Commenting on news that the Turnbull government will not place curbs on LNG exports, Bruce Robertson, Gas/LNG Australasia analyst at IEEFA said:
“The so called gas ‘crisis’ in Australia is not about supply. It is about a business model engineered by four energy companies – BHP, Origin Energy, Santos and Shell – to restrict supply to Australians in order to force prices up.
“It is deceptive for the Prime Minister to say that unlocking onshore gas resources in Victoria and New South Wales would solve the price gouge we have seen in those two states.
“Victoria produces more gas than it consumes – sending surplus gas to Adelaide, Tasmania and Sydney. Extracting more gas domestically is simply too high a cost in a world where there is a glut in supply and prices have crashed.
“Producing high cost gas from remote regions in the Northern Territory is not a globally competitive solution nor is the uneconomic Narrabri project a viable solution to the current gas price problem. Extracting difficult to access gas is no way to bring down the price of gas in an oversupplied market.
“We are seeing a permit sitting by Shell, amongst others, as they restrict supply to the domestic market. All the while they are supplying gas at a loss to offshore customers. Essentially Australians are subsidising loss making exports.
“Prime Minister Turnbull is sacrificing the pockets of Australians by not standing up to the gas cartel.
“Australia needs a domestic gas reservation policy to bring the price down. This whole issue is not about supply it’s about price.