Who’s to blame for rising energy costs?
STRAP yourselves in: this one is all about energy with some reference to my gas bills.
When I first moved to Toowoomba I was keen to get the gas connected. I had heard it was cheap, reliable, natural and great to cook on. And so it was for quite some time.
Now, I’m not a big picture person when it comes to our national energy market, but I spotted some changes on the horizon and a few years back decided to drastically reduce my family’s domestic gas use.
So our household has gone from using an average of 1331.5 megajoules per quarter in 2012/ 2013 to an average of 236.25 megajoules per quarter in 2016/2017. In other words, we have reduced our usage of gas by 82 per cent per quarter.
However, during the same period our bills have remained pretty much the same. So we are using one fifth as much gas but paying the same price for it.
In our most recent bill we used $11.07 worth of gas for the quarter and paid $111.37 as part of a supply charge.
When I asked the polite lady at the gas company’s call centre what the supply charge was for, she told me that’s what it costs to maintain the infrastructure to get those $11 worth of megajoules to my home.
Now, something’s happening here. We can’t blame the carbon tax any more and incidentally the $3.84 returned to me in the December 2014 bill hasn’t stopped the price hike.
And it’s not just my household hurting. Electricity generators and manufacturers are being charged close to three times the price they once were.
My understanding is that this massive increase is due to our domestic market being linked to the international market.
With the massive increase in the export of unconventional gas, the domestic price has almost tripled at the same time.
This will hurt your electricity bill as much as your gas bill.
So the companies get two bites of the cherry. They make money exporting for a high price and then can charge the domestic customer much more than they ever did.
Historically, as a nation, we have never pulled more gas out of the ground, yet we have a gas crisis.
Quoting Samuel Coleridge, “Water water everywhere, but not a drop to drink”.
Then who is to blame? We could blame the governments, both state and federal, who allowed this to happen.
Why was no thought ever given to a reserve amount of gas to be kept for domestic consumption?
We could blame the free market for failing to put Australian industry and households first.
We could blame the global gas companies for being greedy.
Or we could blame the recalcitrant state governments who have put a moratorium on unconventional gas exploration and production and those pesky farmers and greenies who want to lock the gate.
Former Member for Groom, the longest serving Industry and Resource Minister, and now Chief Executive of the Queensland Resources Council, Ian Macfarlane, has no doubt who is to blame.
He even argued that these state government, greenie-backed, misguided farmers had fallen victim to “fake news” in an interview on ABC radio last week.
Building on that logic, one presumes that Canada, Germany, Wales, Scotland, France and a number of US states have also fallen prey to “fake news”.
One of these groups obviously listening to this so called “fake news” is the Victorian Farmers Federation (VFF).
Speaking in favour of a state based moratorium, VFF president David Jochinke stated, “Victoria has precious groundwater reserves and because the true environmental impact of onshore gas mining is still unknown, it would be reckless to put those reserves at risk without hard scientific evidence that shows the risks of onshore gas development can be properly managed.”
Even if Prime Minister Turnbull can force the gas companies to ensure supply to keep the lights on, it will do nothing to the cost of power or gas for the householder.
It is not unreasonable for organisations such as the Victorian Farmers Federation to uphold the precautionary principle.
If we get this wrong the long-term cost will be much higher than my little gas bill.
GOING UP: Graphs based on my recent bills showing lower gas usage and increasing prices.