Trader, I am sure there will not be many people prepared to follow the advice of Mark Ogge. He is a Director at Beyond Zero Emissions who in real life is a professional artist (painter) currently represented by Flinders Lane Gallery in Melbourne. He is about as far removed from the nitty gritty of NSW gas supplies as you could possible get.
So before we get carried away with commentary by pseudo economists with a very short memories and no experience with NSW gas supplies it is probably worth repeating a few observations: -
The potential for long term shortages of gas on the east coast (especially Qld and NSW) have been recognised for more than a decade.
Originally it was thought the gas would come down a very large pipeline from PNG. There were several years of planning and negotiation over these gas supplies. At the time, I never saw any comments from Mark Ogge that pinching gas from New Guinea was going to drive up the local PNG gas prices to Australian levels. Nor did I see any commentary that this gas development was going to be bad for the PNG people. In fact the development and progress it would bring was welcomed in PNG. Most people in Australia also saw it as reasonable that a country with a surplus gas supply (PNG) would sell it to states that needed it, like Qld.
Gas from PNG was not going to be cheap and would have driven up the east coast gas prices. It was this potential for gas price increases that made CSG in Qld viable. It also was not the multinationals that developed CSG in Queensland. Several did try but failed. It took Australian ingenuity and Australian money to prove that Queensland CSG was commercial.
It first became obvious that there was indeed sufficient CSG in Queensland to make the PNG gas pipeline unnecessary. Subsequent work established there was so much CSG in Qld that the east coast market could not possible use it all. At that time, no doubt due to short sightedness, no one in NSW even wanted to contract the gas. So that is when the multinationals, with access to the necessary cash, took an interest and began developing the export LNG projects.
Given we were happy to take gas from PNG, it is a bit rich, and probably racially prejudiced, to now say that we should not supply gas to other countries who need it. Especially when the gas reserves are so great that we can not use it in the foreseeable future.
From an economic standpoint, if we want companies to explore so that we have sufficient local gas to meet our future conceivable needs, we have to expect that these companies will want us to pay the going world price. Although there are lots of people who expect their lives to be subsidised by others, it is not a reasonable long term expectation. So if you want gas, you have to be prepared to pay the price. And that price cannot be kept low by some artificial subsidy, like a reservation or a no export policy.
To believe otherwise, is to live in fairy land.
Oh and by the way, because we didn’t take the gas from PNG they are developing their own LNG export project which will compete with the Australian ones. It should be exporting LNG next year before the Qld projects.
