The Treasury of Common Sense with Leith Van Onselen

first be supplied to Australians. They basically open up, allowed the building and then the opening up of these mass export terminals out of Gladston, Queensland, which basically freeze our gas, put them on ships and then sell out to Asia, mostly to China. And gas exports aren't uncommon around the world. There's other places that do it. Western Australia does it.

For example, the United States does it, a whole bunch of places to do it around the world, But every other jurisdiction except for the East Coast of Australia, which has a gas that exports gas, has a reservation policy whereby they're required to supply the domestic market first before they can export. But for some crazy reason, we decided not to do that in the East Coast and this polsy era has made as I said, East Coast Australia only gas export in jurisdiction in the world not to

have a domestic reservation policy. And what that's meant is that we pay the highest gas prices in the world out of every gas export in jurism which is crazy stuff. So despite doubling so these gas export terminals came online in twenty fifteen in Gladston, Queensland, and since that happened, we've actually doubled production gas on the East Coast of Australia, yet we're actually supplying twenty five percent less gas to

the domestic market. So what we're what they're effectively done is they've ramped up production, but they've hoovered the gas offshore and they're selling most of that to China, and we on the East Coast. We export nearly three quarters of our gas, but we starve the domestic market of gas and as a result, the East Coast price is roughly tripled since these exports came online. So back in twenty fifteen, we're paying around four dollars a giga duel

for a gas in these coast. Now we're paying twelve dollars plus. It depends on the data. You know, average sort of around twelve dollars now, so it's basically tripled. But you know, it does go up and down. So a couple of days ago was at sixteen dollars, for example. And this surge in gas prices on the East Coast has actually driven up your electricity bills as well. So if you're listening to this in Sydney and Brisbane, your electricity prices, as you all know, have gone up as well.

And part of the reason for that's not the only reason, but part of the reason is this surge in gas prices. So it's a double way. It's driven up gas prices, which is harmed manufacturing. I live in Victoria, where we heat our homes of gas that's pushed up those prices has made costably being a lot more expensive then, so I've driven up all of our electricity prices because gas is one of the price centers in the wholesale electricity market.

So during the election campaign, the Coalition promised to implement these coast gas reservation policy was actually excellent policy, and what they wanted to do is they want to basically force the East Coast gas producers to divert their uncontracted gas.

So at the moment that they've got these tracts that start to expire in twenty thirty all the way through to twenty thirty five to supply China mostly, but there's also uncontracted gas, which is basically they sell in what's called the spot market, which is the uncontracted gas market.

Just the price fluctuates every day, and the Coalition wanted to force them instead of selling that uncontracted gas overseas, which they're doing to supply the domestic market, to bring down prices and the costume promised to lower these cast gas price to blow ten dollars a gigiteel from you know, as I said, twelve dollars can be more than that depending on the day and the counterfactional to doing this fill is before. We don't have a reservation polse, we

don't fix this problem. We're actually despite the fact that the East Coast exports nearly three quarters of US gas, we're actually scheduled to start importing gas to open up import terminals, import kemel in New South Wales and then

also in Victoria later and then possibly South Australia. It was going to be late this year, but the timetable keeps getting pushed out, but it could be next year or the year after, and when we start importing gas, the price is actually going to rock it even higher because at the moment we're basically paying the international price,

but the export parity price. What that is, it's the international price but before you've liquified and before you've shipped it, so that the liquefaction process and shipping adds like another three dollars a giga jewel more than that often, but will effectively be paying the current price of plus a significant margin above that, and it could go up to twenty dollars. We don't know, so we really want to

avoid that. But unfortunately Labour's Resource Minister during the election, Medaline King, dismissed coalition's gas policy called at the thought bubble. Just last week, Prime Minister Antony Albert He's actually I think his week before claimed that the coalition's gas reservation policy was quote plucked out of a coco. Yes, I think I mentioned that a few weeks.

a reservation. East Coast Australia is facing the prospect of having the import L and G. We're facing shortages, We're facing the sky high prices, and those sky high prices will see the electricity price higher and that's going to push up inflation. Send more manufacturing broke because gas, industrial heat from gas and just electricity more generally, it input to the manufacturing process and if you drive the cost of that, we become less competitive. We're going to send

all this stuff offshore. Now that This is a long winded introduction to what has happened this week, which just adds even more fuel to the idiocy fire. So this week we saw Australia gas idiocy idiocy basically mushroom and become worse. So patrolling Australia is like a An industry newsletter reported that the country's largest liquified natural gas export on ease cast. They're called Australia Pacific LNG, which is

partly owned by Origin Energy. They've agreed to substantial price reduction on their contracted gas with China, which and the contract with China's China in effect, which is Chinese communisty owned energy firm. So currently this age of Pacific l and G supplies China with East Coast liquified gas. They provide that seven point six million tons a year, which is huge, it's a massive amount. And what they've actually agreed to is to cut the price for Chinese buyers.

And the reason why they want to cut the price is because the international gas price has fallen a bit and under the contract term they have to renegotiate it every couple of years when the price falls. So what this is basicly going to do it's going to lower the cost for Chinese buyers of our gas at the same time as Australians are paying higher and higher prices for our gas. Now, the industry estimate is that this new contract price is going to be as well as

thirteen dollars gigdule now. When this price cut was announced a couple of days ago, Australia's East Coast spot price, so that's the current trading price, was traded at sixteen dollars now and local contract prices, so this is a lotness of stuff under contract, not failable on the you know, on the fluctuating instant market is tracking around fourteen dollars gigdule. So what this means is that Australian East Coast gas is going to be cheaper in China than it is

in Australia, which is just nuts. And that's despite the fact that it costs you know, three dollars or so to liquefy the gas and then the ship it. So you know that this is clown show. Stuff fell and just to make it worse, Japan and China, so Japan mostly against West Coast gas, but China gets East Coast gas. Japan and China are both receiving more gas than they

need from Australia and actually re exporting a profit. So again they have these sort of lower prices and then they're reselling it in international markets for a profit and making money off it. So the other question here is why the hell are Australians being starved of their own gas and forced to pay more than you know, some

Asian nations who we sell our gas to. And if you see, got even worse phil because just as just after this was reported earlier this week and sort of from Abu Dhabi in the Middle East has launched an eight point seven billion dollar takeover bid for gas giant austraining gas giants Santos and they run to export L and G trains out of Gladsnes, so they're also sucking up our East Coast gas and selling it up short Asia.

So now it's now the Middle East one in and they want to buy that export train, so potentially Straight can lose critical natal energy assets to a Middle East and conglomic and you know, you have to ask the question why are as trains the last in line for their own gas? Why are we being starved of our own gas which is forcing cost of living. You know, I live in Melbourne, as I said, and we use gas for heating, so we're paying, you know, through the nose to just eat it to heat our homes. I've

got a gas stove or gas water water. Manufacturing manufacturers are paying through the nose for their gas, which is seen in the whole bunch of manufacturers broke. We have the smallest manufacturing share in the advanced world. We've just seen our last major plastics manufacturers shutdown last year, our last architectural glassmaker shut down this year. We've seen a whole bunch of manufacturers threatened the clothes or downsize, where

we've lost fertilizer makers. The reason why the companies have left is because of expensive energy costs, primarily gas. So what are we doing here? And these super high gas prices are also forcing up our electricity prices, which again feeds into everything in the economy. If Australia doesn't have cheap energy, we don't have a modern economy. It's as simple as that, and it is the bedrock for modern economy. And yet we've got this clown show happening. We're the

only place in the world on these coasts. It doesn't reserve our gas for domestic use first. And we've got these these foreign an gas companies and I'm saying even Santos it's you know, trade on the Australian sockey change, but it's it's primarily foreign owned. But the people are

in the shares are offshore. So we have all these foreign own gas companies which are basically pillaging this coast for its gas, starving these coast consumers of gas, forcing up our prices, causing our manufacturing sector to move offshore and go broak, which costs us jobs, makes us less diversified economy, pushed up the whole cost base throughout the economy. And you know this is all happened at the same time as the Albanie government wants to build one point

two million homes over five years as the housing target. Well, guess what, phil One of the main inputs building homes is bricks, right, But brickworks requires which which is one of the major makers of Australian bricks. They require gas, you know, to make the bricks, and if you make expensive, you make bricks expensive. Were therefore pushed up the cost of housing. So that's just one mere microcosm of the

sort of costs we're dealing with you. But the fact of the matter is Australia is the second biggest gas exporter in the world. We're the biggest coal export. We have tons of your owning which you have the cheapest energy in the world, or some of the cheapest energy in the world. But instead, through idiotic policy and again utter neglect from our policy makers and just allow these companies to run right on us and do whatever they want.

We're getting absolutely shafted here. And the fact the matter is that Australi's gas belongs to Australians. Our riches should come first, and without reservation, Without reserving our gas and forcing it to be supplied to Australians first at a reasonable cost. This energy inflation is going to continue to rise, the cost of living pressures will remain infuding, will remain higher than it should be. An Australias economy is going to continue to be industrialized. It is that serious.