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.

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