Sometimes you have to wonder where our political machines manage to dig up such a plodding cavalcade of idiots. It’s as if they recruit using reverse IQ tests, only the dumbest and least worthy of public service need to apply!
Today’s example is QLD Premier Annastacia Palaszczuk who has put in the way of an east coast energy resolution the single worst argument I can remember. It is, of course, gleefully reproduced by the campaign for national ignorance known as the Australian Financial Review:
Labor risks picking a fight with the gas industry with a plan to cap prices at between $11 and $13 a gigajoule for commercial and industrial customers in a move that could threaten additional supply and open up a battle between Queensland and southern states.
Annastacia Palaszczuk put federal Labor on notice that she will oppose any attempt to force a similar price cap on coal used by state-owned energy companies, declaring “hands off our generators”.
Ms Palaszczuk said “there is no way that Queensland is going to sacrifice the returns that we are able to provide back to Queenslanders” as she demanded compensation for the state if the move went ahead.
…“Queensland is always doing the heavy lifting when it comes to gas,” she told state parliament during question time.
“If the issue is supply, NSW and Queensland can open up some of their gas fields.
“I am making Queensland’s position very clear to the federal government and the NSW and Victorian premiers: our energy assets are working well in Queensland, we have the plan and we will not jeopardise the returns that are going back to Queensland households.”
Queensland has recently raised its royalty payments and is using the money to subsidise Queenslanders’ bills, which Ms Palaszczuk said amounted to $575 per household over the last four years.
Keep energy prices high so that the returns can be used to lower the cost of energy? Err…
Crushed QLDers have had the highest wholesale power prices in the land this year and Palaszczuk’s subsidies have no chance of keeping pace. That’s before we mention the inflationary spillovers into everything and the higher interest rates that are annihilating QLD property prices as a direct result.
| NSW | QLD | SA | TAS | VIC |
| 215.0145 | 227.0104 | 199.6289 | 171.9661 | 168.5256 |
Instead of aiming to blackmail the Commonwealth to no good end, just get out of the way and make QLDers richer.
While we’re on the subject of dills, there is the Minerals Council:
The Minerals Council, whose membership includes coal miners BHP, Glencore and Whitehaven, has said it will wage a multimillion-dollar advertising blitz against price caps on coal, akin to the resource sector’s $22 million campaign in 2010 that was credited with killing off the Rudd government’s proposed resources rent tax.
However, the Albanese government has been told by the federal Treasury that the unprecedented move of capping both coal and gas prices is a warranted measure to drive down electricity bills.
…the Australian Energy Regulator, which oversees the east coast electricity market and is a statutory adviser to the federal government, has stated rising international demand and prices for Australian coal, which this year hit record highs above $US400 a tonne, can also have a significant impact on wholesale electricity prices.
Hoocoodanode?
Then there are the gas troglodytes. The horrible AFR again:
The Australian Financial Review can reveal that Brickworks agreed to pay Santos between $11 and $12 a gigajoule, a far cry from the levels some have accused big gas producers of demanding.
Nothing is being “revealed” here. It is a commercial-in-confidence agreement that is being leaked by the cartel to make it appear like it is behaving nicely. The ACCC has already done the research showing such pricing is the exception, not the norm. Not to mention that $12Gj is still 400% higher than historical prices.
To represent this as some kind of scoop and economic victory is beyond low. It’s psychopathic scale gaslighting.
Finally, we come to the marvelous Graeme Bethune, whose love of the gas cartel is true, mad, and deep:
An analysis from energy consultancy EnergyQuest this month said that imposing a $10 a gigajoule price cap would remove or delay about 700 petajoules of gas production, which is equivalent to a year’s supply in the entire east-coast domestic supply, in less than eight years.
EnergyQuest chief executive Graeme Bethune said a $10 price cap would probably rule out the development of the Narrabri gas field planned by Santos in northern NSW, a project which King has said would be needed to stop the state from running out of gas.
“It is understandable that people and businesses are concerned about the spike in energy prices, but it is obviously important to give careful consideration to the long-term effects of different assistance alternatives,” Bethune said.
Bethune said Queensland is projected to be self-sufficient in gas supply until at least 2032, even with its three LNG export terminals at Gladstone.
Santos declared long ago that Narrabri is profitable at $7Gj. It was going ahead long before the Ukraine War. Why would it not go ahead now at $10Gj? If it doesn’t then Australians are being gamed and the assets should be stripped and handed to somebody else using “use it or lose it laws”. Even better, develop Narrabri in a public gas corporation to reassure the community of environmental integrity and force more price competition against the cartel.
Sadly, the rampant lies are having an effect. Suddenly the mooted gas cap price has shifted upwards from $10Gj to $12Gj despite the ACCC already declaring the breakeven price is $5Gj and cartelier Origin telling shareholders recently it’s breakeven at $3.50Gj (while offering it to manufacturers at $35Gj).
Clearly, $12Gj is unnecessarily generous to the cartel. Narrabri would, for instance, be operating at a ludicrous 70% markup.
Frighteningly for all concerned, electricity futures are not pricing much, if any, impact from the discussion:
Futures markets either don’t believe price caps are coming, or don’t believe that they will work. Wrong on both counts.
If not, then CPI will jump by an extra 4% and the RBA will crash the economy to deliver the demand destruction needed to lower prices.
Who do these energy wreckers think they are?
