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
This is such a bad analysis that I don’t know where to look: Outages at coal fired power stations have pushed up gas prices on the east coast of Australia spiked, sending wholesale electricity prices surging across the National Electricity Market. Spot gas prices hit $19.31 a gigajoule in Brisbane on April 9, according to
Of all of the economic evils of the Morrison Government, this one is the worst. The new outlook for the AEMO for gas: In the short term, new greenfield infrastructure solutions are unlikely to be operating in time for the earliest identified risk of gas shortfalls, in winter 2023. Brownfield solutions, such as duplication of
This is so egregious that I don’t know where to look: Energy Minister Angus Taylor will warn the energy crisis facing Europe could happen in Australia unless new gas fields are opened up as he unveils budget funding to accelerate the development of seven projects. As the government moves to make energy security a feature
A side effect of Russia’s invasion of Ukraine has been the jump in oil and gas prices. The result is basically a global Putin carbon tax. Albeit with the proceeds going to Russia and OPEC rather than to national governments. When you add the re-realisation of commodity supply chain instability, there is now an increasing
JPM first: While energy is carved out from the sanctions package, this week it became clear that Russian oil is being ostracized. As of today, 66% of Russian oil is struggling to find buyers. PresidentBidenisfacingpressurefromlawmakersinbothpartiestocompletely cut off US imports of Russian oil and gas. In Europe,the conflict is leading to are think of European energy
Former chair of the Energy Security Board, Kerry Schott, is no climate change or renewables soft touch. She’s a hard-nosed, highly experienced, non-nonsense energy regulator. Today she swats the energy panic insects swarming the Cannon-Brookes AGL bid: The reason for the massive increase in wind and solar renewables is economic. In the wholesale electricity market,
Honestly, Tez, this is just poppycock: Thank you Mike for so promptly demonstrating the truth of what I wrote about Origin’s proposed closure of a real power station, Eraring. That it would have a cascading impact on all the other real – coal-fired – power stations; forcing their accelerated closures, because the totally destructive and
I’ve had my issues with Mike Cannon-Brooks over the years but his latest energy gambit is an absolute cracker: “In the absence of a proposal that provides appropriate value to AGL Energy shareholders on a control basis, the board continues to believe the demerger maximises value for shareholders and is in the best interests of
Honestly, the Morrison Government is an entire pack of psychos: An expansion of the proposed taxpayer-funded power station at Kurri Kurri in the Hunter Valley is being considered by the government amid a scramble to fill a baseload generation gap caused by the premature closure of the Eraring coal plant. Energy Minister Angus Taylor said
If you want to know what PM Scott Morrison is made of then you need only look at his record on the Australian gas sector. Recall this, via The Australian: Centre Alliance has received a written guarantee outlining the Morrison government’s gas policy, which the key minor party demanded in exchange for its support for
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As I have said throughtout the last six months of global energy chaos, there is no underlying shortage of anything. What there is is two many dollars chasing crazed narratives that blow prices sky-high in a period of days before collapsing again. To decribe this as a crazy outcome in the most capex demanding and
The Australia Institute has a new report out that should be the headline around the country but barely gets a mention: Australia’s giant offshore gasfields are paying almost no royalties, create few jobs and are a large and rising source of greenhouse gases, according to a new report from the Australia Institute. The “Gas-fired robbery”
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It still gets the least amount of press of any of the Morrison Government’s disgraces thanks to comprehensive MSM stupidity. But pound-for-pound, there is no more horrendous pillaging of Australia than that conducted by the Morrison Government’s protected gas cartel. Over the Christmas break, there were significant developments in the global energy crisis that illustrate
The energy crisis is back but its causes are narrowing swiftly to Europe where things are getting worse. The European gas market is tightening as winter arrives and prices are up again: Driving JKM futures crazy: Lifting thermal coal: And coking coal: This all matters a lot to Australia. It also brings in iron ore
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I can barely bring myself to write on this subject anymore. It is toxic beyond belief such that it only goes to prove how stupid is my fellow man rather than delivering any kind of justice. I give you the Liar’s latest gas robber baron atrocity: Big gas users have lost a long-running spat with
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It is a breakthrough technology. Using an electronic propulsion and launch system derived from Australian intellectual property, Marshmallow Storm rains sticky, roasted, sugar bombs upon enemy infantry. The effect is threefold: The enemy immediately stops its advance to feast upon the confectionary making them easy targets for an entrenched defensive position armed with the Australian
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