buying it back more expensively at Y. We could be reserving some at Z. By the way these companies pay no tax on profit so the gas is basically been given away to them. Your gas.”

      • I think you’re giving ‘a lot of people’ more credit than they deserve.
        Heard little to no mention during the election.
        If people knew the numbers they’d squeal
        If people knew the tax setting they’d squeal
        If people knew the West has gas reservation and the East doesn’t they’d squeal
        If people knew there’s a reservation trigger that’s still in the drawer they’d squeal.
        If people knew how much it’s killing our meagre manufacturing they’d squeal
        If people knew the whole picture they’d scream bloody murder ……. but they don’t know
        I haven’t heard gas mentioned in mainstream by virtually anyone other than greens wanting to ban it, and it’s not that loud either. Coal is the bad man !

  7. Fake Greens must ban LNG exports.

    The Biden administration has also come under pressure from some Democrats to ban LNG exports, in a bid to reduce greenhouse gas emissions.

    The United States had a Crude Oil export ban until 2015, maybe we ban LNG exports until inflation comes down below 5%? Seems odd to be selling LNG to China

    • I think the greens want to get a ban on thermal coal and gas right?

      To make this more palatable – realising the realpolitik – a compromise might be worth considering on gas.

      We’re reserving 20% of all your gas Santos and now you’re paying this tax rate. if not, we’ll ban your exports and your gas will stay in the ground coz we don’t need it all locally.

      They’re not paying tax on it so what’s the loss.

      https://www.ato.gov.au/Business/Petroleum-resource-rent-tax/

      “Dear electorate – ignore the whining of the gas companies. They don’t pay tax right now. They sell our gas off shore and we buy it back for more. From this date we’re forcing them to sell it domestically at Y and it’ll save local industry and your bills will go down X. We’ll reinvest the tax in fixing the grid and making interest free loans for PV and batteries available to masses as well as building EV charging stations everywhere”

      Does it make the gas peaking plants more viable in the medium term to help get off coal?

      Maybe I am dreaming

      • They’re not paying tax on it so what’s the loss.

        Yep. We will benefit if exports are banned.

      • Does it make the gas peaking plants more viable in the medium term
        That’s an interesting question, in theory the answer is yes but the theory and practice don’t really seem to match.
        Part of the problem is that Big Batteries have simply stolen the pricing Cherry off the top of the NEM cake.
        Can Gas peakers steal it back? In theory yes but in practice we need to integrate a lot more storage (to increase the value of solar PV farms) and these new big Batteries will be built regardless of what happens to the NG price.
        Once you have the Big Battery your naturally going to use it anytime the NEM market price gets off the floor and you’re going to respond much quicker than any Gas Peaker.
        This is not just my pet theory it’s what we’ve been seeing for at least the last two years.

  8. ErmingtonPlumbingMEMBER

    Those whose careers are reliant on the success of the political party that employs them are reluctant to pick a fight with well resourced centres of power.
    Just look at how smashed the Labor Party got for proposing the super profit resource tax. Organise money launched a remarkably effective assault against them.
    A grassroots movement is needed that demands a redistribution of control over Australian resources for the benefit of ALL Australians
    Ownership and control over OUR natural bounty should not just rest in the hands of a few Australian billionaires and foreign shareholders.

    Now that labor is in power maybe a good place to start might be for people to join the Labour Party and start making some loud noise,…from within and below demanding the leadership find the balls to fight again on this crucial issue.
    https://www.alp.org.au/about/join-labor/

  9. turvilleMEMBER

    can’t argue with this article and it goes much further. Not only the Gas problem but also the treatment (or lack of) of windfall profits being made by the bulk commodity exporters (Iron Ore, Thermal and Metallurgical Coal). A huge amount of revenue completely missed by the Feds/States. An easy increase to existing resource taxes and the Fed and or relevant state Govts not to be blindsided by threats from company executives. Impose a set of caps and floors or upward and lower bands of tax thresholds where various rates kick in/kick out. The mining companies do not own the land – by and large it’s leased. This is a good example of the situation in QLD

    https://www.business.qld.gov.au/industries/mining-energy-water/resources/minerals-coal/authorities-permits/applying/authorities/mining-lease

    Albo – take the big end of town on – coal revenues won’t last forever !!!

    • rob barrattMEMBER

      It’s highly unfashionable to pay income tax. Most wealthy individuals in Aus have family trusts to avoid that kind of thing. I used to have access to full details in a previous job. You’d just love the names. As for companies, well, try finding a builder responsible for inflammable cladding. The shell companies disappeared five minutes after the buildings were completed.
      Under Labour? The building commission is scheduled for early assassination, and they’ll find some way to prevent the anti corruption commission from having any teeth (at least, where Labour pollies are concerned)..

      Situation normal

  10. I like the “the Coalition could have done this but wanted to keep gas prices high” angle.

  11. It’s going to be interesting to see what unpopular but beneficial policies get rolled out. Greens may be progressive nuts but they are not corporate cronies. Some of their caring might rub off in the right direction, such as corruption and rich vs poor issues. I just hope the don’t destroy our energy infrastructure.

  12. I definitely understand the arguments for gas reservation and I support the idea whole heartedly
    BUT exactly which politicians in the Greens or the Teal alliance values Manufacturing?
    Seriously can you name a single member of this grouping that would be pleased with a Manufacturer (like say a Cement maker or a Metal smelter, or Brick maker) growing their business, or even just surviving. How about supporting a Garbage Incinerator in Western Sydney, that sounds like a Teal alliance objective if ever I heard one (ah..Not!)
    So apart from support for Domestic heating / cooking, which gas reservation objectives will really resonate with these swing voters in Parliament?
    Why would Albanese want to pick a fight with the Greens and Teal’s, this early in his PM’ship?
    Makes no sense especially when he can just sit back, watch most of these companies fold and book these FF savings as huge steps toward a Zero Emissions economy.

    • It could easily be dressed up as attacking a fossil fuel rebate/ benefit. At the moment, none of the big gas extractors will ever pay PRRT so the industry is seen as getting a free ride.

    • Environmentalists even want gas stove installations banned for new houses lol. I think it’s happening in California.

  13. no one is not on that payroll.
    we don’t even get the side of the vacuum line, just a portion of the dust.