I haven't read full documents but I don't believe the fuzzy things politicians are saying to different interested parties . Public and media will hear all sorts of targeted versions different to reality of policy and what comes in the budget IMO This is on the surface not inflationary but RBA will IMO see it as restriction on supply and inflationary to public and manufacturing industry and locking in transition to green energy even more expensive .
Use it or lose it- you know it only takes a week or 2 to - well maybe 3 to discover a resource, connect to infrastructure and use it!!!! Simple and cheap with no red tape either in some imaginary politicians world
Yeah it is a classic. If a large company has a gas asset and chooses not to bring on that gas supply and instead uses gas it buys in elsewhere ( such as from easy tie in fields near pipelines which are stranded assets as small companies can't fund building infrastructure ) as it is cheaper as they have no idea of market as government policy is so wishy washy and they might just cap the market again ( Oh wait I mean only cap companies with values and volumes over a certain limit!!! ha ha- yet another uneven playing field )
I think the government and politicians must think that pipelines are public assets and that they can force access to put gas in them and they believe there is some sort of unlimited capacity and such a network that they can put gas in anywhere and pull it out anywhere else and it cost nothing - they live in a dreamworlds.
I don't think governments understand the scale required to justify infrastructure and the length of time it takes to pay down the capital cost of that infrastructure and any capacity any updates and maintenance etc
How bout they just nationalise the lot- They want private money to invest but they want to set sale price cap and volume reserve and not base it on reality of total cost of production on a industry they want to close down via policy ? ?
If the government wants to retrospectively introduce gas reservation and cap prices on existing producing fields they can compensate gas producers at real total cost of full life or all discovery development and infrastructure .
A only a dumb government can interfere with a market believing these interventions will fix it and not affect all the GDP earnt from exports and when the interventions literally kills future investment or funding from banks and then all the loss of employment and production in Australia - there goes balance of payments .
Orica - explosives manufacturer - massive gas user - gee I wonder what is used to get green energy and battery minerals out of the ground that goes bang? Perhaps all the teals and greens can get out there with picks and shovels as minerals for green energy and fertilisers don't grow on trees ?
Poor little ol' Orica who wanted a gas gap but now it doesn't suit them so veiled threats ?
Part of article below
https://www.abc.net.au/news/2024-05-10/future-gas-strategy-manufacturing-risks-price-competition-energy/103830000Orica boss warns Future Gas Strategy leaves local manufacturing at risk without guaranteed lower prices
By business reporter Kate AinsworthPosted Yesterday at 6:04am
- In short: Orica CEO Sanjeev Gandhi says higher gas prices are resulting in a less competitive manufacturing industry that isn't addressed by the government's future gas policy.
- Energy analyst Tim Buckley says the federal government's new gas strategy is "bizarre" and at odds with its decarbonisation efforts.
- What's next? Full details of the federal government's Future Gas Strategy will be outlined in next Tuesday's budget
The boss of Orica, a major explosives manufacturer that relies on gas, says the federal government's gas strategy won't assist what remains of Australia's manufacturing industry unless it caps prices at globally competitive levels.
On Thursday, Resources Minister Madeleine King unveiled the federal government's Future Gas Strategy — a plan for further investment in gas in Australia "through to 2050 and beyond".
The plan reveals the government's intentions to speed up gas projects to prevent energy supply shortages, stating that new gas sources are needed to help Australia's energy transition process.
Explosives manufacturer Orica uses a large amount of gas in its production process, but its CEO Sanjeev Gandhi warned that the government's policy would do little to assist struggling manufacturers unless it ensured that gas prices fell.
Currently, wholesale gas prices are capped at $12 per gigajoule after the temporary measure was introduced by the federal government in December 2022. The cap was extended in April last year until 2025 in an attempt to reduce rising energy costs.
The measure also allowed for gas producers and affiliates to apply for a price cap exemption, however Mr Gandhi said that had effectively turned the cap into a minimum price for new contracts.
"Those exemptions have unfortunately turned the $12 cap into a $12 floor today, so nobody is wiling to make offers below $12," Sanjeev Gandhi told The Business.
"We, at Orica at our Yarwun site in Queensland, just signed a contact for $12. Now, to put it in perspective, I have manufacturing in North America where I can get an equivalent of less than $4 gas.
"So $12 already is more than three times more expensive than what I can source elsewhere in the world."
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