Anti-gas activists delight in claiming that rising gas prices in Australia are a result of some kind of conspiracy by gas companies to lift profits.
There is absolutely no substance to the claims, as has been confirmed by no less an authority than the regulator charged with policing any such activity, the Australian Consumer and Competition Commission.
ACCC chairman Rod Sims has gone so far as to describe these price conspiracy claims as “strange”.
But being dismissed by a genuine authority of repute and analytical capability does not deter purveyors of unsubstantiated claims such as The Australian Institute (TAI) and the Institute for Energy Economics and Financial Analysis (IEEFA), both of which try to maintain a veneer of impartiality but in fact are an extension of the enviro-activist movement.
In his latest misstatement, published online by News Limited, IEEFA analyst Bruce Robertson repeats the price conspiracy theory disregarded by serious analysts and dismissed by the chairman of the ACCC.
Not happy with that, Mr Robertson adds another spurious claim, that a solution to this situation would be to ‘regain’ control of the price of gas.
“Prices are too high in Australia because we have given away the ability to control the price — it’s killing the Australian domestic economy,” Mr Robertson said.
To set Mr Robertson straight, the price has not been regulated, and for decades Australian consumers and businesses have had some of the cheapest gas in the world, giving thousands of manufacturing businesses a significant edge over offshore competitors, including the USA.
This situation has now flipped because supply in Australia is tight, compared to countries such as the USA, where supply is plentiful, reliable and cheap. Manufacturing is now leaving Australia and moving to the USA, not because they want to, but in order to regain their lost certainty of affordable supply.
And the reason the worm has turned? Supply is the key, not some cooked-up price conspiracy.
Any economist worth his/her salt knows supply is a kewy determinant of price. In the USA they have rapidly escalated supply by developing onshore natural gas resources. In Australia we have gone the other way, allowing perceived political gain to get in the way of safe resource development and stifle supply – with the very notable exception of Queensland.
Having refused to buckle to enviro-activist scare-tactics, Queensland now has a burgeoning and highly successful liquid natural gas (LNG) export industry earning a whopping $30 billion of important national export income in its first year of operation.
In addition to being a major plus for the national economy (not mentioned by Mr Robertson), this new industry will earn hundreds of millions a year in royalties for the Queensland Government.
This is the Queensland coal-seam gas converted to LNG industry which has some similarities to the USA shale gas revolution which has simultaneously revitalised the economy and driven significant reductions in carbon emissions (as the gas displaces coal-fired power generation).
While they have reaped the jobs and economic activity benefits, neither Queensland nor the USA, has suffered the environmental Armageddon predicted by Gasland, Frackman, Lock The Gate or any of the other activist groups which have popped up, supported by Government subsidies and tax benefits as well as money from US donor funds intent on a rapid shut down of the non-renewable energy sector, no matter what the social impact.
TAI and IEEFA are two such organisations – dependant on money from the environmental and renewable energy lobbies working hard to clear a path to the mythtopia of 100% renewable energy, right now.
The reality is such a move would mean shocking social upheaval and loss of living standards.
As the Federal Government, manufacturers, food producers, the gas industry and the ACCC have all emphatically stated: we need more supply, not the illogical development blockers in place in a number of States. Our businesses and consumers should not be forced to pay the price for political expediency.