Patriotism is the last refuge of the
scoundrel, observed Samuel Johnson. And it’s not bad for naked self-interest
either. Just ask Alcoa.

Oz energy writer Nigel Wilson
reports the world’s biggest aluminium company wants the West Australian
government to reserve 15 to 20% of all offshore gas fields for domestic
use because “there is a material risk that, in the absence of near-term
government intervention, the availability of gas will be constrained and the
price of gas significantly increased”.

No, Alcoa isn’t really concerned about
security of supply – it just wants the government to force gas
producers to
subsidise the price of producing alumina at its three WA plants.
Reserving 15% of offshore gas for domestic use simply means WA would be
awash in very
cheap gas bearing no relationship to international prices – and that’s
just
what Alcoa wants. Very cheap gas means very cheap electricity which is
what
Alcoa is all about.

It’s only a slight change from getting
state governments to just subsidise electricity prices outright – the result is
the same.

Australia enjoys very cheap energy.
Our extremely cheap coal helps keep down what domestic gas producers try
to get paid. Those gas producers lacking the scale required for LNG operations
look longingly at foreign markets and their much higher prices. And now Alcoa,
for its own self-interest, wants the gas exporters to feel some of the same
pain.

The danger is that some populist state government
might go along with it.

Peter Fray

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