Australian LNG

Australian LNG has a long history of pioneering investment. From the North West shelf to the first floating LNG project ever constructed.

Like other Australian commodities this history aligns with that of development economics of Asia. The first wave of Australian LNG development grew to service a modernising Japan and its demand for energy.  This bilateral relationship has a long history of cordial relations, share-equity investment and oil-linked contract pricing to satisfy both parties.

The second wave of Australian LNG was far more chaotic, matching the staggeringly swift rise of the much larger Chinese economy. It began along with the pre-GFC oil boom and Malthusian assumption that the world was going to fall short of everything as the enormous Chinese and then Indian middle classes ballooned and consumed more energy per capita.

Multitudinous LNG projects were sanctioned in Australia which found itself by 2010 developing no fewer than seven LNG project simultaneously. Needless to say this did not end well with gigantic cost blowouts for all as they competed for labour and other resources.

Yet, as the commodity super cycle peaked in 2011, demand suddenly fell well short of expectations and kept doing so over the next four years. Making matters worse, the US shale revolution suddenly turned that nation from net LNG importer to net exporter of a magnitude equal to Australian LNG. The global glut from 2015 was enormous.

The Australian LNG boom included a particularly cavalier offshoot in QLD where coal seam gas was liquefied via three projects on Curtis Island. As the boom subsided, and oil-linked prices crashed, the companies involved were all either sold or destroyed.

The legacy left by the projects was one of very high Australian gas prices with very low Asian gas prices, also delivering an huge blow to the competitiveness of the east coast economy. Thus the $200bn investment proved to be the greatest single capital mis-allocation in the history of the Australian economy (and surely global energy markets) and was little more than a monument to Banana Republic economics as tax takes failed, income fell and hollowing out transpired on raised local costs.

MacroBusiness was the only analytic house to call the Australian LNG bubble early, track it and predict its demise. It continues to cover the LNG sector with daily updates and a large grain skepticism and is a must read for anyone that needs to know the economic forces coming to bear on the sector.

Also check – Daily Iron Ore Price, Australian Dollar


Gas lobby dreams turn nightmare!

The oil and gas lobby is having itself on big time at the AFR: Nationally consistent policy, improved regulation and better tax rules could help unlock billions of dollars in investment in Australia’s oil and gas sector and create thousands of jobs, according to a new report. Industry lobby the Australian Petroleum Production and Exploration


NSW has destroyed Morrison’s “gas-led recovery”

At the AFR comes the Morrison’s Government worst minister (and that’s saying something): Federal Energy Minister Angus Taylor has demanded the NSW government hand over the modelling behind its energy infrastructure road map amid worries in Canberra it will push up power prices and among electricity suppliers that the policy will derail planned new gas


Coalition digs its energy hole so that it can fill it in

Here’s what Coalition brains trust, Brian Fisher, author of the Menzies Research Centre report Powering out of Pandemic: Unleashing the Potential of Gas, writes today at the AFR: The competitive advantages of natural gas in our changing energy mix are too great to be ignored, even by its would-be detractors. With two-thirds of Australia’s coal


Grattan: Morrison Gas Unplan to lift power prices

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Morrison Gas Unplan to burn taxpayer dough in stranded assets

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Morrison gas unplan to lift power bills

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Benefit of LNG imports “unquestionable”

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Via The Fake Left: A former New South Wales judge has called for “independent” to be dropped from the name of the state’s planning commission after it approved the controversial Narrabri coal seam gas development, arguing the body is effectively controlled by the government. The commission on Wednesday gave what it described as “phased approval” of the


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Empty Chair agrees to Morrison gas joke

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Morrison’s Keynesian gas pork abomination

Yesterday we saw the “gas-led recovery” plan”, via ABC: The potential for a taxpayer-backed, gas-fired power plant comes as the Federal Government turns its eye to the troubled gas market. The east coast gas market has boomed under the development of Queensland’s coal seam gas fields over the last decade. But while that has made


ScoMo farts ‘gas led recovery’ nonsense

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Fool me once. Fool me twice. Gas cartel poisons east again

Via Michael West: Santos has lodged a big report based on false assumptions to push its Narrabri CSG project through regulators. Its independent expert is not independent, nor expert. Michael West investigates. They thought they could get away with it; that is, lobbing a chunky “independent expert’s report” at one minute to midnight in a bid to


Aussie households slowly kill gas cartel with solar

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Santos takes a whiz on ACCC (and you)

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