Rogue gas major, Santos, the firm most responsible for Australia’s energy market failures, has a history of egregious lying to take advantage of the Australian people.
Who could ever forget this:
As Santos worked toward approving its company-transforming Gladstone LNG project at the start of this decade, managing director David Knox made the sensible statement that he would approve one LNG train, capable of exporting the equivalent of half the east coast’s gas demand, rather than two because the venture did not yet have enough gas for the second.
“You’ve got to be absolutely confident when you sanction trains that you’ve got the full gas supply to meet your contractual obligations that you’ve signed out with the buyers,” Mr Knox told investors in August 2010 when asked why the plan was to sanction just one train first up.
“In order to do it (approve the second train) we need to have absolute confidence ourselves that we’ve got all the molecules in order to fill that second train.”
But in the months ahead, things changed. In January, 2011, the Peter Coates-chaired Santos board approved a $US16 billion plan to go ahead with two LNG trains from the beginning….as a result of the decision and a series of other factors, GLNG last quarter had to buy more than half the gas it exported from other parties.
…In hindsight, assumptions that gave Santos confidence it could find the gas to support two LNG trains, and which were gradually revealed to investors as the project progressed, look more like leaps of faith.
…When GLNG was approved as a two-train project, Mr Knox assuredly answered questions about gas reserves.
“We have plenty of gas,” he told investors. “We have the reserves we require, which is why we’ve not been participating in acquisitions in Queensland of late — we have the reserves, we’re very confident of that.”
But even then, and unbeknown to investors, Santos was planning more domestic gas purchases, from a domestic market where it had wrongly expected prices to stay low. This was revealed in August 2012, after the GLNG budget rose by $US2.5bn to $US18.5bn because, Santos said, of extra drilling and compression requirements.
The public undertaking that STO had enough of its own gas to fill its second LNG train was the moment that Australian energy markets failed. From then on, the gas cartel locked in domestic shortages, ensured forever price gouging, put the Chinese industrial base ahead of the Australian, and derailed the decarbonistion plan.
Not bad for one toxic firm.
Today, this inglorious company is at it again, as usual, at the treasonous AFR:
One of the country’s biggest gas producers says Labor’s “Soviet-style” gas policy means companies will require the government to guarantee fiscal terms for new projects – including Narrabri in NSW – just as happens in countries such as Nigeria.
Amusing stuff. Every oil and gas producing country on earth has some form of reservation to cap domestic prices and Narrabri makes reasonable returns including the cost of capital so why would funding costs rise?
As for price controls being “Soviet”, sure they are, in the same way that cartels are anti-capitalist
Standard Oil Company, Inc., was an American oil production, transportation, refining, and marketing company that operated from 1870 to 1911. At its height, Standard Oil was the largest petroleum company in the world, and its success made its co-founder and chairman, John D. Rockefeller, one of the wealthiest Americans of all time and one of the richest people in modern history. Its history as one of the world’s first and largest multinational corporations ended in 1911, when the U.S. Supreme Court ruled that it was an illegal monopoly.
A lack of competition is just as destructive to markets as any regulation. Indeed, when the latter is forced by the former, regulation is the more liberal of the two.
A point that the treasonous AFR forgot when it embraced “businessomics”.
Any curtailment of investment at this juncture is deliberate economic vandalism and STO should be laughed out of court. The first step should be “use it or lose it laws”. The second, seizing the firm’s war profiteering export revenues. The third, straight out nationalisation.
Let’s have a good old cackle at shareholders expense if management wants to take up comedy.
Speaking of humour and the cartel, how about the lobby!
New modelling commissioned by the Australian Petroleum Production and Exploration Association reveals price caps could heap more pain on families and businesses, in addition to Coalition warnings of energy bill spikes in excess of $700 in 2023-24.
APPEA chief executive Samantha McCulloch, representing companies including Shell, Santos, Woodside, Beach and Cooper Energy, said the ACIL Allen modelling showed the intervention “could see wholesale gas prices up to 40 per cent higher than if the market had been left to do its job”.
“In the long-term, households could pay up to an extra $175 per year on gas bills while businesses cop a 40 per cent increase relative to a scenario with no price caps and in which planned investment is able to proceed,” said Ms McCulloch, writing in The Australian.
Bought and paid for “research” is classic partial analysis and next to useless other than for creating misleading headlines for the buyer. Ignore.
Let’s conclude with more STO humour:
“Every business owner in Australia should be alarmed at what the federal government has done. If it doesn’t like your business, your profits or the prices you charge for your products and services, it will regulate you. And it will regulate you if the unions don’t like your business.”
80% of Australians support price caps. AFR readers support intervention despite the paper’s gaslit propaganda
Nobody except the gas cartel is alarmed because everybody else is being gouged by it. In fact, they are all cheering electricity prices lower:
And, this time, Labor has some powerful allies:
Ai Group chief executive Innes Willox said the legislation was flawed but necessary to “soften the blow to Australia from events in Europe,” but warned that price caps were not a long-term fix and energy were set to face significant cost increases next year.
Andrew “Twiggy” Forrest, chief executive of Fortescue Metals Group, said the legislation was “critical to stop the pain on Australian families”.
Fool me once, cartel, shame on you. Fool me twice, cartel, shame on me.
