Gas bills set to surge

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Sydney residents are set to pay another $250 per year for household gas as the cost of Australian local gas rises.


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commented 2015-11-02 21:16:11 +1100

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Audrey Ackman
commented 2014-12-08 20:30:51 +1100
Would like folks to read this which is pasted from an email reply I sent to McArdle ( our glorious and wise energy minister) This has been the 3rd or 4th email I’ve sent trying to get straight answers for! Please read….

Thank you for the extra information offered on the subject.

Unfortunately it still does not address the concerns on the subject of minister McArdle’s department using only studies and reports which are offered by the energy companies and their various associations etc. and does not address concerns that doing so appears to be bias in consideration and very narrow in scope. This is due to the fact that the recourses sector stands to gain massive profits from exports, regardless of a DGR policy as is the case in WA. The recommendation by the ERAWA is based on (once again) reports and studies sponsored by the recourse sector and calling such studies “independent” is a furphy. Of course such studies will argue against a DGR policy in that state (or any other), because they won’t make as much profit otherwise, now will they?! In addition to this, Australia’s domestic gas market as a whole, is tiny in comparison to the export market (as I’ve already stated) with which it will be supplying the majority of it’s gas to!

You make the statement that most credible independent industry experts argue laws that dictate where and how gas can be sold will inevitably deter the very investment needed to develop Australia’s abundant gas reserves. “most” does not equate to “all” and these “independent experts” are (as the wording states) “industry” experts. These so-called experts and their various reports, all fail to mention that the investments in the gas industry are a direct result of a forecast growth in export market availability. Thus, a DGR will have negligible impact on such investments and the outcomes!

With specific regard to VIC and NSW policies, those states have many other problems with their respective policies which are not only due to a DGR policy. As you have stated yourself, there are other circumstances at play there namely green tape etc. Which is not the issue I raise on this subject. Subsequently this should be discounted when answering my queries as the southern states do not stand in the same context as QLD.

WA stands to increase revenue from it’s own gas reserves (which are mainly offshore) regardless of it’s DGR policy. And this is solely due to the export market it will be supplying in the coming years and has invested accordingly as a consequence. This is also the same for QLD. How can you honestly say to anyone that, the investment in QLD’s gas industry (Gladstone Port as an example) has been due to anything other than the anticipated export supply market!? So I will ask again…

How is it that your dept. can use a myriad of recourse company’s reports only, in an argument against implementing a DGR in light of all other non recourse sector reports which show it not necessarily a negative thing to have a DGR?!

Also, you haven’t addressed the issue of…

How is it any concern of the recourses industry how other industries use it’s gas!? If those industries choose to be inefficient (as one of the reports you offered suggests) this will only create more demand thus more supply, adding to the equation.

I’m sorry, but not a great deal washes well with the thinking voter when it comes to this subject, how the QLD Govt. is approaching it and, you guys are not doing a good job of explaining things in a positive light. We can see how VIC and NSW have caused their problems and it is not mainly to do with a DGR policy at all ! It does seem that this issue should be dealt with at a Federal level as it appears the only states who have a reasonable idea is WA and SA who seem to be ignoring such resource sector bias reports just as all other gas producing countries have done!

DGR policies throughout these countries has not hurt their supplies so why is it that our so-called representatives (politicians) seem to be pandering to the big company’s ideals without any consideration for the other side of the argument?

How is it good to say that massive increases in domestic gas prices is good for our economy and global competitiveness when it simply does not ring true?

Why is it DGR works everywhere else but won’t (apparently) work here?

Is there a vested interest to be seen by the voting public, in all of this?

Kind regards

Tony Bowater.

PS. Just to be absolutely clear, I and my associates are of no political persuasion and have also sent queries to many other political entities on this subject. And I would like to mention there has been no response thus far from any of them. If this is of any interest to the minister.

And to be clear, below are the questions I posed in my last email. Perhaps they may help the answers if they’re included…

Why has minister McArdle considered only the various reports,studies and reviews which have been commissioned by some part of the petroleum industry who argue AGAINST a DGR policy?!

Why has the minister not considered any of the other reports, studies and reviews from various other sectors of our economy which argue FOR a Domestic Gas Reserve policy?!

Why has the minister not taken into consideration, the detrimental outcomes that have occurred in the past several decades in places there has been no Domestic Reserve policy on resources?!

Why does the minister consider that massive gas price rises will be a good thing for our own domestic economy when all the petroleum industry reports actually admit this will occur ?!

Sent: Monday, December 08, 2014 11:10 AM
Subject: CTS28584/14 Correspondence from the Office of the Minister for Energy and Water Supply

Ref: EWS 008615 / CTS 28584/14

To: Mr Tony Bowater

Dear Mr Bowater

Re: Domestic Gas Reservation

Thank you for your email of 26 October 2014 regarding the Australian Petroleum Production and Exploration Association’s (APPEA) report on the subject of domestic gas reservation

Queensland’s gas industry is delivering substantial state-wide benefits, such as investment, jobs and regional development. The Liquefied Natural Gas (LNG) industry is going to help ensure that Queensland becomes the economic powerhouse of the nation over the next five years and the Government is committed to ensuring sufficient gas volumes are available to supply all Queensland customers as well as to support LNG exports. In this regard, our gas market policy has been developed to implement the two principles of ensuring supply responds flexibly to market conditions and promoting market development. Initiatives to facilitate a supply side response include provision of pre-competitive geoscience information and the development and implementation of the Multiple Land Use Framework, while current market development priorities include measures to enhance gas transmission pipeline capacity trading and redevelopment of the National Gas Market Bulletin Board to improve transparency and access to relevant information.

Queenslanders will long benefit from the significant employment and economic benefits that come from a Coal Seam Gas (CSG) industry that operates within a strong regulatory framework. That is why the Newman Government facilitated the growth of the state’s gas industry by creating the Gasfields Commission, which has worked directly with landholders to help demonstrate the benefits of the CSG industry. In this regard, Queensland is now on track to increase gas production from around 200 petajoules per annum in 2008 to 2,000 petajoules per annum when exports are in full swing in 2016-17.

While Queensland and all other states are generally well aligned in respect of the COAG Energy Council’s reform agenda for gas supply, the moratorium on all onshore gas development in Victoria and the introduction of the Strategic Regional Land Use Policy in New South Wales (NSW) have stymied gas resource development in those states. This is because unlike the Queensland Government, other states have pandered to the Greens and other minority interests instead of facilitating a better way for the gas industry to coexist with landowners. It is increasingly obvious that this now presents as an emerging problem for those states, as their gas prices and availability is forecast to tighten up over the next couple of years. Perversely, those that helped create this growing supply problem in NSW now seemingly want to be insulated from the impact of their decisions.

With specific regard to considering a domestic gas reservation policy, most credible independent industry experts argue laws that dictate where and how gas can be sold will inevitably deter the very investment needed to develop Australia’s abundant gas reserves. For example, the International Energy Agency recently released a report confirming that interfering in gas markets deters investment in exploration and production (IEA’s Gas Medium‑Term Market Report 2014). And, with specific regard to the gas reservation policy in Western Australia, the Economic Regulation Authority of Western Australia (ERAWA) recently recommended this policy should be rescinded as soon as possible because there was no economic justification for Government intervention in the domestic market.

The Minister recognises there are growing concerns about the availability and price of gas down south, the implementation of a gas reservation policy is not in Queensland’s best interests because it will discourage exploration and investment and lead to inefficient supply and higher prices over the long-term. Put simply, the best long-term solution for gas supply in the Eastern Australian gas market is for all jurisdictions to adopt exploration and development policies that enable the growth of supply to meet demand without distorting the market.

I hope the information I have provided has been useful.

Yours sincerely

CrestFrancis Quinlivan

Chief of Staff

Office of the Hon. Mark McArdle MP | Minister for Energy & Water Supply

Phone: 07 3719 7140 | Fax: 07 3220 6233

Mineral House | 41 George Street | Brisbane | QLD 4000

PO Box 15456 | City East | Brisbane | QLD 4002