Amazing stuff from the AFR, the gas cartel tabloid:
After months of secretive negotiations – during which the nation’s top gas executives were forced by Chris Bowen’s energy department to sign “unprecedented” non-disclosure agreements – Labor has detailed its plan to effectively commandeer the east coast gas market.
…While Labor maintains it has not dropped plans to force producers into signing a legally binding “reasonable pricing” code of conduct, the details suggest it now realises it went too far.
Reality has forced the government’s hand.
Since the intervention began, the industry has slipped into an investment freeze, spooked by open-ended and ill-defined regulatory controls and conditions that have upended sensitive risk-reward calculations on new capacity, exploration and hiring decisions.
So, not only will there now be completely nonsensible carve-outs for chosen gas producers to sell above the $12Gj cap, there will be no “reasonable price provision” afterward.
And all of this back down because the cartel has refused to sell Australia its own gas. That is, measures designed to force the sale of our own gas to ourselves at “reasonable” prices have been steamrolled by the cartel refusing to sell it at all.
Let’s not beat about the bush. This is an act of war by a foreign-owned (including sovereign) cartel, that services China above all others.
Nations invade one another for their resources. Australia can’t even invade itself to get access to its own gas.
The proportionate response to this living and breathing failed market-turned-extortion racket is to go further and harder on regulation. All the way to nationalisation is justifiable.
Instead, we are watering down at pace, leaving us with Swiss-cheesed price caps that are clearly not competitively neutral, and the ADSM as the only mechanism for ongoing volume intervention, which itself hangs on the gumption of a weak-kneed government to be implemented.
This dog’s breakfast is going to be bullied and gamed to the point of uselessness.
No wonder Treasurer Jim “Chicken” Chalmers is reduced to mumbling Orwellian drivel:
Treasurer Jim Chalmers says the Albanese government’s decision to weaken its $12 per gigajoule price cap for gas producers supplying the east coast market by allowing some to charge more would halve future wholesale energy prices.
Expect more power price shocks ahead.
