Later this year, as gas exports from Queensland start, domestic gas prices in eastern Australia are predicted to rise significantly, reflecting the huge volumes contracted to overseas customers in China and other countries.
Jemena, the major gas distributor controlled by Singaporean and Chinese Government entities, has highlighted this in its most recent application to the Australian Energy Regulator, forecasting that the Australian domestic wholesale gas prices will increase rapidly to parity with the international price. Already, household gas prices in NSW have increased by 17 per cent in just the last month in anticipation of major gas exports from eastern Australia. Similar increases are expected in other states.
Furthermore, as the long-term domestic gas supply contracts of major energy utilities, such as AGL, expire over the next two to three years, Australian householders will be even more exposed to the effects of international gas prices.
Read more: The Age – Business Day
Whilst our media is currently obsessing over the threat of returning jihadists from their atrocities in Syria and Iraq and, the Abbott government senses another distraction from a failed budget and asylum seeker policy, there is another long-term threat to our country.
It’s a ‘sleeper’ and, as such, not particularly sensational, so you won’t hear, read or see any mention in the mass media. However, it has surfaced on the ABC and in the business pages of the more responsible press. It’s a threat to both the household budget of every Australian and to our remaining manufacturing sector and, hence, jobs.
It’s the flow-on affect of the massive commitment in export sales of our newly developed east coast natural gas resources. Primarily coming from Queensland, it will compel all domestic customers to compete in a new global market for this much praised source of ‘cleaner’ energy – that is relative to ‘dirty’ coal. It’s worth noting the ‘clean’ credentials of natural gas are questionable but what is not questionable, in common with coal, natural gas is a fossil fuel and not renewable. ‘
Australia has the unique distinction of being the only developed country to export natural gas without protecting or quarantining a domestic supply at a lower price. When challenged on this, Industry Minister Ian Macfarlane shrugged-off any criticism by maintaining that it is the price we have to pay to operate in the global gas market.
Well, in the words of that rock classic, “it ain’t necessarily so”. Western Australia, which also has massive natural gas reserves and is much further down the track with exporting them has, thanks to the common sense of its state government, legislated that 15 per cent of its natural gas will be earmarked for domestic users. As WA Premier, Colin Barnett, has observed, he can’t understand why the rest of Australia isn’t following his state’s lead.
What do you think? Should Australian consumers be happy to pay higher gas prices because of soaring exports? Or do you, in common with the WA premier, think we should be insulated by commonwealth government legislation? Is this just another example of the failure of our political leaders to plan and protect Australian producers and, hence jobs?