A national interest policy process is one in which a well-informed government determines its policy settings via a specialist area of the bureaucracy.
Next, the draft policy is released, and parliamentarians make well-understood arguments to the public via an intelligent media with its own specialists.
Having fortified the polity with knowledge, the government might then take some industry comment on why the policy might be nudged around.
But the wailing of vested interests is largely ignored because everybody can see through it.
This policy process died with the Rudd government and was cremated by the Abbott government. Though it had really been dying the death of a thousand cuts since Paul Keating destroyed John Hewson in the GST election.
Today, we have an older policy process that governs. One in which money is all that matters.
Vested interests control the debate via a stupid and corrupt media, which outsources expertise to vested interest-funded think tanks, the little naked emperors of corruption.
Equally so, the government follows with some abortion of policy malformation designed mostly to silence as many critics as possible.
The national interest is a quaint notion valued only at the lunatic fringe. Households are irrelevent.
And so, we come to today’s gas debate, which is an outstanding example of this bastardised process of governance (though immigration is certainly worse).
We should begin with gratitude for small mercies.
The current debate at least has two sides, which we have not seen for a decade or more, as the gas export cartel ran roughshod over industry (and households, who matter the least).
BlueScope Steel has finally given some backbone to the manufacturing side of the debate.
Today, we have the latest response from the gas lobby, an outfit so shameless that it would take an ice cream from a baby and then eat the child as well.
Self-serving calls from some large manufacturers for more government intervention and price controls in the gas market are not the answer. As the ACCC confirmed, past gas market interventions have done more harm than good, and “there are limits to what the gas policy measures can achieve on their own if the underlying causes of inadequate supply and ineffective competition are not addressed.”
What is needed is a considered package of reforms that address barriers to new supply, support continued investment in new gas supply and infrastructure, and provide long-term certainty to all market participants.
The simple truth is that the only sustainable way to put downward pressure on prices and ensure a well-supplied gas market is to increase supply.
Key among these is fixing environmental approvals that are delaying projects, increasing costs and driving away investment. The Federal Government’s commitment to overhaul the national environmental laws to deliver faster and simpler approvals is a welcome first step.
The states must also do their part, especially Victoria and NSW – those most at risk of gas shortfalls and which have done the least to support new gas development. Santos’ Narrabri gas project, for example, which could supply half of NSW’s annual gas demand, remains mired in regulatory approvals and legal challenges after more than a decade.
The “simple truth” is that the QLD exporters lied when they built their big export fridges. They all claimed to have enough internal gas reserves to meet export contracts. They did not, and the most guilty, Santos, has been sucking out third-party gas for China ever since. It is going to get much worse.
This is the basic truth. Narrabri is not big enough to fix it. Nobody knows how much landlocked Victorian gas there is, but public studies have not been encouraging. The main gas reserves left now are in QLD and NT.
Moreover, almost no amount of new supply can fix the broken market because the gas cartel owns the rights to the reserves, and its export capacity is much greater than it is currently using. New supply will meet even higher exports. As southern reserves run dry.
This is the critical point. Via what measures the Australian government has taken over the years, it has bullied the gas export cartel enough that it has been unable to run export volumes at full tilt.
So the cartel has produced enough gas to meet its contracted export volumes, plus a small surplus it sells on Asian spot markets, and then hoarded the remiander so the local market dried up.
It is the small export surplus of spot gas that is all that matters to this ‘debate’, though you wouldn’t know it from the ‘debate’.
The small surplus is plenty to fill East and West Aussie shortages. Every reference you read to export contracts as a reason not to reserve gas on the East Coast is a lie.
The greatest liar of them all is your government.
Labor backbencher Ed Husic has called for stronger action to prevent foreign countries that buy Australian gas from onselling it to other countries and for Australia to “assert ourselves”, a position that is at odds with the resources minister.
The former minister told the ABC’s Afternoon Briefing that Australia was paying “extraordinary prices for an Australian resource”, partly blaming “a lot of foreign multinationals that are on a great deal” who onsell gas to other countries rather than using it domestically.
He said a “use it or lose it” mechanism should be introduced, including for existing contracts between gas producers and foreign countries.
Mr Husic’s comments put him at odds with Resources Minister Madeleine King, who last year dismissed concerns that Japan was seeking to purchase gas primarily to “profiteer off gas and onsell it”, describing it as a “peak conspiracy theory”.
“Gas to Japan is exported out of Darwin and Western Australia. So if the argument is somehow if we stopped exporting gas to Japan from Western Australia and Northern Territory that it would suddenly become available to shore up supplies in the east coast, well, that is just manifestly incorrect … that’s not a joined-up system,” she told Radio National in June last year.
Ms King also told the Australian Financial Review this week that Australia’s gas exports had been a positive during regional security discussions, as the government seeks to assure its trading partners that any future east gas reserve would have a minimal impact on existing contracts.
“This is what makes Australia really relevant in that region, is our energy exports. They put us in a very good place to be able to speak with strength about international issues,” she told the newspaper.
Rubbish. All East Coast gas cartel exports do is kowtow to China. Nobody even has the balls to mention that, so how does it increase our influence?
We look like what we are: a grovelling energy satrap crawling around the region on all fours with a Chinese jackboot on our backs.
But I digress. The policy we need to reduce prices and secure Australia’s energy future is to redirect locally the tiny fraction of our immense gas production that is exported as spot sales, nearly all of it to China.
As it happens, such a policy has been proposed. First by MB, then by Peter Dutton.
In it, Dutton suggested a simple and ingenious mechanism, called an export levy (effectively a tax set at any gas price you like), which means any gas exported above that price is collected as tax, and all gas sold locally is below that price.
Dutton planned to apply the levy to all export volumes if the current spot sales were not sold locally instead, creating a permanent surplus to domestic demand.
This meets all export contracts. It prevents the gas cartel from hoarding to create local shortages, it lowers domestic gas prices to whatever level you like, and it raises tax revenue. It does precisely nothing to upset Japan.
It is win, win, win, win, win.
All the pathetic Albanese government needs to do is follow Dutton’s example. There is no downside to doing so. Albo will appear above politics and be in control of the national interest. He could even rebrand it as his own, and the megastupid press wouldn’t notice.
That he is not doing so is not politics.
What it will do is crimp gas cartel excess profits, and that Albo the corrupt will not accept.
