Doubtful experts on the ducted gas plan

The Queensland GNL sector currently sells most of its GNL with long -term contracts for overseas buyers in Asia, but also remains a key supplier for consumers in the internal market of the eastern coast of Australia.

The proposed scheme of gas reserves would force them to retain a specific amount between 50 and 100 petjouule of their gas not counterpoint every year-ability to satisfy 20 % of the demand on the eastern coast. Dutton means that the new gas is sold to $ 10 in Gigajouule, down from today’s price of $ 14 in Gigajouule.

Separately, the coalition is also committed to “tearing” as much red and green ribbon as possible to accelerate new gas perforation projects and to overturn $ 1 billion in new gas pipes and gas storage infrastructures.

Would a national gas booking reduce energy prices?

Dutton said that his plan would provide enough gas at the local level to quickly cut the $ 14 wholesale price in Gigajoule at $ 10.

However, this promise can prove to be demanding, since the cost of gas production in Australia has increased constantly over time since the lower sources have run out. Once the gas could be provided for $ 4 for Gigajoule or not, but, today, the oriental Australian gas fields will have difficulty providing gases for less than double this amount.

In his latest report, the Australian energy market operator has said that the gas produced in new projects in general costs between $ 9.20 and $ 12.50 in Gigajouule per Wellhead – and this is before adding other significant costs, such as the transport of the gas through the gas pipeline where it is necessary. “It is difficult to see how the lowest prices will emerge,” said Macquarie Ian Myles’s energy analyst.

Dutton has also declared that the coalition gas plan would bring lower energy bubbles since the gas is burned to generate electricity in many electrical power plants. However, attention to the gas overlooks the fact that coal, still the source of dominant energy in the network, is a more significant decisive factor in wholesale prices, the experts said. The power bills also consist of other costs, these expenses for the maintenance and enhancement of the transmission network and the retailer’s margins.

What was the reaction?

The proposed booking scheme has aroused an immediate repercussions from the gas industry, which warned that it could discourage the investments themselves in new gas supplies that the coalition says that it is trying to encourage.

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Australian Energy Producers, an industrial group, has defined the proposal as a “harmful market intervention” which would have forced an excess of domestic gas, undermines their ability to sanction new gas perforation projects in Victoria and New South Wales and threaten commercial relationships with long -term GNL buyers.

Others in the sector have described it privately as “overcoming”, “populist politics” and a “patch solution” which would damage the functioning of the gas market and discourage the GNL initiatives from the production of gas beyond their minimum contracts.

However, Dutton’s gas plan was welcomed by the main gas users, including companies in the manufacturing sector, which require fuel for energy or as raw material.

“Gas prices higher than $ 10 for Gigajouule are simply unsustainable in a country full of gas such as Australia,” said Ben Eade of production in Australia, whose members include companies such as BlueCope Steel, Brickworks, Cement Australia and CSR. “We congratulate the opposition for committing the price of the gas below this level.”

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