The rape of every business and household east of WA by the gas cartel eases today. As the heat comes on the cartel from multiple sources, it is gaming Australia in the short term with lower prices. Especially so since there is still no news of the resumption of exports on the Curtis Island sixth LNG train. The gas price is back to $12Gj and electricity prices have tumbled, though are still double pre-Ukraine prices. This is enough to add 30% to utility bills over the next year:
International prices were whacked overnight as well but remain at super-spike levels, as European gas storage is advancing ahead of seasonal averages.
The ACCC is back in the fray. But why is it soft-pedaling on Australia’s criminal gas cartel?
Ms Cass-Gottlieb, who took up her post in late March, said she had been heavily involved in the drafting of the latest edition of the ACCC’s series of regular reports into the east coast gas market, which forecast a shortfall of 56 petajoules in 2023, equivalent to about 10 per cent of next year’s forecast demand for 571 petajoules.
While gas producers accused the ACCC of demonising the industry and insisted there was no shortage of gas, Ms Cass-Gottlieb said the projection was based on data supplied by gas producers themselves, and reminded the producers that 99 per cent of uncontracted gas was exported to international markets last year.
Speaking as part of an M&A conference run by law firms Allens, Herbert Smith Freehills and King & Wood Mallesons, Ms Cass-Gottlieb said she was hopeful that the ACCC’s latest report could spark a similar response to its first report into the east coast gas market in 2017. That report forecast a major shortfall and sparked a flurry of deals that resulted in the supply gap being filled before the start of 2018.
So what’s left of industry (and business plus consumers) must wait for the ACCC to issue a press release to get energy deals done?
What is this? Manage the mafia policy? Prosecute the bastards. Set a precedent that their monopolist behavior is illegal and send some carteliers to prison if they do it.
Meanwhile, Europe is moving to change its energy markets to break the link between gas and power:
The European Union is preparing to step into its energy market, intervening in the short term to dampen soaring power costs and eventually seeking to break the link between gas and electricity prices, according to Commission President Ursula von der Leyen.
“We have to develop an instrument which makes sure that the gas price no longer dominates the electricity price,” von der Leyen, who heads the EU’s executive body, said Monday evening during an appearance in Berlin with Germany Economy Minister Robert Habeck. “We’re seeing now with these exorbitantly high gas prices that we must decouple.”
She also said the bloc must take urgent steps to address the skyrocketing prices, which are driven by nervousness in the market and speculation. “We will have to develop an instrument, that will happen in the next days and weeks, which ensures that the gas price will no longer dominate the electricity price,” she said.
The plan to cap the gas price for power production is just shifting chairs on Titanic. Governments will have to pay instead of consumers and that will ultimately be reclaimed via higher taxes. Unless it comes with super-profit taxes for the oil and gas sector, which it might.
What is so perverse about this is Australia has the same system and problem yet has done nothing about it.
The solution for us is easy. We can cap the gas price and nobody but the war-profiteering criminal cartel will suffer.
We have the gas to do it and it only costs $5Gj to produce:
Time for a $7Gj price cap in the ADGSM, or to apply an export levy at the same price.
