Energy superidiot unable to make explosives

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For a decade, MB has fought to fix this from behind the keyboard, as well as by offering direct advice to policymakers.

We have had some notable successes inspiring movements from within the parliament but the East Coast gas export cartel has proven to be too strong.

Now its toxic fruit is ripening:

The Australian can reveal that the energy regulator cautioned the industry that the largest supplier of gas storage on the east coast, Lochard Energy’s Iona ­facility in northeast Victoria, could run out of gas before the end of winter.

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The Australian Energy Market Operator told industry and gas users on Thursday that the drawdown from the Iona facility ­needed to be halved from about 400 terajoules a day to an average of 200 to avoid it running dry.

The problem is politicians are so busy featherbedding for themselves that they have never addressed the fundamental issue.

Consumers have been protected from the worst of the fallout by can-kicking policymaking, such as the load-shedding by industry described above. More recently, Labor has added bill subsidies that have reached very large proportions.

Both of these do severe long-term damage to the economy but no politician cares. They just want to hide the problem and then retire to work for the cartel.

Yet Australia is now on the verge of being unable to manufacture explosives:

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Orica is a major supplier of ­explosives to the mining industry but said it might be forced to ­import ammonia for its Kooragang Island manufacturing plant in Newcastle in the next few years if not enough affordable gas was available.

German Morales, Orica’s president for Australia Pacific and sustainability, told The Australian that “there is not enough gas and there is not affordable gas”.

“Clearly if we fail to secure long-term gas at a reasonable market price, we may be put in a position of rethinking what is the manufacturing strategy for ammonia in Australia,” he said.

“The Australian gas price is significantly more expensive than that you can buy in other jurisdictions, such as the US. That’s making it very difficult to justify manufacturing in Australia.”

This is how unbelievable the gas cartel hollowing out has become. A sovereign nation considered by some to be the anchor of the US liberal empire in Asia will soon be unable to manufacture its explosives.

What will it throw at China when the time comes? Caramels?

Reserve 15% of gas exports now.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.