September 12, 2017 Read More →

Australia’s Gas Cartel

ABC Australia:

Battle lines have been drawn between the gas industry and its critics over whether allowing fracking to resume in the Northern Territory could help solve the east coast energy price crisis.

The industry is using the idea of NT gas being a solution rather a problem to persuade the NT Government to lift its fracking moratorium by the end of this year.

Gas companies are arguing that bringing more supply into the domestic market will bring down prices.

But analyst Bruce Robertson from the green-tinged Institute for Energy Economics and Financial Analysis points out that the Territory is a remote, high-cost location, with high pipeline transport costs.

“Producing high cost Northern Territory gas, which is very high cost gas, about $7.50 a gigajoule, is no way to bring down the cost of gas on the east coast of Australia,” he said.

He blames the big companies for high prices, because they have committed to selling most of their gas overseas under long term contracts.

Under those contracts the companies are getting paid less because, ironically, international oil and gas prices have fallen due to a global glut.

“They simply cannot produce the gas cheaply enough to make money on their export business,” Mr Robertson said.

“But what they’re doing is they’re making that up by gouging the east coast consumer.”

More: Cartel accusations fly over gas industry’s assertion it would reduce power prices

 

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