Here’s a gas “quick fix”: nationalise Santos

By now, most of you, like me, are sick of the new Labor government claiming that there is no “quick fix” for the collapse of east coast energy markets.

This must be some kind of record for a new government, alienating every single Australian inside a week of taking power.

To give you some idea of how far behind the curve Labor is, get a load of this codswallop.

Yesterday, a leading east coast gas cartelier, Santos, denied all responsibility for shortages:

“All I’ve got available right now over and above what I’m producing today is 15 wells in the Cooper Basin we’re looking to connect as quickly as we can, which will bring very little gas into the market, and it really replaces natural decline in our current producing wells,” Mr Gallagher said in Melbourne.

“All we can do is drill as fast as we can in the Cooper, right?….What we really need is new fields coming on like the Narrabri gas project.”

Yet, as Mr Gallagher says one thing, he is doing another:

On Wednesday, the Australian Energy Market Operator activated for the first time its Gas Supply Guarantee mechanism to ensure there was adequate gas for electricity generation in Victoria, South Australia and Tasmania.

Under the voluntary mechanism, Queensland’s three LNG exporters divert gas south for power generation. The three ventures involving domestic producers Origin Energy and Santos, as well as global majors such as Shell, redirected gas that was earmarked for overseas into the domestic market.

So, the cartel has no gas. Except for the enormous reservoir reserved for export, which it is now sending south as a ground swell of anger threatens to overwhelm its social license to operate.

This unconscionable behaviour is not new. Way back when Santos first commissioned its LNG export trains for Curtis Island, the then CEO said and did the following:

As Santos worked toward approving its company-transforming Gladstone LNG project at the start of this decade, managing ­director David Knox made the sensible statement that he would approve one LNG train, capable of exporting the equivalent of half the east coast’s gas demand, rather than two because the venture did not yet have enough gas for the second.

“You’ve got to be absolutely confident when you sanction trains that you’ve got the full gas supply to meet your contractual obligations that you’ve signed out with the buyers,” Mr Knox told ­investors in August 2010 when asked why the plan was to sanction just one train first up.

“In order to do it (approve the second train) we need to have ­absolute confidence ourselves that we’ve got all the molecules in order to fill that second train.”

But in the months ahead, things changed. In January, 2011, the Peter Coates-chaired Santos board approved a $US16 billion plan to go ahead with two LNG trains from the beginning….as a result of the decision and a series of other factors, GLNG last quarter had to buy more than half the gas it exported from other parties.

In short, Santos miscalculated its own gas reserves and over-invested in LNG capacity. When it found itself short, it vacuumed up all of the third-party gas that was supposed to supply Australia and exported that as well.

Of all guilty parties in today’s gas crisis, and there are many, Santos is the most responsible. Do you detect a hint of that in its CEO today? Is the firm contrite and making amends?

No, and the long-term pattern of destructive and monopolistic behaviour goes to the conclusion that Santos is a dangerously rogue firm deserving sanction.

So, here’s the “quick fix” solution that Albo’s cowards are looking for. The Australian Government should nationalise Santos.

The rebadged firm, Gas Australia, can then operate as a public corporation with a remit to supply Australia with gas at a reasonable rate of return at the price of $7Gj. This will then benchmark the entire cartel for local prices.

GLNG partners can keep exporting without the 30% Santos share. It will need to declare force majeur on some contracts.

Nationalising Santos will have other benefits too. It will reassure the public that the forthcoming Narrabri gas project won’t poison the entire Great Artesian Basin after Santos also managed to duck the sixteen environmental restrictions recommended by the NSW chief scientist for the project.

It will prevent the firm from pursuing ludicrous “blue hydrogen”. A filthy form of new “clean fuel” that is busy ruining Australia’s climate credentials all over again.

And it will scare the bejesus out of the remaining carteliers plus the coal sector which is where the next fight is going to be over war-profiteering.

The following would also stop:

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.

Australia could just seize Santos’ 30% share of the GLNG export plant and shut those volumes down.

Or, we could part-nationalise or part-acquire Santos. Expropriate a 20% stake and take board seats to match. Sack management and parachute in some national interest folks instead.

Or, we could just take the whole damn thing.

This may seem a draconian step to some. But that’s only because we’ve all been boiled frogs through a near-decade of steadily increasing gas cartel abuse. In the harsh, cold light of day, this is a national security crisis. A gas cartel is war profiteering by over-shipping gas to China, our major strategic rival. All households and businesses are being pilfered. The banking system is at risk from the resulting inflation and asset price crash. The cartel pays next-to-no tax. The sovereign is being gutted.

Finally, the gas shortage will only get worse from here as the Bass Strait runs dry into the mid-2020s. We need a structural solution or this is going to happen again and again and again.

So, here’s the “quick fix” and long-term cure that Albo’s cowards are looking for.

Nationalise Santos. All problems solved!

Houses and Holes
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Comments

  1. Yes. The covid response has proven that government can do whatever it likes to private property. It can close one business and allow the one next door to continue.

    • BINGO, perfectly fine to smash millions of small businesses during covid ‘for the good of the nation’ but god forbid you touch the P&L of a few gas companies.

    • elasticMEMBER

      Will Cannon-Brookes have any spare change after buying AGL?
      The move might be popular enough that he’ll be our first presidente

      • He’s only popular amongst the green worshipers. Turning off peoples lights > Sri Lanka.

    • Exactly. I am right there with Houses and Holes. I would ram a bill thru parliament and do the most brutal thing to ensure our aus sovereignty of our own gas. And indeed any products or services which were flogged overseas to our, the public’s, detriment.( Actually that means housing and the second tranche of the money laundering bill, fixing the visa rort uni course for low quality students..)

      It might be brutal but so is the the hit on Australians. Well applied fast brutal is good. The public sentiment would support this action right now.
      The private sector wave from 1983 started with the breaking up of companies, flogging assets and pocketing profits and long expensive tax payer funded lunches, devil take the out of job workers and all else as the banks got bigger, babies into daycare as it cost 2 wages for the mortgage.
      This private wave of bastardry has peaked and will be done by 2030 or so so time to move now grab our raw materials which would of necessity happen as the govt wave came.
      Just need a good govt, more professional and caring for Aus and us. We can’t afford crook amateurs.
      Then all we need is to control the Scomo types who flog anything to profit themselves and cronies….”like the attempt on the Post Office. Surprised they didn’t sell our blood bank to USA as it was wanted by them.

    • Strange economicsMEMBER

      Who’d a thought $ 1 million in donations to the LNP and the LNP Lite would get policy support,
      and no new laws against them.
      Its a coincidence. What a generous company.
      Not a lot of donations to the Greens….

  2. “”Public ownership is democratic control”” – Tony Benn, UK Minister for Energy 1975 to 1979

    • pfh007.comMEMBER

      Thanks Claw!

      Yes and to quote from that article from 5 years ago.

      “..With LNG the issue is even simpler – work out how much gas we want available for domestic purposes. Subtract that from a conservative estimate of production capacity – i.e. one that does not require every bit of farmland to be screwed with fracking – and the remainder can be the national export volume for which licenses will be available for purchase via public auction.

      No sovereign risk involved at all.

      A wonderful free market solution! What better selling point can there be for our ideologically obsessed political classes in Canberra.

      If someone tries to suggest that setting a national export volume and auctioning off rights to it is beyond the competence of the national government they are barking mad.

      Sovereign risk is just a cloud of bull dust spun by international companies who fear the ‘natives’ are on to their scams…”

    • I imagine some MBers have so much spare time that they construct an index of comments like this they can one day bust out 5 years later

  3. Lovely little propaganda piece in the Australian yesterday, I’m pretty sure the journo didn’t even both to comment, just quoted old mate Santos verbatim….. oh, and locked the comments section 😉

    • I'll have anotherMEMBER

      Lol. Locked down comments. Such “free speech” from those W*nk#rs at the Australian

  4. I wonder what it will take for the left to stop fixating on the 0.1% of the population that suffers gender dysphoria in favour of the 90+% that suffers under this corporatocracy?

  5. The Grey RiderMEMBER

    If Santos and the other two Qld LNG players lied about their CSM gas reserves to support their LNG plants then they should be held accountable for that….simply limit the gas that can be exported to only those CSM production licenses that were the basis for the original project approvals. If that means they can’t operate the LNG trains profitably then so be it. This will force consolidation of the Curtis Island assets which should have been the approach all along. 6 LNG trains on Curtis Island was always a ridiculous proposition.

  6. TheLambKingMEMBER

    Nice in theory. But no Government would ever get away with nationalising anything without getting smashed until the next election by the IPA/LNP/Murdoch/9 cartel about a socialist/communist party and how it will ruin Australia.

    • Depends if you are clever enough to sell the concept and rule the narrative and there is zero chance the ALP can do that or would even want to

      • Oh Totes where art thouMEMBER

        Yep, and there in lies the problem. The ALP need to just get in front of the cameras and sell their message. No equivocating, no surrender.

    • drsmithyMEMBER

      Not that I think there’s a chance it would ever happen, but if it were,, the time to do it would be when there’s ~3 years for the benefits to flow through before the next election…

  7. Simple solution to the Gas/energy crisis.
    Switch off the heating in parliament house and lock them all inside till they fix the problem.

  8. The frame of debate is changing.

    Madeline King has stated EC Domestic Reservation on the table.
    Marles has said all options are on the table.
    All discussions should exclude Santos’ Gallagher.
    New gas should be off the table.
    Everyone can see the stupidity of exporting 85% of our gas yet these idiots say we don’t have enough.

  9. Great article. This shocking situation we find ourselves in is a testament to what happens when a country relinquishes its sovereignty to a corporate cleptocracy. I think they also refer to it as a banana “republic”.

    • Nationalisation just shifts the upper bound of the Overton Window.

      We have nationalisation and less red tape/more supply at the other.

      We may end up with domestic EC reservation, entered into “voluntarily” by the cartel. Wonder what the quid pro quo will be. Maybe less red tape…Greens might have a bit to say about that.

    • The Grey RiderMEMBER

      Not if project approvals were based on fraudulent submissions by the proponents.

      • Sure, if you want to litigate that for years on the taxpayer dime.
        Threaten blunt force trauma – 100% export tax etc etc per MBs post the other day – to encourage a cheap, voluntarily agreement. 20% of all extracted gas to the domestic market at whatever uplifted-from-cost rate is deemed reasonable ($7GJ?) plus they have to start paying tax on it. kthxbye

        • The Grey RiderMEMBER

          I don’t care how they do it. Taxing the Cartel is fine with me. Just don’t use my tax dollars to provide subsidies while the Cartel continue to make out like bandits.

    • De-extinctify Warney and bring back the Holden 5L V8.

      ps or vice versa – Nationalise the Solomons and bomb SANTOS.

    • “Whatever it takes” has been uttered in different halls of power before……
      I think our last dear leader used it all the time to shirk whatever he could.

      • Yes, true, different intents and beneficiaries though. I know DLS is just emphasising urgency by provocation.

        • I’m happy he’s winding up the wick & holding their feet to the fire. The recency of the changing of tie colours gives the best window to jar these fatheads before they settle into a dogmatic, top down driven stupor. This country needs strong Momentum on many fronts – non aligned with Neogliberal corporatist trickle down garbage…..

  10. The Grey RiderMEMBER

    Only a matter of time until stories start being reported about Oldies dying in the southern states because they can’t afford to heat their homes….

    Will domestic food production be next given the dire global forecasts?…already happening (again) with baby formula.

    • Oh Totes where art thouMEMBER

      Herald Sun this morning already starting on the oldies dying in the cold narrative.

  11. What are the GAS Cartel & other Extraction Companies doing such that they pay no tax? Is there an analysis somewhere of exactly how they are not paying tax? Surely the ATO would be all over them if it they weren’t complying with Commonwealth Legislation?

    • SadCitizenMEMBER

      Thats easy, the wonders of creative accounting

      Some combination of sub companies will save the day. Santos AU owes a “debt” to Santos caymen islands. See the debt could be any of the magical accounting things they can use, license to use santos name in AU ? lease equipment owned by overseas sub company? thats the magic of creative accounting just need to use your imagination and tada no tax

      It is also equally amazing how every year no matter the actual revenue/profit before accounting magic they will still pay zero tax. Those magic debts or whatever strategy they use will equal the amounts each time. Amazing coincidence

    • What are the GAS Cartel & other Extraction Companies doing such that they pay no tax?

      Creative accounting. All the standard stuff that is well known.. loans to foreign related entities. Depreciation credits.

      Is there an analysis somewhere of exactly how they are not paying tax?
      Michael West the journalist has written about it and Pauline the politician has whinged about it for years.

      Surely the ATO would be all over them if it they weren’t complying with Commonwealth Legislation?
      That is a naive faith you hold. All it takes is a few powerful elites to tell the ordinary workers where to put their efforts and where to NOT put much effort in. Remember how those thugs were sent to arrest the harmless boy who challenged John Barilaro? Why weren’t they putting their effort into arresting real threats to society? Answer: Influence of powerful elites.

      • So if the “licence fee” goes to whatever low tax regime how do they get the money back into Australia to pay Fully or Partly Franked Dividends?

    • bolstroodMEMBER

      When this gas confidence trick started the State governments colluded with the Gas companies so that exploration and development were heavily discounted and the Gas companies given such generous tax breaks that some of them will never pay tax.On top of that the legislation in NSW ( The Onshore )Petroleum Act 1991 )allowed gas companies to over ride the rights of land holders to the extent that Landholders could not deny access to their properties to the Gas companies , could not stop infrastrcture being built on their properties , or stop drilling 24/ 7 all for no compensation. It is called land theft. This Legislation was brought in by a NSW Labor Government , remember Eddie Obeid, and Ian MacDonald ?
      THe previous Labor Energy shadow minister, Mark Butler’s partner holds a senior position in Santos .
      The tentacles of the fossil fuel industry are massively entwined into our political system.

      • Bit like corruption really isn’t it?
        I’m glad we are a free society with solid rule of law!

      • Thanks for the precis Bolstrood. Maybe the ICAC needs still longer teeth…… ones that recognize where policies aren’t made in the National Interest. The Senates job if they weren’t owned…..?

    • The ATO is all over them. The issue is that the $80b construction costs of the export facilities will take some time to recoup. In addition, the PRRT doesn’t apply to gas (thanks Matthias Cormann) so there’s nothing to see there.

      The industry not paying tax is precisely how it was envisaged by the LNP.

      • Yes I get the PRRT issue but I’m just trying to work out how come SANTOS has paid fully franked dividends for some years & 70% franked this year. So when did they pay the tax for that?
        I know the message on MB is all the cartel pays no tax but I just want to know for sure that we are totally correct in making statements that they pay no tax. And I want to know how that can be, especially as SANTOS has paid fully franked dividends for a long time!

        • SANTOS is likely in a different position because they are a long standing producer with mature operations (we know they’ve been raping Timor-Leste for at least 20 years). Also, because they are an Australian entity who likes to pay franking credits, they have little incentive to avoid paying income tax. The fact that they only franked to 70% last year might suggest that their bank of franking credits from those mature operations are now gone.

          It is the Chevrons and Exxons who are the problem.

  12. DingwallMEMBER

    We don’t do quick fixes……….. we only do quick f^ckups or slow, drawn out, death by a thousand cut fixes

  13. cZ0mzqFILC8zoVHqMEMBER

    That would be the perfect pretext for a major maritime power to teach revolting natives a lesson in the righteousness of open markets, free trade and Wuhan steel. I know we all would be saddened to see Chinese gunboats steaming upon Lake Burley Griffin.

  14. The Grey RiderMEMBER

    Thank goodness WA has their domestic gas reservation mechanism to provide the light necessary to shine on the east coast disaster. There is nowhere for the Govt or the Cartel to hide and obfuscate…the punters will demand action.

    • It’s funny…. the solution to fix prior, poor government decisions… is more government decisions…..

      It’d be cheaper to implement, and pose less challenging ethical and political issues.,……

      For the federal government to build a pipe, linking WA gas supplies to the east coast…..

      BOOM !!

      A market solution… WA gas supplier now have a new export market… where the spot price is the highest in the world… where their production price is amongst the lowest in the world…

      I don’t know about you people, but I foresee a very re-adjustment of the clearance price…. and the WA quarantine reservation doesn’t impact them. The east coast is competing on price terms for WA’s overseas customers..

      A pipe people…. a pipe…. there isn’t a need for inertia, unless there is a political will for inertia.

      And it’s fixed… so no enduring political oversight, no royal commissions sucking up billions over the better part of a decade, no fully funded bureaucracies….

      A pipe….

      • RomulusMEMBER

        Pipe will take years and cost many billions of dollars. Cheaper and quicker solution is shipping the gas domestically from WA to the East Coast into import terminals. There is a win/win deal to be had here to:
        – Reserve enough gas for WA
        – New WA producers supply a chunk of WA gas into EC bringing the price down to acceptable levels (this can only work once the ADGSM/reservation is triggered for ALL gas producers)
        – New WA producers can export the rest to the global market (which they can’t at present)

        • Pipe will take years and cost many billions of dollars. Cheaper and quicker solution is shipping the gas domestically from WA to the East Coast into import terminals. There is a win/win deal to be had here to:

          I had a number of my clients impacted by the huge ass BHP train derailment outside of Port Hedland in Nov 2018. Even though it was only a siding that was ultimately ruined….. after the incident at 5:45am….. BHP had flow guys into from Queensland and NZ, on the ground by 9pm that night.

          It was fixed real quick. They elected for competency, instead of diversity quotas…. luckily the mining industry is known for hiring on competency grounds…

          a) it’s a pipe, it is not rocket science. It can be built real quick
          b) it’s a fixed costs, and once complete, the cost of servicing the finance (the marginal cost) is cheaper than the cost of shipping (marginal cost)

          – Reserve enough gas for WA
          – New WA producers supply a chunk of WA gas into EC bringing the price down to acceptable levels (this can only work once the ADGSM/reservation is triggered for ALL gas producers)
          – New WA producers can export the rest to the global market (which they can’t at present)

          And not a government department or enforced quota hires anywhere to be seen.

          i.e The best solution,.

          • RomulusMEMBER

            https://www.abc.net.au/news/2020-05-29/trans-australia-pipeline-boom-or-bust/12283964#:~:text=The%20Federal%20Government's%20proposal%20to,of%20a%20post%2DCOVID%20funk.

            They say $5B in the article from a few years ago- double that cost. The LNG export infrastructure is there in WA – actually under used. All you need is the East Coast terminals for a few 100M.

            Nothing to do with diversity – just need have the balls to make decisions instead of living in fear of the energy company ads against the govt which may come when they pull the trigger.

          • Maybe fixing a few kilometers of wrecked railway is a different proposition to laying thousands of kilometers of greenfield pipeline and the associated compression stations?

            How is the best solution not the politicians in the east not ripping the bandaid off like their colleagues in the west did and reserving a proportion of gas for domestic use? The pipelines already exist, they just need more of the gas that is currently exported to be diverted to domestic use.

            The other thing with the pipeline from the west idea, is that WA has presumably reserved enough gas for their own domestic use, not the entire country. Taking gas from the WA grid will increase the cost for west australians while only providing a marginal relief for those in the east. If they tried charging for the gas sent east, someone will try and get that money straight back through the GST distribution. Why would WA agree to such a pipeline?

          • Maybe fixing a few kilometers of wrecked railway is a different proposition to laying thousands of kilometers of greenfield pipeline and the associated compression stations?

            Yes… on scale…. it was 2.4km of siding, repaired in a matter of days.

            The proposition is an easier engineering task, of a much greater scale. So you employ the scale….. once…

            It is a fixed asset, with much reduced ongoing costs… the cost of shipping is much more than the cost of interest on the debt.

            How is the best solution not the politicians in the east not ripping the bandaid off like their colleagues in the west did and reserving a proportion of gas for domestic use?

            Because a band aid can be reapplied with a tranche of bribes… or donations, or green stupidity … in say…2031…

            That’s the problem with politics, it can get better… or it can get worse…..

            When you have a market solution, you don’t need a political solution.

            The pipelines already exist, they just need more of the gas that is currently exported to be diverted to domestic use.

            For a market solution, you need competitors….

            I understand your fantasy view… “it works in WA, so with the same decision matrix, it can work in the rest of the country”….

            My we’re dealing with politics here…. the point of the pipe is to take it out of the hands of politics.

            The other thing with the pipeline from the west idea, is that WA has presumably reserved enough gas for their own domestic use, not the entire country.

            Correct.

            Taking gas from the WA grid will increase the cost for west australians while only providing a marginal relief for those in the east.

            It’s not taking gas from WA, their quarantine will remain. It’s taking gas from India, Japan, China, etc…. at the open, free market price… it’s competing from the unreserved gas supply.

            If they tried charging for the gas sent east, someone will try and get that money straight back through the GST distribution. Why would WA agree to such a pipeline?

            Because at the market price, which is offering an extraordinary return on cost of goods sold…. this involves a transaction between buyer and vendor…. the buyer pays the GST, and the vendor remits it to treasury…

            whether that buyer is Japan, India or NSW… is immaterial to the outcome you are hypothesising.

          • Oi Keep WA out of this mess!! we’ll have nothing to do with the mess in the Eastern states.

            Our contribution is the show, clear as day, how reservation policy is best practice and nurtures a thriving state economy.

            Anyone who thinks a East/West pipeline will be built any time soon as a solution needs to go back to school, to be blunt

          • plus, anyone who thinks a pipeline will be build any time soon as a solution needs to go back to school, to be blunt

            Do go on…..

          • “It was fixed real quick. They elected for competency, instead of diversity quotas…. luckily the mining industry is known for hiring on competency grounds…”

            You must be really screaming out for the vasoline. I wonder if women had been in charge whether the derailment would have happened in the first place.

            According to you, women just cannot be as competent as men in any field, except housework and child rearing.

            I think your issue is that for your whole sexually active adult life your partners have laughed when you’ve said “this is 6”.

          • I think your issue is that for your whole sexually active adult life your partners have laughed when you’ve said “this is 6”.

            You think about other men’s d!cks a lot do you?

          • I think your issue is that for your whole sexually active adult life your partners have laughed when you’ve said “this is 6”.
            LOL.

            He thinks a really long pipe would solve the problem.

          • Only yours, rusty, only yours!

            I doubt you’ve ever had to put up with pen!s envy from your partners, and that I think is your issue with women, they cruelled you at a young age and that has remained with you.

          • Of course!! Avoiding diversity quotas fixed thing and by extension is the cause of problems now! That and non cisnormsomethingsomethinf

    • First COVID, and now this. To be honest if we were run like WA we would have:
      – Surpluses everywhere
      – Higher wages
      – Less tax
      – Less COVID/Flu/etc etc
      – Cheaper energy hence more manufacturing, etc

      I know WA has its problems, but overall I feel the governance is better there than on the east coast. Maybe that self reliance has forced you guys to think smarter.

      I’ve been seriously considering as of late looking into what it takes to move there, what areas are good, etc.

  15. Tassie TomMEMBER

    Santos? Isn’t that the South Australia & Northern Territory Oil Search company?

    It was a state owned company. Until some turkey privatised it.

    • UpperWestside

      Privatization (selling out the people) of anything that is a strategic or monopolistic asset is treason.

  16. So, it turns out VotesBeDope was right all along: Labor shouldn’t have been allowed to govern ever again, indeed!

    • Display NameMEMBER

      You think LNP would be better? They would be looking to funnel even more money to the cartel. Remember the fictional Covid “gas led” recovery. Purely an excuse to funnel opportunity and cash to donors.

      They are both utterly captured along with the MSM. The cartel does not have a leg to stand on ethically or morally. Zero social license to operate and deserve to get a little of the rough end the consumer and industry has had to deal with for the last decade. [email protected] Them

      This would not even be a discussion in the US. They have periodically banned exports of energy depending on availability. They have a few politicians that act in the countries best interests. We could do with a few here.

      • Display NameMEMBER

        Bedsides the gas industry
        – employs stuff all people now the build out is complete
        – pays zero to very little tax
        – resource rents the country receives are a small fraction of what Qatar does for the same volume of exported gas
        – taking into account negative externalities such as methane leakage, climate damage and domestic price gouging

        and the industry may well be a net negative for the county. We should get getting some benefit from OUR gas.

      • “You think LNP would be better?
        Dear God, no! We’ve made a huge progress by turfing those pigs out of the office.
        Labor is an accidental beneficiary of it, unfortunately with a parliamentary majority.
        The ideal outcome would have been ALP minority gov, held accountable by the independents/Greens.

  17. Jumping jack flash

    Nationalisation of all natural resources is what most countries do, and then leasing extraction rights. Relying on taxation has failed, and can never work to recoup national income.

    As we near the cusp of a deep global (western) depression caused by raising interest rates in response to absolutely necessary inflation to keep the debt all our economies are built on growing – after we hit the lower interest rate bound, it is more important than ever to have a secure source of national income to mitigate and cushion us through this time.

    We are a country that is blessed with abundant resources but only a small pocket of the country and economy actually benefits from this. Everyone else uses debt spending, or gouging the prices of essential items and services (paid for with said debt).

  18. UpperWestside

    Cant we get the unions to do a bit of creative mayhem and stall any outbound ships.
    If you cant fill a ship its pretty much the same as a gas reservation scheme

    • Straya says nothing can be done in the national interest

      How can you have a national interest, if you no longer have a nation.

      • Fart Mechanic

        ..this.. decades of LNP distracting people while slowly turning AU into “AU PTY LTD”.

        The purpose of company is to make a profit above all.
        The purpose of a government is to serve in the peoples best interest.

        Really touching the core of the problem here.

        The purpose of a nation is contradicting the PTY LTD conversion, like
        a gender change gone wrong half-way…

        National Schizophrenia … I think this where we are now..

  19. Labor has been in govt for 11 days.

    11.

    The LNP had around 3170.

    Three THOUSAND one hundred and seventy.

    Still wiping the egg off their face after being deeply embarrassed by the efforts of Labor and Penny Wong in the Pacific, MB has now tried to flip the script by focusing on energy. And blaming…you guessed it…Labor. And the LNP fans here lap it up.

    MB writes-

    Most of you, like me, are sick of the new Labor government claiming that there is no “quick fix” for the collapse of east coast energy markets.

    This must be some kind of record for a new government, alienating every single Australian inside a week of taking power.

    Really? Comments like these are laughable. People, if you want pure fantasy, go read the Chronicles of Narnia.
    This is utter drivel.

    • DingwallMEMBER

      Don’t forget Labor have basically been appalling in Opposition for around 3170 days. So it was painful having a sh!t Government and a sh!t opposition. They need to change the way they are perceived and actually pull their finger out and deliver something……….. Governments haven’t delivered anything meaningful for decades.

      And as for their efforts in the Pacific ….. they caught a flight out and said some words.. far more than Scummo and his cronies did… have they delivered an actual outcome …. no …. but I hope they deliver some wins soon.

    • The LNP might have left a dumpster fire for Labor, but Labor are the government now have an extinguisher in their hands in the form of the ADGSM which they gave bipartisan support to in 2017. Just pull the pin and squeeze the trigger. Why would any government delay doing the needful if they know what’s coming?

    • “Most of you, like me, are sick of the new Labor government claiming that there is no “quick fix” for the collapse of east coast energy markets.”

      Yes, and embarrassed no doubt when it became public how long it takes for the gas reservation clause to kick in; 6 mths.

      • As HnH said yesterday, the 6 months lead time is only a “Heads of agreement.” In reality, the government could tell the gas cartel to start reservation next week and they would have to do it.

    • RomulusMEMBER

      The reality is that if the economy tanks the voter are going to blame the government in charge regardless of whatever external issues there are (see Biden).
      That is why its in Lab’s best interest to go hard to show that they are doing everything they can to reduce gas prices as early as possible. The longer they take to act and get prices down the more economic damage this is going to cause. When businesses go bust, unemployment goes up and people are worse off most are not going to think about how long Lab was in power they are just going to think that they were better off under the Libs.
      Get ready for another 10+ years of the LNP are better economic managers mantra which people will completely believe. That is the reality of the situation – this coming from someone who put the LNP last.

      • Labor only found out it had won a majority govt two days ago.

        2 days ago.

        Albanese and Wong were on a flight to meet the leaders of The United States, Japan and India three hours after they were sworn in. They have acted with great haste in our region of the world to shore up friendships and alliances and help stabilise, for now, the dire situation in the Pacific that the previous LNP govt created. Where is the balance in reporting that? Not here on MB which criticised the govt on its second day in power.

        Now, I’m sorry if people here are worried that their investment properties are gonna go underwater but the bigger priority was the security situation.

        So let’s get real. Throwing around comments like “sick of the new Labor govt” and “alienating every single person in Australia within a week” is hyperbolic and shows an attention span worthy of audiences who dine nightly on The Farmer Wants a Bride, and MasterChef.

        And anyone who can’t see that is not playing with the full deck.

        • Evidently, it matters little to the rest of us when the ALP got in the office or won majority. Most of us are NOT tribal.
          Similarly, if we’ve been fed shyte by the LNP for a decade and suddenly someone else takes over but will still feed us the same shyte,
          do you believe there’s a reason to celebrate? Well, you may be in a party mood, but for most of it’s BAU.

        • RomulusMEMBER

          Let me put it this way – at least with Labor there is a chance they do the right thing. With the LNP there would have been no chance.
          The problem is the more they wait the more damage it is going to cause and it will be long term. So yeah 2 days or 11 days is not going to matter much to the public in a couple of years if they associate Labor with high gas prices, higher rates and the inevitable bust that comes along with it.
          Its not fair but that is the reality.

  20. Fishing72MEMBER

    Yeah, Good luck with that.

    Like a Central American nation trying to nationalise United Fruit back in the day!

    I completely agree with what you’re saying but I think we must remember that Australia is allowed to exist as a pleasant vassal state provided we remain subservient to the needs of our masters.

    I’m not talking about China either.

  21. OR, Labor could retrospectively apply Domgas Reservation policy to all East coast LNG ventures, at a rate of 15% like in WA.

    West Australia is a textbook case of what ought to be in place across the whole of Australia. If i still lived in NSW, I would have pitch forks out at parliament house until ALbo and Jim put this measure in place. The treason has to end

  22. There is enough blame to share around here and it is not just the disastrous policies pursued by Morrison and Taylor over the past decade which lit this dumpster fire. In 2012, the Labor Gov had an opportunity to impose a domestic quarantine for the East Coast gas market just as the Curtis Island export facility was coming on stream. Despite the recommendations of the expert Task Force including major gas users and large manufacturers, the Gillard Gov decided not to. https://web.archive.org/web/20170318083429/http://www.platts.com/latest-news/natural-gas/sydney/australian-federal-government-rules-out-domestic-7986077

    It made more than 40 recommendations aimed at strengthening local companies as they adapt to global economic change.

    “The government is supportive in principle of most of the report’s recommendations,” Gillard said in a statement. “However, the government does not support recommendations in the report to further investigate a sovereign wealth fund and a domestic reservation policy for gas.”

    The Minister for Resources at the time was one Martin Ferguson, who later left the ALP. Take from that what you will.

  23. Fed Government has two options:

    – Pay $5-$10 billion in subsidies per annum – which will end up being windfall profits going back to shareholders. Effectively transferring gas subsidies to the top end of town. No future ownership or dividend.

    – Buy Santos for $30 billion based on current market cap. Shareholders get their money paid out, but windfall profits go to the government. Government saves $5-$10 billion in subsidies each year – plus profits from dividends – transaction pays itself off in under five years.

    It’s really a no brainer isn’t it?

    • Fishing72MEMBER

      Whoa there!

      Don’t go down that path or next thing you’ll be applying the same common sense to every resource project in Australia with their endless profits going to foreign multinationals whilst Australia sticks to building roads at the same price only with zero return

    • Governments own hospitals, and they leak an ever increasing amount of money. So what may be a profitable enterprise now… as it’s mandate is as a private enterprise…. this profitability is not always assured. It gets easy to spend more money when there is no accountability to produce a surplus.

      There comes a time when you have to say “no”…. in fact it’s quite liberating.

      Government’s don’t tend to be good at it though.

      • Perhaps the hospitals can export their beds so they can make more $$$ on the ones they keep and spend less. /sarc

        • Don’t be ridiculous. No one’s going to export the hospital beds.
          They simply need to AUCTION them (because “market knows best”).

          • UpperWestside

            No they need to move them off balance sheet into a bed funding vehicle
            then securitize and tranche them up, then issue NFT’s that are a picture of each bed
            clearly the beds near the window trade at a premium
            the beds near the door a discount
            And as its and NFT its priceless

            Some of you might have noticed that this scheme is a double dip ( secutitization and NFT on the same bed)
            so the Govt gets paid for every new bed , regardless of how needed it is.
            I have visions of poly tunnels the far side of Dubbo, with miles and miles of useless empty beds!

  24. BradleyMEMBER

    Just heard Barnaby state that the ADGSM be used to increase supply to reduce price!! Labor should have been ready for this.

  25. After years of tweeting into the void on this topic, turns out everyone knows about it. very odd.

  26. Hyperbolic indeed, I can’t see how an incoming consultative government can simply fix it without talking to stakeholders. Sure you can make captains calls, but how would you know how to call it? you have endless opinions to listen too. A consultation with the gas companies goes like this:
    Albo’s lieutenant to the CEO’s
    I can see four possible outcomes going forward:
    1. You are seen as Titans of industry working towards the common good for the Australian People
    2. You are demonstrated to be incompetent fools
    3. You are demonstrated to be lying incompetent fools
    4. You are arrested for criminal behavior

    Which outcome would you like to work with us to pursue?

  27. Easily fixed and fucked. Build more import terminals at all export terminal on East Coast. RBA invests in import side ala SNB. Gas bought long term at lowest current export price via Cayman style operation. Ship goes beyond territorial limit, cargo sold at sea, does a u-turn and imports Gas at a QUARTER domestic pricing. Cheaper gas for all, jobs for the lads and higher GDP for the pollies.

  28. SharmanMEMBER

    It’s fine to say nationalise and gas reservation but what about the consequences of that in regards too Sovereign risk? It would have a devestating impact in scaring away private investment into the resources sector which in turn would ultimately devestate our economy. What say you David?

    • Sovereign risk doesn’t exist in this case. The cartel know they are taking the piss.

    • RomulusMEMBER

      When the US/WA have reservation policies and the US can reinstate export bans on their gas by presidential executive order the market is quite used to the possibility. Sovereign risk for who? China? They should do it – have a quiet word with LNG exporters saying that any force majeure contracts should be applied to China to minimize impact on Japan and Korea.
      In a Sellers market the buyers will just have to take it.

  29. JoeJackMEMBER

    I see the federal government are now talking about getting gas from WA for the eastern states.
    Apparently, while it is possible for WA to have a gas reservation for their own people, the eastern states cannot do this and instead, want to be included in the WA deal. Unbelievable.

    • RomulusMEMBER

      Excellent – WA will still have their 15% reservation to keep prices low. A portion should go to EC to alleviate the problem there at sensible rates (as well as imposing the ADGSM for EC producers) and a part of the new production for exporters can be sold into the international markets at a massive margin (which the new producers can’t do right now). If they do this it will be a win/win/win for all parties.

      • SharmanMEMBER

        You can’t build a gas pipeline overnight, but I think it should be done for the longer term. And if it does happen a gas reservation mechanism must be included in this scenario.

        • RomulusMEMBER

          No but you can build a gas import terminal quick smart i.e what is going through the approvals process in Port Kembla and Geelong. The export infrastructure is there in WA and underutilized. Much cheaper and quicker option than a pipeline.

  30. What can I say, there are a million solutions and a billion reasons why we won’t find a solution.
    nothing new nothing to see here, just business as usual, socialize the losses and privatize the profits.

  31. lol, it flows faster than water and more unnoticed,
    they are stealing trillions.
    we don’t even get the gold dust.