Qld gas exports blamed for power price rises
QUEENSLAND’S rapidly expanding gas exportation market is being blamed for pushing up electricity prices across Australia, with experts fearful a gas shortage could lead to widespread blackouts in NSW.
Rising gas prices means Australians now pay a higher wholesale price for the gas we produce than what it is sold for in Japan.
The situation has been slammed as “embarrassing” by leading energy economist Bruce Robertson who said the “gas cartel” that controls the market was ripping off Australians.
The Australian Energy Regulator’s State of the Market report identifies rising gas prices as one of the major factors pushing up electricity prices.
The report notes that the exportation of liquefied natural gas (LNG) has caused “significant disruption” to the domestic market and caused record high prices.
Queensland supplies 70 per cent of gas in eastern Australia, but a whopping 58 per cent is now being exported from Queensland as LNG.
The report says “high gas prices” are now hurting gas powered generation, which has become “vital” to the “security” of the electricity supply as coal fired generators exit the market.
The situation is so dire that NSW could be facing a serious gas shortage by the summer of 2018.
“Conditions in the eastern gas market have raised concerns about the future security of domestic gas supply,” the report said. “These issues are emerging more quickly than previously expected, and forecast a possible gas supply shortfall by summer 2018-19 in South Australia, NSW and, to a lesser extent, Victoria.”
From 2016 to 2017 alone the wholesale price of gas in Australia has jumped more than 57 per cent. In the eastern states, gas supply is controlled by six companies. Santos, Exxon, BHP, Origin, Arrow Energy and Shell.
Mr Robertson, from the of the Institute for Energy Economics and Financial Analysis, said gas producers were making a loss on their LNG exports so were price gouging the domestic market to make up the profit.
“It’s nothing short of embarrassing that we’re paying more for our own gas than Japan,” Mr Robertson said.
He said there was a possibility of blackouts in summer as a result of the issues facing the gas and electricity markets.