Ann: December 2019 Quarterly Report, page-40

yep no idea CEO, but we seem to be getting painted with the same brush. And no doubt with the way government works any decision will be dragged out, and the one thing the market hates is uncertainty. This is from the Australian the other day...

Resources chiefs pan gas reserve plan as ‘perverse’

Resources leaders are agitating against the government’s moves towards a domestic gas reservation scheme, with energy titan Richard Cottee condemning the push as “perverse” and warning it will reward states that lock up their reserves.The powerful Queensland Resources Council — led by former Howard government resources minister Ian Macfarlane — and the Australian Industry Group are also sceptical that domestic gas reserves are necessary or have any benefits.After a review into the Australian Domestic Gas Security Mechanism was handed down on Friday, Resources Minister Matt Canavan outlined how he would push forward with potential gas reserves as early as next year. Mr Cottee, one of the founders of Queensland’s booming $70bn natural gas industry, said a domestic gas reservation on the east coast could devalue the price of gas, lessen state royalties, and reward states such as NSW and Victoria, which have locked up some gas resources.“It seems perverse that the federal government is pursuing a policy that may have the effect of decreasing the wellhead value of gas extracted — upon which state royalties are based,” he said.Mr Cottee said this could “lessen the royalties received by Queensland and South Australia for the purpose of enabling the Victorian and NSW governments to posture their “anti-gas” stands. Mr Cottee, now chairman of State Gas and Elixir Energy, said the government should be pursuing an increase in supply instead of domestic gas reserves.“It is a pity that there appears to be a necessity for this policy,” he said. “Reservation is a rationing exercise which increases the market power of the exporters in the domestic market whereas the country needs more supply and more competition.”The government has been working on a raft of gas policy reforms after agreeing to a pact with Centre Alliance senator Rex Patrick to replicate Western Australia’s reservation policy on the east coast.Senator Canavan has said he is unlikely to follow Western Australia in prescribing a 15 per cent cap on volumes and instead work with each region, given states such as Queensland and South Australia already supply large quantities into the market.The Coalition is eyeing the Northern Territory’s giant Beetaloo Basin gas deposit as a prime target for a planned national reservation scheme, declaring Darwin the favoured destination for supplies over the energy-short east coast.Domestic gas reserves have divided the wider business community, with manufacturers strongly in favour of the policy while gas and resources groups have been pushing back.Mr Macfarlane said current “ample gas supply” meant a reservation policy was not necessary.“We’ve got to make sure that enough gas is available for domestic customers and that gas needs to be at a reasonable price based on the LNG netback price (the Australian Competition & Consumer Commission’s benchmark gas price),” the Queensland Resources Council chief executive said.“My understanding is that there is ample gas and it is being priced off the LNG netback price.“I don’t think it (a domestic gas reservation policy) is necessary because there is ample gas but that’s a discussion we will be having with the minister over the coming months.”Australian Industry Group boss Innes Willox doubted a domestic gas reservation would have any short-term benefits.“A reservation might give gas users greater security, or inadvertently undermine them. It may be a long time before a potential reservation has any effects, and it does not look possible to reverse the step change in production and transport costs,” he said.Manufacturers have pushed for gas reserves and Manufacturing Australia chief executive Ben Eade said a reserve scheme was “in the national interest”.“Gas reservation is already happening in Queensland and Western Australia, where it is working for producers and customers alike,” Mr Eade said.