Forelegs staddling the national thigh. Hindquarters jiggling furiously on the shin. A picture of canine concentration.
That’s Dingo Bowen as he rogers the nation with a new gas “deal”:
In short:
- more supply to be made available through 2028 by the QLD cartel (but they said there was no more!)
- $12Gj price cap to remain,
- “reasonable price” price provision cut, and
- no price caps at all for new supply committed to the local market.
In short, we will have a fixed gas price of $12Gj interminably. This is 300-400%% above historical prices. As things stand, it will be cheaper to import gas from the US where you can buy it for $3.50Gj.
$12Gj is double breakeven prices for most untapped resources on the east coast. It is anywhere from 300-1000% above cash breakevens for cartel gas. The economic rents are enormous.
One cannot have a “reasonable price” provision given these are unreasonable prices.
$12Gj gas is also likely to be higher than Asian and European gas prices for long periods over the forecast period as the global gas glut returns. Yet the price cap will also work as a floor given the cartel’s control.
Moreover, why would any consumer of gas underwrite the new supply that is available above the price caps? Why would producers dig it up without at least some contractual commitments?
For that matter, what is a new gas commitment? The QLD cartel is constantly opening new acreage to pump coal-seam gas. This looks like a loophole through the price cap.
Finally, it all hangs on enforcement and Albo’s cowards – Dingo Bowen, Mad King, Useless Husic and Chicken Chalmers – don’t have a backbone between them. Hilariously, throughout their “hours and hours” of consultation with the industry, the cartel was busy selling gas above $20Gj:
The cartel only crashed the price a few days ago so that the agreement could be produced in the media without reference to Swiss-cheesed price caps.
And here we are, day one of the announcement, and gas is selling above the cap at $13Gj.
These bullying tactics make plain that the Code is not worth the paper it is written on.
