Bruce Robertson, an energy financial analyst, recently addressed a community meeting of landholders who will be impacted by the Hunter Gas Project. He spoke about systemic problems and the corruption of process that are inherent to gas production in Australia.
Australian Gas Exports and the Gas Cartel
Australia exports 72% of our east coast gas, 9% is used to turn the gas into liquefied natural gas (LNG) so it can be exported, 2-6% is lost in the shipping process.
The LNG exporters located in Gladstone are Shell, Santos and Origin. They act like a cartel as they control 90% of reserves on the east coast of Australia. They dominate the market, collude on the price and are involved in joint ventures and joint marketing. They lobby the government intensively and donate to major parties.
The ACCC describes features of the Australian energy market as matching those of a cartel, but stops short of calling it a cartel because cartels are illegal and the ACCC is supposed to prevent them. There is no political will to enforce the law.
The high cost of turning gas into LNG for shipping means gas for the domestic market should be cheaper than export gas. But at times the price of our gas in Japan has been cheaper than the price on our domestic market.
Corruption of process
Gas lobbyists feed governments misinformation from what seem like respected institutions such as the CSIRO and universities. However, the gas industry has managed to partly privatise research institutions with their investments which has corrupted much of the research being undertaken and this means it is not independent.
David Knox, as CEO of Santos, built two trains for the GLNG export terminal in Gladstone when they only had enough gas for one. The company has written off $5 million on this terminal.
After the slide in Santos’ fortunes Knox left and was appointed to the CSIRO board where he made decisions on coal seam gas research funding.
The CSIRO logo is on all research from Queensland University’s Gas Industry Social Environmental Research Alliance (GISERA) which is funded by the gas companies. Research is watered down to suit the companies who pay them.
Other institutions and universities are funded by fossil fuel companies and associations too.
Knox is now Chair and Non-Executive Director of Snowy Hydro. The budget for Snowy 2.0 has gone from $2 billion to just under $6 billion and is 12 months behind schedule.
Big Projects
Governments and people in the energy markets love big projects by big companies because they think they’re going to solve big problems.
Big companies swallow successful start-ups, consolidating the energy supply industry and impeding competition.
A diversified system in the electricity market is so much more resilient because if one part of it goes down it’s not a big deal, if it is delivered late it’s not a problem. With coal leaving the system and a big project like Snow Hydro 2.0, predicted to be late …… it’s likely to be a problem.
Counting Emissions
Over the past 5 years Santos emissions have risen by 94%. Meanwhile, pressure is building from our global trade partners for more action on climate change.
The main emissions from gas occur when the gas is burnt to produce electricity. If gas is exported and burnt to produce electricity overseas, these emissions are classified as Scope 3 emissions which Australia doesn’t have to account for.
The Greens and Independents believe Climate Change is a global problem and want to reduce our Scope 1, 2 and 3 emissions, while the Coalition and Labor look at it as a national problem and want us to only reduce the 13% of Scope 1 and 2 emissions.
Further reading
16 March 2023 There is no “gas shortage,” just a shortage of ethics and integrity from the gas cartel Renew Economy
Sydney Knitting Nannas and Friends 