Next time you go to Europe for a holiday, or your child jets out to the same for a gap year, make sure you pick up a few million tonnes of LNG.
Right now you can get Aussie gas for $11.80Gj. In Asia, it is still closer to $14Gj:
When you get home, you can sell the same gas for $30Gj.
In short, Australian gas in Europe is trading under Albo’s ruined $12Gj gas price cap while gas in Sydney is trading 250% above it.
Why? Did Russia just invade Australia?
No. It is because the east coast gas cartel of Santos, Woodside, and Origin (plus foreign friends) are strangling supply to the local market while they disgorge enormous volumes into a global market that does not need nor want it.
This has created a hilarious situation in which it is roughly 60% cheaper for Aussies to buy gas in Europe that has been…
- dug up in QLD for $1
- frozen to a liquid at great expense
- shipped to Europe over ten weeks at great expense
- sailed in circles for a few more months at great expense
- shipped back to NSW for another ten weeks at great expense
- unfrozen and then piped at great expense…
…than it is to buy the same original $1Gj QLD gas and pipe it directly to NSW in two days.
Readers will know that I have spent the better part of a decade predicting these outcomes yet even I can only laugh at the sheer fucktardery of this.
Needless to say, it gets worse. So much worse.
Gas sets the price of electricity in both Australia and Europe. European electricity prices are currently averaging about $100MW/h:
Australian electricity prices are well over double that at $224MW/h:
This is about the only thing in this story that does make sense given the gas price disparity.
If this situation is not resolved then Australia will have a 4% CPI energy shock over the next year and the RBA will take the cash rate well north of 5% to crash house prices so that the gas cartel gouge fits within the central bank’s 2-3% inflation target.
At the recent gas lobby conference in Adelaide, there was lots of discussion about the wildly successful mining campaign to wreck Rudd’s Resource Super Profits Tax in 2011.
Likewise, it’s pretty obvious that today’s east coast gas price hikes are part of a deliberate strategy by the cartel to either break the emerging gas regulation regime or unseat the Albanese Government.
Whether it is explicit or implicit, the gas cartel is colluding with Opposition Leader Peter Dutton and media mates like the Australian Financial Review to achieve it.
