Just wait til the USA starts exporting. The same thing will happen. And watch the cost of gas go through the roof!!
Then what will be the world wide trend? Coal to the rescue and a huge recovery in the price of coal .........
"The carbon tax was a sideshow. Victoria is about to be hit by a real explosion in energy prices, and Victoria especially. In no other state do households rely as heavily on gas.
We have configured our homes, our offices and our businesses to run on gas because it used to be extraordinarily cheap. A byproduct of the extraction of oil from the Bass Strait it was virtually given away because it couldn’t be compressed for shipping or moved interstate by pipe.
Right up until 1998 Victoria’s gas pipeline went no further north than Wodonga. A mere two hours up the road Wagga Wagga got a completely different supply from Moomba, 1500 kilometres away in outback South Australia.
And then the pipelines linked.
Suddenly Victoria’s gas could be sold all along the east coast right up to Brisbane and eventually further north to Mount Isa and Gladstone. Victoria started paying eastern states prices. It’s about to happen again on a much larger scale.
This time instead of paying an eastern states price we will be paying a global price. Whereas the carbon tax pushed up gas prices 9 per cent (and is being removed) the shift to a world price will push up wholesale prices more than 100 per cent and keep them there.
Within months Gladstone will become the first port to send eastern states gas offshore. Each of its six liquefaction units will bottle as much gas as Victoria uses each year. They are meant to be fuelled from Queensland’s coal seam gas, but in case there’s not enough the owners have arranged to get gas from all sorts of places, including Victoria, using the network of pipes that already exists.
It will push up the eastern states wholesale price from around $4 a gigajoule to $9. Japan is said to be prepared to pay $18. It’ll do it because as soon as it is possible to sell gas overseas, gas producers will be able to demand the same price from local customers that they can get overseas (less the cost of processing and shipping). If their Australian customers don’t pay, they will sell it overseas, for the overseas price.
Each time an existing $4 contract comes up for renewal it’s being replaced with a $9 one (sometimes $11). Contracts typically last years, so they are not all being changed at once, but by 2016-17 the average wholesale price is expected to hit $9."
