How crazy is this? Australia is about to become the world’s largest exporter of natural gas, but there’s not enough for the Aussies themselves. They face soaring prices, factory closures and job losses because most gas is exported.
But wait – there is worse. Global gas futures have fallen by 25% over the past two and a half months. The United States market is in glut, and producers are desperately trying to flog off surplus gas to anyone that might buy it. Australia is the obvious candidate.
Such an action would be a humiliation to the nation’s gas producers and to our inept political leaders who have allowed a country that has arguably the world’s richest reserves of energy to face grotesque energy insecurity and ridiculous consumer prices.
Prime Minister Malcolm Turnbull recovered some lost ground on Monday after spending an hour ‘jawboning’ gas chiefs, who agreed to release or divert enough gas to meet domestic requirements.
Turnbull said: “There is no point in being the world’s biggest LNG exporter, and not having enough gas for Australians”.
There will be another meeting in a month’s time to finalise the details, but Turnbull said his government “will not shrink” from using its constitutional powers to force the companies to divert gas to domestic customers if they do not stick to their verbal promise.
It is beginning to look as if he will not have to carry out this threat – despite being urged to do so by the Opposition – because two of the three major gas producers have already said they will provide the domestic market with the gas it needs; another is considering it. However, no agreement on price has been reached, so we must wait and see if this is a triumph for Turnbull.
The Prime The prime ministers played another unexpected card by promoting a $2 billion expansion of the Snowy Mountain hydroelectric scheme to provide 50 pc more power as back-up to feed into the national grid, easing pressure on the electricity supply at peak times in New South Wales, South Australia and Victoria.
Having some positive and encouraging moves from the federal government – coupled with a modest and expected rise in US interest rates – helped move the S&P ASX 200 up to the 5800 mark.
Our portfolios did well, with nine gainers, nine losers and two that did not change. The biggest rise came from Evolution Mining (EVN.AX) which soared 17.8%, reflecting the higher gold price. Origin Energy gained 4.22% despite considerable opinion that the oil price will not hold. Tesla (TSLA.NDQ) also gainead from a strong oil price rather than the possibility of a deal with the federal or South Australian government, but with that it must be the favourite to provide battery storage because of the superior technology and simplicity of its product. But we think talk of Tesla building a car factory in Australia is far-fetched, so long as Bill Shorten remains on the scene and with a new chief at the ACTU who seems to have no misgivings about breaking the law.