This is fascinating:
Australia’s “quiet quitting” of its LNG export juggernaut is making the world less safe, both on climate and for the Western-based geopolitical order, said the head of Inpex Corp, whose $60 billion plus investment in Darwin’s Ichthys projects makes it Japan’s single biggest global foreign investment play.
In a scathing speech to a private function in parliament that left many of the politicians and industry figures who attended stunned, Takayuki Ueda lambasted what he described as Australia’s deteriorating investment climate as well as Labor’s failure to back carbon capture and storage technology.
He also warned the country is already lagging “far behind” offshore rivals in meeting its “clean energy super-power ambitions”.
…Urging Labor to avoid triggering “at all costs” the Australian Domestic Gas Security Mechanism, which enables the government to divert export market gas to the domestic market”.
“The question of who will replace Australian supply into the market is front and centre. Alarmingly, the ‘inconvenient truth’ is most likely that Russia, China and Iran fill the void.
All sovereign nations have the right to determine their energy settings. If Japan isn’t happy about us restructuring the east coast gas cartel then too bad. If the boot were on the other foot then it would do EXACTLY the same thing.
How do we know? Because Ueda just told us. The east coast gas cartel is run for and by China. Why is it not OK for Japan to suffer Chinese energy influences but it is for Australia?
Where I do agree with Ueda is on the ADGSM. If we pull that lever then gas contracts with Japan should be protected over those with China, which resells piles of the gas anyway. Japan is an ally and deserves preferential treatment.
As for CCS, yes, that is a remarkable failure by Australia. It might have had a chance under a carbon price but, oh well…
On future gas developments, if Australia spurs Japan to pursue a more aggressive decarbonisation program then that’s all to the good. We’ve got plenty of uranium! Hint, hint…
The overreach clear in this speech is characteristic of the east coast gas cartel since 2014. It has now resulted in a much stronger ADGSM and there may be more sensible policy revenge coming:
A tax rise on the soaring profits of gas producers looms as soon as the May federal budget, as the energy industry braces for the Albanese government to raise billions of extra dollars from the petroleum resource rent tax.
Treasury’s technical review of the 40 per cent PRRT has “morphed into a much bigger” and “more material” overhaul, according to industry sources familiar with the government’s confidential tax consultation.
The plan to raise more revenue from record oil and gas profits comes as the government hunts for money to pay for $3 billion of joint Commonwealth-state assistance for household energy bills and other spending pressures from disability, defence, aged care, health and interest payments.
My only advice is to go very hard. It is rare that a pack of corporate gangsters so comprehensively tears up their own license to operate.
The public will furiously cheer every federal response and Dutton’s dills will be wedged to hell and back.
Probably. There is a new problem emerging in power costs:
The same can be seen in futures:
This has coincided with a pop in global coal and LNG futures globally for the northern winter:
Australia’s fuel price caps run out at the same time. They will need to be renewed. Now is a good time.
Add decarbonisation as more coal plants leave the system and we have the set up for another round of power gaming by the cartels.
