Yet more on this theme in today's Australian in an article...

Yet more on this theme in today's Australian in an article written by Incitec Pivot MD. Government policy fail is BPT shareholders gain! And it will not change irrespective of which party is in power at the Federal level. Note prices, $12 GJ and "world parity prices". $12 is near enough oil parity.

Here is an extract:

"Other countries throughout the world support local industry first. Our cousins across the Pacific are examples. Canada has a national interest test before gas is exported. In the US, President Barack Obama has committed to create 600,000 jobs by the end of the decade using local gas.

The practical result of the contrasting US and Australian government positions is that the price of gas in the US is currently about $US2 to $US3 per gigajoule compared with an estimated forward contract price of up to $12 per gigajoule in Australia, as estimated in this year's Queensland Gas Market Review.

Incitec Pivot is taking advantage of the US situation by studying the development of a world-scale gas-supplied ammonia plant in Louisiana but, sadly, is not investing in future back-to-gas plants in Australia.

We will not be the only Australian company to take the unfortunate, but necessary, decision to invest overseas, not at home. The situation is urgent because these investment decisions, which will heavily affect Australia's future, are being taken now.

The only government in Australia that has acted is in Western Australia, where some new gas export projects are required to reserve 15 per cent of gas for local use. Federal Energy Minister Martin Ferguson is critical of this approach despite the evidence that suggests it has not affected local exploration and development of gas reserves.

Australian homes will feel the pain, too, as household energy costs skyrocket.

Economic analysis by Port Jackson Partners warned in 2009 that wholesale energy costs could double over five years, citing eastern Australian gas prices approaching world parity price as export LNG gas facilities are developed.

Research released last month by the DomGas Alliance predicted that serious gas shortages and sharply rising gas prices in Queensland could cost the state between $420 million and $1.8 billion in higher energy bills. This is the state which will be exporting 25 million tonnes of gas by 2016."