Honestly, how many ministers does it take to fix a light bulb? I don’t know but it is more than five.
For the past year, we have had Mad King, Chicken Chalmers, Dingo Bowen, Useless Husic and Albo himself all working on a gas cartel fix.
Yet the fabulous five have been unable to produce anything useful to make Australian gas supply reliable and cheap:
Less than 7 per cent of gas sold on the east coast may be subject to the Albanese government’s price caps, meaning the much-vaunted policy may do little to rein in prices for consumers despite having already done irreversible damage to investment confidence.
The calculation from Credit Suisse analysts comes ahead of the release expected as early as Thursday of the text of Labor’s mandatory Code of Conduct on gas, which will include the rules on exemptions to the wholesale price cap of $12 a gigajoule.
…It said only a portion of the total may actually come from Queensland LNG producers under the price cap, so may not influence pricing.
Rough estimates point to perhaps only half of the 260PJ being covered by the gas cap. When annualised over the period to 2027, that represents about 30PJ a year, compared to annual east coast domestic demand of about 450PJ.
This is insane. Manufacturing will continue to be hollowed out, lifting the China dependence. Other nations that have effective domestic reservations for gas, such as the US, are enjoying reshoring booms in manufacturing:
Albo has also managed to piss off our major ally versus China:
Australia is no longer seen as a trusted supplier of LNG and Japan will seek new sources for gas in Alaska and other parts of the world, one of Japan’s top energy advisers has warned as Tokyo ramps up criticism of Labor’s new climate policy.
Japan’s Institute of Energy Economics chief executive Tatsuya Terazawa said Australia was no longer a candidate to make up any shortfall from reduced LNG supply from Russia, in a damning assessment of the Albanese government’s policy which will force gas operators to cut emissions or pay for carbon offsets.
The only preparations we are making for conflict with China is to feed its military with cheap gas while we hollow out our own.
Just as bad, the gas price caps do not even cover the spot market. Contracts are important for manufacturers but it is spot gas that sets the original cost of electricity for you and I. Albo’s fantastic five never even put that in the agreement:
The price cap will apply to gas sold by producers without an exemption (see below). The price cap will not apply to transactions in the Declared Wholesale Gas Market (DWGM) in Victoria, the short-term trading markets (STTMs) in Brisbane, Sydney, and Adelaide, or to anonymous trades or pre-matched trades on gas exchanges of three days or less on the Gas Supply Hub (GSH). These markets exist to balance gas supply and demand requirements on a day-to-day basis and thus play a different role to the wholesale gas contract market (which accounts for around 90 per cent of all gas supplied in the east coast gas market).
The entire gas fix is more fake policy from Albo’s cowards and rolling energy shocks are inevitable.