It really was a fascinating submission. I learnt a lot about Strike, especially the reality of 'spot prices' (which feature in all the company presentations), and what the high degree of uncertainty about spot prices means for attracting capital. SN actually made some very important and pragmatic suggestions seperate from the export issues, firstly, about creating a transparent market for gas in WA akin to the electricity market (i.e. no more secret GSAs) and, secondly, about lowering capital costs by ~35% by allowing WA producers to have in-pipe CO2 levels at the national standard (~7% rather than <5%). I didn't realise this had such a huge impact on plant construction costs.
The arby bargy with Mr Beard was quite interesting, in particular, how SN refused to answer the question about whether a 15% reservation policy would result in a 700% increase in overall production (to keep domestic supply constant). Mr Beard couldn't get his head around the idea that an increase in supply is a function of access to capital (and when the capital is available). I think everyone knows, however, that a 15% policy is unlikely to result in a 700% increase in overall supply (unless, the reserves in the Perth Basin are huge enough to compete with the NWS, for example). I think SN's tacit position, however, is that STX should have access to export markets on the same 50:50 basis as Beach. In fact, the examples he gave referencing Beach answered Mr Beard's question convincingly - ie. that even partial access to export markets would dramatically increase access to capital and, thereby, expant domestic supply. But SN couldn't exactly come out and say "hey guys, we aren't actually arguing for a 15% policy" because if that, in fact, happened it would be mana from heaven for the company. I think he did a very good job of saying "the policy is up to you guys. Do your bloody job," rather than looking like a self-serving O&G exec.
I can actually see SN having a career in politics, and I mean that as a compliment.
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