Sitting on an abundance of liquified natural gas (LNG) reserves, it’s hard to imagine that Australians are the victims of soaring gas prices or as recently reported, gas shortages.
But believe it or not, some people in parts of the world such as Asia and Europe, are getting Australian gas at a cheaper price than people actually living in Australia.
Despite claims regarding the introduction of the sustainable and renewable energy market, Australia’s gas prices are rising due to the country’s commitment and deals with external markets.
In 2016, the Guardian reported that Australian gas was being shipped and sold to wholesale customers in Japan for 40 percent less than it was to Australian customers.
Since May 2016, the wholesale price of gas on Australia’s east coast overtook the price of gas in Japan.
This is despite of the extra costs of liquefying and shipping the gas there.
Australia’s commitments in satisfying energy markets abroad means fewer companies are selling less gas to the Australian domestic market — as a result both retail and wholesale gas prices have risen sharply.
This is likely to keep pushing electricity prices with it — higher wholesale gas prices increase fuel costs for peak load open cycle gas turbines.
The rise in gas prices exemplifies Australia’s energy oligopoly.
The truth is that lack of competition, greed to move overseas, and cartel-like behaviour is resulting in Australians paying more and more for electricity and gas.
Because of long-term contracts signed by the likes of energy giants: Santos, Shell and Origin, there are obligations to continue exporting to overseas markets — so we can expect a continuous gas price hike, here in Australia.
NAB Business forecasts the annual value of Australian LNG exports to exceed AUD$27 billion in 2017 and approach AUD$35 billion in 2018, overtaking coal as Australia’s largest second largest export.
So despite being the largest gas exporter and potentially having the largest production capacity of gas — we export too much overseas and are on the brink of a gas shortage in some parts of the country?
What do the energy giants and the Australian government have to say?
Apparently — that Australia has a gas shortage due to renewable energy resource-related complications in the market — and that there is need to import LNG back into a country, so blessed with natural gas resources.
It sounds ridiculous, but it’s the truth.
Australian citizens deserve gas at the same price as overseas customers (at the very least), and to be provided with transparency regarding vital decisions from its political leaders and energy tyrants.