Are you having trouble making fracking sense of the gas price? Don’t understand that if we triple our gas production we pay more for energy! Simple answer is it is a case of people on the far queue. The queue being the mantle of ‘world price’, and dismantle of price protection for domestic consumption. In this instance we mean Australian industry and households described as domestic.
It was bemusing to hear the new NSW Energy Minister (in case you did not hear – new premier and new cabinet after the shock resignation of the old, but same party, Mid April 2014) say we need to find more gas to keep prices down after the regulator said we approve 17% increase for gas from 1 July 2014. Bemused because our price is now set at what the world is prepared to pay to keep their industries productive. Therefore the more we produce the more economical it is to export the gas in economies of scale – simple is it not?
Then the Australian Broadcasting Commission (ABC) reported via Stephanie Smail : “The mooted gas price hike in New South Wales has created tensions with Queensland about the future of the coal seam gas industry. The NSW Government wants more information about overseas buyers from Queensland’s fast-growing market. The Queensland Government says that’s not an issue”.
Co2Land org is not so sure, that it is not an issue. The issue is how do we have faith that government is still relevant and capable of making decisions that are patriotic. But wait I hear you say we need to be aware of world trade and economic cooperation (AKA, Economic Participating Agreements, Free Trade etc). But something gets lost in all that: Governments tend to add fees and charges to balance their own end. So even if you agree on the level playing field for border entries (AKA Tariffs), the distribution price can be distorted by subsidies, fee and other charges.
This leads to the next matter. Why do we not have a social protection price for our own gas? We did, but it was not privatised then. So who wins? As we said increasingly, government is making itself irrelevant.
But let us, Co2Land org, propose a new angle for social inclusion and we could engage in for Direct Action (being the new Energy Reduction Fund white paper is released by the Federal Government) on this issue: 1. Do not engage in reverse auctions with no detail yet. 2. Crowd funding future developments. That is correct we the people fund the projects to the tune we expect prices to rise, and then from the interest we charge we pay off the increases when they come. Oh no! A terrible thought, we could tell the Treasurer the idea come from overseas and he will buy it. Imagine it now: We will save you, we are responsible managers etc. Overseas experience says etc. They are doing it as it is proven?
Unfortunately, it is all too true – we do follow others, and despite all the measures not working overseas we are being told to have faith. Again a case of people on the far queue.