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Citizens Electoral Council of Australia

Media Release Thursday, 25 August 2016

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://www.cecaust.com.au
 

End the price gouging of natural gas: nationalise our natural resources!

Australia will soon overtake Qatar as the largest exporter of liquefied natural gas (LNG) in the world—while domestic consumers pay the highest gas prices on Earth! Experts accuse gas production and exploration companies BHP, Santos, Origin and Shell, which between them control the domestic market, of colluding to keep prices high by rationing their domestic output, while ramping up exports of gas priced at a fraction of the domestic market. This illicit cartel ought to be broken up; instead, the Turnbull government is using this manufactured crisis to steamroll opposition to new coal-seam gas fracking projects that will enrich the gas cartel even further.

The Council of Australian Governments (COAG) Energy Council—comprising federal Minister for Resources and Energy Josh Frydenberg, his New Zealand counterpart Simon Bridges, and the relevant minister from each Australian state and territory—discussed gas supply and pricing at its 19 August meeting in Canberra. In their subsequent communiqué, the ministers asserted: “The international price of LNG and the need for improved access to domestic supply is contributing to higher wholesale gas prices.” This is either unacceptable incompetence, or a blatant lie: readily available figures prove the ministers wrong on both counts.

For example, investigative journalist Michael West and energy market analyst Bruce Robertson reported on 15 July that the June LNG spot price in Japan, Australia’s largest export market, was US$4.27 per gigajoule (GJ), versus an average of US$6.87/GJ in Australia’s East Coast market comprising Sydney, Brisbane and Adelaide—60 per cent higher. “This is even more bizarre”, they noted, “when you consider that, before the gas is shipped six thousand kilometres to Japan at a cost of US$0.75GJ, it first has to be liquefied at an LNG plant at a cost of US$1.50/GJ.” So ridiculous has the situation become that manufacturing industry peak body Manufacturing Australia has mooted importing gas from the United States, which it says would cost one third less than local gas by 2018. “If we got to that stage it would be a major fundamental policy flaw of all governments”, MA chairman Mark Chellew told The Australian Financial Review on 17 August. “It is a flaw that we’ve got to the stage of having to seriously consider it.”

As for supply, Robertson pointed out in a video interview with West that whilst no-one knows exactly how much gas there is (companies are not required to disclose their reserves), BHP head of petroleum Mike Yeager let slip in 2012 that just one deposit, the company’s joint venture with Exxon in the Bass Strait, had “plenty of gas” to supply the East Coast market “indefinitely”. (Robertson further noted that the BHP/Exxon joint venture is an “illegal market structure under Australian law”, but “unfortunately the ACCC [Australian Competition and Consumer Commission] doesn’t seem to want to prosecute”.) They and the other producers, Robertson said, are “restricting supply to the Australian market to make higher profits. It’s that simple.” The COAG communiqué announced the formation of a Gas Market Reform Group, but makes it clear that this group will focus mainly on Australia’s three monopoly gas pipeline operators—themselves an unregulated cartel that definitely needs busting, but also a convenient scapegoat.

Trojan Horse for CSG

The COAG communiqué gives a green light to the resumption of “fracking”—the “unconventional” hydraulic pre-fracturing for coal-seam gas. Fracking is highly invasive and disruptive to agriculture; wastes large volumes of water and often leaves both ground and surface water contaminated; and is, as demonstrated above, totally unnecessary given the volume of gas already available. In late 2013, just-elected PM Tony Abbott announced that he would “fast-track” fracking approvals by transferring them to the states, but instead a community backlash pushed New South Wales into heavy restrictions on fracking, while Victoria declared a complete moratorium. To the delight of the gas cartel, Frydenberg has now seized upon the high price of gas to hector the states into letting operations resume. “He urged states concerned about onshore drilling not to impose blanket bans …”, Yahoo Finance reported on 15 August. “‘I don’t think they would want to be explaining to their constituents why they adopted policies that drove prices up’, Frydenberg said.” It is Frydenberg who should be forced to explain why the Coalition government is deliberately ignoring the facts, in pursuit of an agenda that will benefit some of its biggest corporate donors to the detriment of the Australian public.

‘Nationalise our oil & gas, raw materials!’

Under that headline, the CEC stated in a 22 July 2008 media release: “Our continent and surrounding waters contain some of the world’s greatest deposits of oil and gas, literally oceans of it, while hundreds if not thousands of on- and offshore oil wells have been drilled and just capped, in order to create an artificial shortage.

“Therefore, to protect the Common Good of this country, both in the present international hyperinflationary crisis, and to secure Australia’s future, the Citizens Electoral Council calls for the nationalisation of all our oil & gas deposits, together with our raw materials in general.”

That release concluded, “As Australians, we must decide: Will we continue as a typical, ever more immiserated British colony looted for its raw materials resources, or shall we become, at long last, a sovereign nation state securing the Common Good for all of its citizens?”

To fight for Australia to become a sovereign nation that controls, develops and uses its own resources for the benefit of the all, join the CEC.

Click here for a free copy of the CEC’s vision for Australia’s future economic development, “The Infrastructure Road to Recovery”.

Click here to join the CEC as a member.

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