Australian doom arrives in energy


For 13 years, this website has tracked the decline and fall of Australian policymaking. We have been astounded at how low politics and policy can go at every turn, but in actuality, this is a reflection of our age.

The nation is only occasionally blessed with periods of Presbyterian clarity. The natural state of Australian politics is corruption, from the Rum Corp of two centuries ago to the gas cartel of today.

It is the mateship culture, now given over to the ravages of Confucian and neo-liberal American avarice.

Nowhere is this clearer than in energy policy.


No nation on earth was better situated to decarbonise its energy grid. With spectacular renewable and fuel resources, it should have been a cakewalk.

All we had to do was enable renewables to build out while we used gas to displace coal while power storage developed.

What happened instead was that a pack of greedy corporations stole Australia’s East Coast gas reserves on behalf of China and no policymaker stopped it.

Today, that terrible act is morphing into a national catastrophe as local energy costs again explode to the highest prices on earth.


Gas is at $24.46Gj, 800% above historical average prices:

Electricity prices are raging as well and will go much higher if gas prices do not come down:


Is there a war disrupting supply? No. There is no similar price spike anywhere on Earth.

There is only the Rum Corp stealing all of the local gas and shipping it to China, such that any time a butterfly flaps its wings, energy prices explode at home.

The mechanisms of account are corrupt or plain dumb. This is from your national business daily:


Low wind power generation amid an east coast cold snap is threatening to create a gas shortfall, exposing the effect of years of restrictions on new supply and jeopardising the Coalition’s ambitions to transition to nuclear power.

The Australian Energy Market Operator says the threat of gas supplies running short extends from NSW to Victoria, South Australia, Tasmania and the ACT and could last until September. The intervention has sparked acrimony from producers and gas users, who say it is “very frustrating” that repeated supply warnings have been ignored.

The squeeze in gas on the east coast comes after years of struggle by producers in the south-east to develop new projects, hindered by Labor’s intervention on gas prices and tight restrictions on gas development in Victoria and NSW.

But it also comes as the Coalition points towards gas as the way to keep energy prices affordable and the lights on in the 13-year period before the first of seven nuclear reactors it has proposed comes online. On Thursday, shadow treasurer Angus Taylor said gas would be an “important” shorter term energy source.

A spokeswoman for Energy Minister Chris Bowen said AEMO’s warning showed the “system work[ing] exactly as it should”.

“Today’s notice is about a potential risk, not a risk that has eventuated. AEMO and the market are taking steps to ensure the risk is mitigated ahead of time,” she said, adding Labor had worked hard to secure more supply.

$24Gj gas is not a “potential risk”. It is an open disaster.

The LNP is no better. Its hollow nuclear gambit looks like little more than a smokescreen covering the ongoing gas gouge.

You are being fed lies. Labor has done next to nothing to secure supply. It has at its disposal:

  • The Australian Domestic Gas Reservation Mechanism (ADGSM) but won’t use it because Resources Minister Mad King is bought by the cartel.
  • A Code of Conduct with a $12Gj price cap that has become a laughing stock.
  • Any number of other policies that would end the crisis in a minute, including “use it or lose it” laws for gas production, export levies to crash the price and tax the sector properly, expropriation of assets for those unwilling to play ball, the parliament as a jawboning tool, a stiffened ACCC to break up the cartel,

I could go on and on. There is no will in Canberra to pursue any of it.

The issue is that the gas export cartel has bought both sides of the political spectrum, and neither is willing to oppose it on your behalf. Associated think tanks, like the Grattan Institute, are also bought. The media is a partisan reflection of both corrupt sides of parliament.


Australian doom is at hand. Unless the gas cartel is addressed head-on, then the energy transition will fail, international obligations will be perpetually missed, and Australia will become a standalone island of perma-inflation in which denizens are systematically impoverished by the combined might of China, blood-sucking corporations, and Parliament House.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.