As shown in the next chart, East Coast gas users are paying some of the highest prices in the world, while Western Australians – which has a domestic reservation policy – are paying the lowest:
Moreover, because gas is the key marginal price setter for electricity, Western Australians also enjoy the cheapest electricity in the OECD, whereas users on the East Coast (under the NEM) are stuck paying high electricity prices:
WA electricity prices are also much lower than in the National Electricity Market on the east coast, averaging $64 a megawatt-hour, while NEM prices were more than four times higher at an unprecedented $284/MWh. The NEM average was more than triple the average of the June quarter last year, even including several weeks when wholesale electricity and gas prices were capped by the Australian Energy Market Operator…
“With energy prices at eye-watering levels around the world, we believe that Western Australia now has the lowest gas prices in the OECD,” EnergyQuest said.
“Western Australia is a low-energy price paradise”…
Previous criticisms of the policies – including that it could deter investment in new gas supply and push up electricity prices by prioritising supply security over efficiency – do not appear to have been borne out by experience in Western Australia, a market that is transitioning to low-carbon power.
China, which receives over 70% of East Coast gas exports, typically pays less than Australian users of that same gas on the East Coast (see chart above). And the market is so broken that China is sending East Coast gas to Europe, while Australian users are starved of supply:
China’s largest energy firms are sending liquefied natural to European nations as an energy crisis sweeps the continent, according to a Bloomberg report.
Traders told Bloomberg that major shippers including Sinopec and PetroChina Co have sold shipments of liquefied natural gas to to struggling European nations throughout the year…
China, the world’s biggest buyer of the key fuel, has seen demand slump amid strict COVID-19 policies in 2022.
Sinopec has a stake in APLNG in QLD so the likelihood is that east coast Aussie gas is being arbitraged to gouge Europe.
In short, Australia is not regulating the gas cartel in part for fear of upsetting China and derailing Albo’s “reset”. But China does not even need the gas and is reselling it to our allies in Europe at enormous markups.
The criminal gas cartel has no ethics, limits, or loyalty to anything other than its god of monopolist greed.
Crush it with a $7Gj ADGSM price trigger or export levy benchmarked to the same.
Or let it destroy Australia.