Energy war profiteers nuke Albo

Australia’s failed energy markets are now a full-blown national security crisis. Not a national interest crisis. A national security crisis.

A war-profiteering energy cartel is pillaging the Australian economy, Most especially manufacturing, but absolutely everybody else as well.

I am talking about scores of billions of dollars ripped from everybody’s pocket as if some greed singularity had opened everywhere all at once.

It is doing so without an Australian Government to fight it, and in the face of an Idiot Mainstream Media (IMSM) preoccupied with quaint notions of more women in parliament:

Energy retailer ReAmped Energy has urged its 70,000 customers on Australia’s east coast to find another supplier or face a doubling of their power bills from July 1.

With energy retailers on the brink following a massive increase in wholesale prices this year, there are growing concerns some retailers might go under, like in the United Kingdom.

Australian Energy Retailer chairwoman Clare Savage has already warned wholesale power prices would stay high in NSW and Queensland for at least the next two years.

This is the tiniest tip of an iceberg that is right now ripping a screaming hole in the side of the SS Aussie Titanic as wholesale gas and electricity prices rise 500-1000%.

Australian manufacturers are being wiped from the face of the earth by gas prices that are unfathomably high when the gas itself comes out of the ground up the road for $1Gj but is being sold at a regulator enforced fixed price of $40Gj.

In power markets, the duck curve is dead. Night and day, east coast electricity prices are locked on $300M/h, up 600% in a matter of months. It may get worse.

ALL Australian businesses and households on the electricity grid east of WA are beginning to see riotous utility bill hikes for as far as the eye can see. Both are going to retrench viciously.

Utilities make up 3% of the CPI, which is about to double and double again, as it pours inflation into the other 97%. Including building materials where cost inflation is already annihilating the sector.

The RBA is being cornered into massive rate hikes. Household balance sheets and the financial system are, therefore, at fatal risk given house prices are already falling fast.

Australian bond yields are seeing widening inflation spreads to the US which will drive up the AUD even as the economy buckles.

All this, while the gas half of the energy war-profiteers sells its product to China – Australia’s strategic rival and greatest threat – 25% cheaper!

It is no exaggeration to say that this energy shock, delivered by a few mining companies, is an imminent threat to the viability of the sovereign, as sure as if Australia were bordered by Russia and it was refusing to supply us with energy as an act if war.

This is so beyond the pale, so reckless, and so outside of any identifiable social contract by the war profiteers, that it opens a stunning opportunity for the Albanese Government to restructure the entire energy sector.

I have argued that an export levy on commodity sales to end war profiteering and crash local prices is probably beyond the Albanese Government’s political courage.

But these few companies have now destroyed east coast gas markets. The regulator is imposing ridiculously high fixed prices, with electricity in danger of following.

This is an act of economic war, not just war profiteering. Thus it opens the way for the Albanese Government to go ALL-OUT in response.

Newly appointed Resources Minister Madeleine King and Energy and Climate Change and Energy Minister Chris Bowen must immediately impose a 100% war profiteering export levy on every LNG and coal export above pre-Ukraine prices. Stick the scores of billions in a sovereign wealth fund, pay down debt, or cure cancer with it.

Or not.

Sadly for Australia, the Albanese Government appears to have no idea of the magnitude of the crisis and no balls to boot:

As his first act as PM, Albo should be seizing the energy robber barons’ ill-gotten gains and ripping the economy back from their claws in the name of every other Australian.

Instead, he is committing suicide in week one.

Houses and Holes

Comments

    • Strange EconomicsMEMBER

      Day 2.
      Gas bills double as snow falls. (ie soon from 600 to 1200 a quarter, that’ll wake up the punters)
      So much for the cost of living being priority no 1.
      Meanwhile even the UK Tory Party adds a Windfall profits tax, outbidding UK Labour. after waking from an endless string of “did not happen” wine parties).
      Perhaps its time for a Future Fund like Norway.

      • meanwhile English food banks are struggling to give their potatoes and root veg away as it costs to much to boil them.

    • TheLambKingMEMBER

      ADGSM.

      Pull the damn lever.

      I think ADGSM is only a mechanism that guarantees supply, it does not specify price. I think it assumes if there is enough supply the price will drop. I think the mechanism assumes Japan price – costs to liquify+ship. So will only drop $5Gj on the crazy high international price.

      So triggering ADGSM alone is not enough.

      • We produce far more than we require.

        Gas is now the marginal price setter in wholesale energy markets. It’s also being price capped by AEMO in VIC/NSW/QLD

        We definitely have enough supply. But even if we don’t pull the lever.
        Adding supply will ease pricing pressues regardless.

  1. RomulusMEMBER

    If Labor don’t trigger the ADGSM in the next month or two that will be incredibly stupid. They will be facing the ramifications of not pulling the trigger soon enough for a very very long time. Get ready for Labor can’t manage the economy to be drilled into peoples heads again.

    In terms of a medium term solution:
    Import terminals in the East Coast to get around lack of pipelines
    WA will be having some cheap new gas coming online in the next few years from Perth basin discoveries – currently no exports are allowed of new gas. Once enough of the new domestic gas is reserved for WA, they can sell a portion of their gas to EC Aus via import terminals at the AGDSM price + logistics costs. The balance can be sold to international markets.
    Long term Strike are looking at producing fertiliser so allowing them to generate cashflow will be supporting that venture as well.

  2. Then look at our new Climate and Energy Minister, and his political record says almost certainly that he will sit on his hands. It’s not a race. Even if our non-mining industries rebelled, the fuel and ore miners have all the clout.

    • Uncle WattleberryMEMBER

      Let’s wait and see. He was a very busy lad in the Rudd/Gillard years in his various ministries. He didn’t duck the controversial as far as I can see. Let’s give him the benefit of the doubt for a bit.

    • LachlanMEMBER

      I think this is right – they will want a full blown crisis to develop, tabloid front pages screaming, hang all that on the LNP and only THEN fix the problem.

        • drsmithyMEMBER

          LOL.

          Given anyone trying to be pro-active is inevitably pilloried as an evil commie, it’s hardly surprising most of them are reactive.

          • also lol, shitty oil-man cold war propaganda coming home to roost.
            it ends in Siberia.

      • It only becomes the punters problem if the retailers force customers onto new plans. Most customers sign up to agreed rates.

        • Do they? a quick look at the govt energy website suggest that majority of plans are all variable rates, with no lock in’s (as was desired last time around when the retails where gouging people on those).

          Happy to be proved otherwise…. cant be bothered with google 😉

  3. Have they decided that they want everyone to feel the pain first so they can take it away and make everyone like them? Are they worried that by improving the situation before households have the bill shock, they will have made no impression on the public?

    • It’s like doing housework in a sharehouse. If no one sees you doing it then you did nothing.

    • Yep, nobody is going to give you credit for fixing a problem they don’t yet face?

      1. Just keep smashing the LNP with your campaign talking points every time you get a question.
      2. Complain about the lack of windmills and your x point plan to build more (to be completed 5 years from now which is really 10 after time and cost overruns)
      3. Once bad enough, take the temperature of the room, which of your constituents will squeal the loudest if you undertake something slightly radical, your corporate donors and their union stooges or your freezing pensioners.

      Meanwhile, it seems highly likely a large chunk of the working population is going to get a very nasty gas and electricity bill shock over the next few quarters at least.

  4. Queue more woke signaling in 3, 2, 1 while watching over the economic destruction of the nation. Started with LNP, will finish with Lab.

    Greens and Teals wont help.

    • Yep that’s where I’m at. The politics of this is unwinnable so if we all agree to blame “market forces” then Australia can move forward with a dramatically reduced FF use and claim a big win for de-carbonizing the economy.
      This seems to be what the public wants, it’s hard to fathom, but the LNP has just seen what happens when a major party ignores a vocal section of the electorate. I doubt ALP will be so quick to make the same mistake
      what can one say RIP Aussie Manufacturing (we didn’t want it anyway)

      What’s really funny atm is that the Defense sector is finally waking up and realizing just how de-skilled the Aussie economy has become. They’re writing contracts requiring Australian component content when there are no known Australian sources for these components. Lots of relabeling fraud, it’s embarrassing when you know for-a-fact that a component is imported (often from Asia, probably China) but as far as the Defense sector is concerned the component comes with an “Made-in-Australia” stamp sloppily applied by some politically connected entities ….we desperately need a federal anti-corruption investigation.

  5. DodgydamoMEMBER

    I got the ReAmped warning yesterday… installing solar PV earlier this year is starting to feel like bcnich level foresight!! Also noticed one of the reporters raised gas reservation in Albo press conference yesterday although his reasonable response was along the lines of needing time to make informed decision (and I suppose getting those relevant people sworn in an then up to speed)

  6. SchillersMEMBER

    Absolutely no mention of the ADGSM in the mainstream media or the ABC this year. As far as they are concerned…it doesn’t exist.

    • That’s quite a byline…”China is currently getting Aussie gas at a cheaper rate than hard working everyday Australians. And the reason is ridiculous”
      could only be better like:
      China is currently getting Aussie gas at a cheaper rate than hard working everyday Australian Mum’s and Dad’s. And the internet is calling the reason insane.

    • BylinesMEMBER

      “Quiet Australians receive $ 1000 higher 3 month gas bill doubled and no longer quiet?”

  7. I got the same note, though interestingly it looks like any of the retailers with the ability offer decent fixed rates have shut their books overnight.

  8. Does anyone know if the NT went down the WA line or the East Coast line with their gas contracts?

  9. Added to which the BOM ses temperature in Melbourne is 11 but feels like 3. I assure you it does feel like 3 it feels like on snow slopes without sun. And this is inside, not with windchill. I suspect the global warmers aka climate change people of lying. They kicked the farmers weather forecaster, Kevin Long, seasonal and long range off ABC radio years ago because his facts on sea temperature, atmospheric tides etc and excellent farming predictions did not fit with global warming aka climate change.

    Every farmer keeps a rain gauge, high and low temp records daily and the books are kept for ever in the family.
    Local farmers until I left my farm in 2017 would just shake their heads because they knew when BOM changed low in Goulburn for example to neg 10.3 so it would not be a record.

  10. bolstroodMEMBER

    I think (hope) Albo will make the most politically out of this energy crisis , make sure everyone knows it is the result of Lib/Nat energy policy failure , and then act decisively to fix and lead us into the Clean Renewable Energy Revolution.
    That’s what I would do.

    • that’s a great plan, but doesnt seem to be the MO currently, much like AML legislation, makes 100% perfect logical sense.. yet 16 years of bipartisan support for a complete stonewall. ‘Fixing’ it requires bold action, not exactly bold policy wise (it’s not like domestic reservation is a new innovation) but in the sense that the corporate piggies and their supporters will squeal and thus you need to be able to get dirty and go toe to toe with them…. is Albo and his team the ones to do that… I hope so, but doubt it.

      no no, the tried and true path is to just talk up your opponents inaction while promising your own action and if you can do that long enough, you don’t actually need to deliver on the latter. In the mean time, convene a new emergency energy council, doesn’t really matter what you discuss or achieve, just talk up the gender and ethic diversity of its members, should buy plenty of time and friendly press.

  11. oil man sez NO!
    what planet you guys live on? a strange planet where politicians aren’t an oil man’s ass-puppet?

  12. I dont think this is a big deal for households YET.

    80% of east coast electricity consumers are with AGL, Origin or Energy Australia. All three have a substantial degree of vertical integration. Nearly all coal fired power plants have contracted supply prices. In VIC the power plants own the mine.

    For Labour they need the punters and the MSN squealing in order to fight the inevitable over reaction from the coal and gas sector.

    As many consumers and businesses pay their power bills quarterly this wont really be a big issue until end of Sep 2022 when consumers get their 1st quarterly bill after the 1 July 2022 increase in the AER’s Default Market Offer (the retail price cap).

  13. Dutton said he was for the forgotten Australians not capital. Here’s his chance to call for domestic gas reservation for exactly the forgotten outer suburbs.

    Albanese doesn’t have long. Prices through the roof plus constrained grocery supply/price increases will very soon be seen to be his problem especially if you’ve got Dutton on the side talking about gas reservation

    Albanese could quick sticks take some heat out of this and scare the sh5t out of the cartel by saying “we’re looking at reservation (or a large export tax per the greens’ suggestion on coal) but are getting advice on how to do this properly.

    He doesn’t have long though

    The stories of pensioners unable to cook food and eating baked beans are already on the news

  14. My guess is they already have people all over this. But because our politicians don’t make decisions these days for actually good reasons they are waiting to find out what the “group think sessions” are coming up with & what their spin doctors are conjuring up before they actually spin some erstwhile decision on the populace. Nothing will get done now while they can get away with “inaction on ….. by LNP”. (Mind you I would do the same ’cause LNP has been a disaster). But having said that good leadership doesn’t make decisions based on “group think sessions” nor on political advantage. They make good decisions based on facts & their opinion of what is best for the people (which is not the same as what is best for ALP/LNP).