Companies

Feb 26, 2014

Gas shortage? Tapping the bubbling wells of spin and self-interest

Australia's not on the brink of a gas shortage -- but the industry is running out of new ways to spin. In part one of a Crikey investigation, we debunk the self-interested case of suppliers and governments.

Paddy Manning

Crikey business editor

New South Wales is about to run out of gas, so says the scare campaign. It’s bully-boy tactics by Australia’s powerful oil and gas industry, designed to pressure the state government into quickly approving contentious coal seam gas projects proposed by Santos at Narrabri and AGL at Gloucester.

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7 thoughts on “Gas shortage? Tapping the bubbling wells of spin and self-interest

  1. JohnB

    Quite an education. Thanks.

  2. klewso

    Macfarlane another “prevaricator for political effect” but still a prevaricator.

  3. MJPC

    Thank you Paddy for filling in the blanks in this environmental disaster in the offing. We look forward to the inflammable water and destruction of water resources in the areas; environmental vandalism!
    As for Reith and Ferguson; no two greater corporate whores could be found on either side of the political divide.
    Reith’s comments in the SMH says it all. When speaking of Alan Jones support for the anti-CSG forces “He (Jones) supported me and Chris Corrigan over the waterfront dispute and he has been a strong voice for many good causes”, what, like the waterfront dispute? What a tosser!

  4. leon knight

    Paddy – how about delving into what royalties and taxes Australia will get from this gas bonanza/disaster…seems like the big players will make a mozza from these export contracts and aussie tax-payers will get close to zilch while the country is plundered.
    Agree with MJPC on Reith and Ferguson, although Ferguson is a newcomer, Reith is an old hand. I despise Jones, but at least on the CSG front he has some value as a human being.

  5. Mardon Chris

    In comparing the value of alternative sources of gas, it is important to use the NET cost! There is no way that CSG producers will be paid anything like the price of $14-15/GJ suggested above. After subtracting the gas used for processing and the billions of dollars of capital needed to build the LNG processing plant, the net value of the raw gas supplied to the plant (known as ‘netback’) is typically $1/GJ or less.

    Also, the cost of producing CSG (or more especially shale gas) is more than the cost of producing conventional natural gas. Hence the profit depends on the difference between the ‘netback’ and the production cost. There has been so much hype about US shale gas, but that is not ‘cheap’ unless it is associated with oil or condensate. The US gas glut has reduced the value of the gas to such an extent that dry gas wells (containing no associated liquids) are being shut in because they are uneconomic.

  6. AR

    If anyone is (still) interested in ancient history, have a look at Iran under Mossadeq. The Iranians were, in the early 1950s, paying more for petrol, gas & diesel than british consumers, despite all of it coming from beneath their sands.
    The first attempt at a proto-OPEC was subsumed by CIA/MI6 subversion which brought forth the puppet who became known as Reza Palahvi (aka the Shit of Iran)and really became the initiator (for reasons that are another story entirely) of the akshal OPEC so beloved of the 1970s.
    So what, are we about to become yet another satrap of the Hegemon, selling our lifeblood howsoever it suits the megacorps?
    yeh, probably.

  7. Katherine Marchment

    There may be no gas shortage but politicians of all major parties are still doing everything they can to ram the CSG industry down our throats – whether it be by media spin, ineffectual environmental policing, legislation that favours miners over land holders, harsher laws for protesters. The question is WHY when this is unquestionably a toxic industry that puts the lives of our children and grandchildren at risk as well as our water systems and agricultural land. As shown from the American and Queensland experience, complaints of contamination are in the thousands and growing daily and more and more science is coming to light proving the industry is unsafe.I have yet to view in my lengthy internet searches any science that proves that the industry is safe as stated by Peter Reith et al. Even economists such as Deborah Rogers and Ross Gittens have exposed the folly of this industry. A ten minute search of the internet is enough to convince most people that this industry is a bad idea in this country and that its supposed benefits (jobs, royalties) have been grossly exaggerated. So WHY are our governments both state and Federal under both Liberal and Labor pushing to “fast track” the CSG industry in this country? Is it because our own governments have heavily invested in the CSG industry and stupidly signed forward contracts for export that will bankrupt the country if we break them; based on overstated recoverable reserves given to them by big oil and gas? (They could have done a little research into the American experience before signing, but no, that would have been prudent – not something our self important pollies are renowned for). Are we going to have a gas shortage because domestic gas supplies will have to be used to fulfill forward export contracts that go how far into the future? Just how much are we in for if we break these contracts? What are our politicians personal investments in the CSG industry? How much do these people stand to lose personally if it is banned in this country as in France? Just how much of their clients money has the NSW Trustee and Guardian invested in the CSG industry? What will happen to their clients whose capital and incomes are managed by the NSW Trustee and Guardian if the industry is banned? Personally I would rather go bankrupt than engage in an activity which risks killing my children and grandchildren as it is possible to recover from bankruptsy – but from permenently contaminated land and water? Maybe like me, fighting this CSG scurge in Australia, the politicians and CSG company CEO’s are also fighting for their lives. Without money, I am still loved, can still work, can still get a feed and a bed all over Australia from said loved ones or just grow/kill my own food. I could ride it out and eventually work my way up again. But who is Gina Reinhardt without money – does she have the skills to fend for herself? Would anyone open their hearts and homes to her? Would anyone piss on her if she was on fire? Like us however she will be affected by climate change and the toxic results of her industry as will her kids and grandkids. If she goes bankrupt the rest of us will be OK but she will die a bad death. Unfortunately she is being propped up by our pollies right up to our Prime Minister so when she goes down, she is going to take the rest of us with her.

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