Woke-washed Evil Gas Cartel smiles as gouge resumes

The woke-washed Evil Gas Cartel (WEGC) is getting a dream run at the AFR:

The three big east coast LNG producers are nearing a deal to satisfy the domestic market, meaning the Labor government will not have to use a “last resort” trigger, says Samantha McCulloch, CEO of the Australian Petroleum Production and Exploration Association (APPEA).

Last month, Resources Minister Madeleine King warned gas producers that Labor would move to impose export controls unless the industry could agree on a heads of agreement to avert a forecast domestic shortfall in 2023.

…“The three east coast LNG providers are currently working very closely and very constructively with the federal government on the heads of agreement,” Ms McCulloch told The Australian Financial Review in an interview.

“We are confident there will be an agreement in place before the end of the month, which is the deadline set by the minister.”

First, we should thank the WEGC for the update. It is good of it to let us know where negotiations with Albo’s cowards are at. Our government hasn’t been so considerate.

That said, the update is very bad news for every Australian east of WA. The gas issue is not about volumes. It is about prices. It’s useless to reform the former without the latter.

Today’s gas price of $25Gj (as high as $27Gj in QLD today) represents a 350% rise from pre-Ukraine levels (traditional prices are $4Gj). It is untenable for all manufacturing and has already delivered a 200% shock to wholesale electricity prices. These two will add 2.5% to the CPI over the next year (at current prices, it has been much worse) and nearly double that over two years as the cost input shock is passed on by every business:

Why? Because international fuel prices are still astronomical at $72Gj and the WEGC will manage its total dominance of gas reserves to keep Australia short no matter what it promises on paper. This is its reason for being. Alan Kohler described this superbly:

So, having commissioned the damning ACCC report that described the shortage for next year, it appears Albo’s cowards are now allowing the WEGC to set and meet artificial parameters derived from one small part of it. There is no mention of the criminal monopolistic behaviour. No mention of the fact that WEGC costs haven’t risen one iota while prices are at the moon. No mention of rentier margins. No mention of the war-profiteering behind it. No mention that the shortage will keep getting worse for many years not just one.

Are we really going to have an energy system based upon a one-year commitment to meet a structural fuel shortfall with no certainty on price? To find ourselves right back at the same spot every time a butterfly flaps its wings anywhere? This is Albo’s notion of energy security?

Apparently, yes. The Woke-washed Evil Gas Cartel has decreed it and Albo’s cowards have neither the wit nor the courage to defy it.