This just keeps getting better and better:
Major Japanese LNG buyer Tokyo Gas has made a shock move to sell out of four Australian LNG projects to a US private equity firm in what is the first significant sign of a Japanese firm exiting gas ventures here driven at least partly by the need to cut emissions.
The $US2.15 billion ($3.37 billion) deal involves newly formed EIG subsidiary MidOcean Energy taking over Tokyo Gas’ small stakes in Chevron’s huge Gorgon LNG venture, Woodside Energy’s Pluto LNG, Inpex Corporation’s Ichthys venture in Darwin and Shell’s Queensland Curtis LNG.
To understand how the Australian people have once again been gamed out of their own energy endowment, recall the following from a few weeks ago:
While sources in Tokyo and Korea said they did not believe potential restrictions would jeopardise the long-term LNG contracts their countries depend on, there have been quiet discussions with Canberra to seek assurances there would be no disruptions.
“The Japanese government has been asking the Australian government to implement any measure in such a way that it does not impact Japan’s supply of LNG from Australia, and the Japanese government will continue doing so,” a Japanese government official told The Australian Financial Review.
How does handing gas assets from a Japanese national champion to rapacious US private equity increase Japanese energy security? It doesn’t.
We’ve been gamed again. Tokyo Gas is a card-carrying member of the east coast gas cartel and has just pumped and dumped its Aussie assets using “sovereign risk” as its cover.
This is while your future bills are still at nosebleed levels. The local gas price is hovering around $20Gj and the electricity prices are hugging $150MWh, triple pre-Ukraine War prices:
Your gas and power bills are going to double so Tokyo Gas can make out like a bandit.
Meanwhile, the dark leviathan that is Albo’s gas undeal has breached!
The gas producers must work to deliver cheaper energy to consumers or they will face further action, Resources Minister Madeleine King says.
“They have to prove themselves to the Australian people but also to those manufacturers that they can make affordable gas available to them and if they fail to do that the government always has other levers and it should always use them if manufacturers find this you know grossly unaffordable or unsustainable,” King says on Sky News.
King says, however, that gas prices may not become as cheap as they were as the supply of relatively low-cost gas from the Bass Strait has diminished and coal seam gas is more expensive to produce.
King says she supports the long-stalled Narrabri gas project in NSW.
“Well, I hope Narrabri goes ahead. It would be a good project that would be very helpful for the gas supply in NSW and also Victoria, but it’s a matter of further proponents and the government of that state.”
As the ACCC pointed out, the breakeven cost for cartel gas is $5Gj:
Evil cartelier, Santos, has previously stated that Narrabri gas can be delivered profitably for $7Gj as well.
Why are Albo’s cowards only “hoping” the project gets up? Force it up with “use it or lose it” laws. And, while you’re at it, re-apply the NSW Chief Scientist’s many conditions for safe extraction that the cartel nobbled in the NSW Parliament.
Even better, nationalise Narrabri and undertake the project with a national gas champion to benchmark cartel prices on the east coast using a cost-plus regulatory model. We can’t trust Santos to do anything right after its catastrophic QLD blundering, about which it is lying again:
The head of one of Australia’s largest liquefied natural gas producers says demands to shut down the fossil fuel industry are only adding to Europe’s energy crisis and delaying efforts to reach net-zero emissions by mid-century.
Kevin Gallagher, the chief executive officer of Santos, said the issue now gripping Britain, where the nation potentially faces energy rationing and three-hour rolling blackouts this winter, was a direct result of underinvestment by governments in the industry.
…“The supply constraints we’re seeing were already being felt prior to the Russian invasion,” Gallagher told an Australian business community event in London. “While the war in Ukraine has inflamed the issue, the structural and policy issues were there long before the war began.”
Poppycock. Prior to the Ukraine War there was a global gas glut, produced in part by the Evil Gas Cartel, of which Santos is the founding member. Moreover, the higher the gas price is now, the quicker net zero will arrive. It’s a question of cost.
Which is where we arrive at the most bizarro-world display I can recall. The Australian Financial Review is today assembling the energy robber barons at a convention to carve up the net-zero transition with the blessing of Albo’s cowards:
The Australian Energy Market Operator chief will call for a “mature conversation” among governments, industry and customers to thrash out a workable version of the controversial “capacity mechanism” to spur investment in firm generation needed to keep the lights on amid an accelerating energy transition.
Industry bosses are worried that the market is running out of time to build the replacement capacity, but AEMO’s Daniel Westerman will tell The Australian Financial Review Energy & Climate Summit in Sydney on Monday that energy ministers and officials are “leaning in to this strongly”.
What follows in the story is the most egregious scab grab for policy and energy territory in the history of Australia. All of it is entirely wasteful and unnecessary versus domestically reserved gas at $7Gj which was always planned to be the transitional fuel as we built out firming renewables.
That is before it was stolen by Evil Gas Cartel. Instead, we are now embarked on an unimaginably expensive and risky experiment in transforming the foundation stone of our modernity so that the oligarchs can stuff themselves with a final slice of Armageddon.
Albo’s gas whale is a bloated, wheezing windbag crushing all sense and national interest.
