Labor wraps finger around gas reservation trigger

In the wake of the ACCC’s explosive report, Resources Minister Madeleine King has told gas producers that export controls will be in place by the start of 2023:

In response, Minister King has announced that she is preparing to issue a notice of intent to make a determination to invoke the Australian Domestic Gas Security Mechanism (ADGSM).

Following consultations, the Minister also announced the Government will extend the ADGSM until 2030, with a review due in 2025. The ADGSM is currently due to expire in January 2023.

Because the previous government failed to extend the mechanism beyond its current sunset clause, the so-called trigger cannot be pulled until the regulations are updated. This urgent work is underway.

“Once the mechanism is available, I will take the first step in activating it,” Minister King said.

“The Albanese Government will ensure Australian householders and businesses continue to have access to reliable energy supplies and we will take whatever steps are needed to avoid a repeat of the crisis we faced in early June.

“Based on the forecast shortfall, the Government needs to see firm commitments out of the east coast LNG exporters.

“I will continue to work with gas and LNG producers, as well as state and territory governments to encourage new supply, and to find industry-led solutions to secure Australia’s ongoing energy needs.

“The government is also talking with key trading partners to reassure them that Australia remains a trusted trading partner and a stable and reliable exporter of resources and energy.”

While this is a good start, the Albanese Government must not pussy foot around. Put a $7Gj price trigger in a renewed ADGSM, similar to what’s in place in WA.

Anything less will be a fail.

Unconventional Economist
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Comments

  1. Let’s see. A good start but the gas sector will start squealing soon and Labour need mum’s and dads to get behind this.

    The message is not cutting through yet. More slogan engineering is required.

    • Quantitative FleecingMEMBER

      The phrase “Gas Cartel” gets your comments blacklisted on The Australian news site. The censors in the media won’t allow it to be discussed.

      • I'll have anotherMEMBER

        Yeah, that’s why I was pleased to see DLS drop the phrase 3 times in his sky news interview. “Free speech champions” when it suits them only.

        Maybe now that ALP are in power and Angus Taylor, Scomo and co are no longer answerable to the uncompetitive laws they allowed, they will allow conversation.

        It is a bloody cartel btw.

    • PalimpsestMEMBER

      I fear that you are correct – the message isn’t cutting through. It’s the price of Gas. Let’s not underestimate what the Gas industry response will be. Well funded. Full of important phrases like Sovereign Risk, ruining Australia’s reputation as a reliable supplier. This will turn into Billions of dollars of revenue lost because Australia can’t be trusted for new exploration. That will include thousands, probably hundreds of thousands of ‘lost’ jobs. There will be a parade of economists explaining why interfering in the markets is next to criminal.
      Mind you there will be a short term boom in Marketing budgets, Ute sales and Hi-Vis jackets for the actors and politicians of a particular flavour. Big business ‘think tanks’ will have so much funding there will need to be major growth to handle the excess cash. Top end property and vehicles in Canberra should do well, as the lobbyists take their cut. There is so much money at stake here, that anyone expecting this to be “over by Christmas” reminds me of people with the same sentiment at the start of WWI. This is big money. Real money.

      I wouldn’t expect any action until businesses and the public really understand their new power bills and scream about it. Right now they’re just unsettled. Yes, the Government should act now – but if they do, they’ll be the villain, believe it or not. They need the public to feel the pain first.

      • No more exploration ? Fkn grouse we don’t need
        More. It’s not like they’re going to up stumps and leave the existing fields just sit there capped are they? Nnnope they’re still printing money at $7/GJ so who gives a flying flick of the fast donut what these parasites say

        Fk em

        Jan 2023 is oodles Of time for plenty of folks’ contracts to reset higher = bill shock

        Dim Chalmers will ( never Dim Jim) have all the cover he needs if the cartel doesn’t play nice – plenty of warning for them ACCC and a baseball bat-wielding electoraye

  2. Oh Totes where art thouMEMBER

    I [King] will continue to work with gas and LNG producers, as well as state and territory governments to encourage new supply, and to find industry-led solutions to secure Australia’s ongoing energy needs

    I’m starting to get the vibe that the gas companies will promise to reserve a percentage of new projects. They will use it as leverage to say “we’ll reserve, but only if you let us start more projects”. The government will give in under the guise of not breaking export contracts and the issue will go away. This is of course at odds with decarbonisation goals, and the gas cartel will simply sell us their expensive gas and still hoover the cheap stuff for export.

    Labor not only need to force domestic gas reservation but it needs to be of existing gas fields.

  3. So basically waiting for LNG providers to confirm what profit level they are happy with and over what time frame. Then you can load that into the ADGSM water pistol and squirt away?

    • Ronin8317MEMBER

      To be fair, they need to legislate it first, and it has to pass through the Senate with all the Green + 1 independent support. The amount of money the gas cartel will spend to lobby against it will be massive. Whether the Green will vote for it is another matter : they may decide ‘Australian shouldn’t be using gas anyway’.

      • Charles MartinMEMBER

        True, the Greens ideology sees gas as just another bad fossil fuel, not as its intended purpose as an interim means to transition, so Bandt will just bleat whatever it is he bleats about.

      • I expect the Greens to torpedo gas reservation unless the government stops new gas projects or spends $3B on renewable energy or bans coal exports or something. They want fossil fuels to be expensive.

        • Does the balance of power in the senate allow Labour to pass legislation with the remaining cross bench?

          Blocking this would be pretty stupid by the greens. It’s the wrong point of leverage to use.

          • Ronin8317MEMBER

            Unless the Opposition votes for it, nothing can be passed without the Green. ALP has 26, Green has 12, Crossbench is 6. Passing the Senate needs 39, so it needs ALP + Green + 1.

    • There’s the view that preventing a crisis gains no political capital. Recall the Y2K uproar. Everybody thinks it was a big nothing burger because the crisis was averted at great effort. The people who did all that work, including me, get a big “meh” in return because nothing bad happened.

      No, in order to be popular you need a crisis to be happening so you can be seen to resolve it and reap the acclaim. The normies are only just waking up to the gas crisis as the winter gas bills come in. My gas price increased 25% over the last 6 months. Without my wood heater, my April-July has bill would’ve been around $1500. Once everybody starts feeling that pain and bleating in response the ALP can heroically do something (ie as little as possible) and reap the political rewards.

    • Got to wait for the public and MSN “gas sector is bad” narrative to catch up.

      The gas sector is the biggest most well funded political party in the country. Bar none.

      • ‘Got to wait for the public and MSN “gas sector is bad” narrative to catch up.’
        That’s the problem, cartel uses PR, slogans and outright lies, govt relies on talking heads (sorry DLS) and technical jargon that never sounds the same twice. The guy on abc this morning put me back to sleep, and I’m interested in this !!
        Have a look at the qld resource council ads rebutting the new coal royalties calling it a tax that will cost jobs everywhere in qld, no mention of $400 t coal , arseho!es.
        Govt needs better PR, and not written by some beaurocrat in a back office.
        Lastly pull the fully loaded reservation trigger at $7 and you have the mining industry by the balls for a generation , fudge it and die again …….

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