Jan 11, 2017

The profits ‘earned’ by Australia’s gas industry will make you wince

Business journalist Michael West and analyst Bruce Robertson expose the profound failure of government energy regulation and demonstrate how our loss, as consumers, matches the gains of the power companies.

Li Ka-shing

Li Ka-shing

Spiralling power bills have made energy poverty a grave issue in Australia. Indeed, the entire economy is hostage to rising energy costs. Yet there are a handful of big winners: multinationals, local power giants and an Asian tycoon. Incredibly, despite the doubling in electricity prices over the past seven years, and massive profits for the networks, the gas pipeline players have forged even richer returns at the expense of customers.

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11 thoughts on “The profits ‘earned’ by Australia’s gas industry will make you wince

  1. Andrew Malzard

    Surely it’s time we looked at a new paradigm for raising a fair share of money from resources that belong to the Australian people. The combination of royalties and taxes don’t work as multinationals exploit all the loopholes. Instead of the old method of raising revenue, why can’t payment be by a fixed amount of gas per unit extracted. It would be difficult for companies to hide how much they extract. You only have to note the ships carrying our gas away to other shores to see how much of the stuff is extracted. The returns could be based on the variable costs of producing the gas additional to that sold at the market price. Most of the costs for the exploiters is in exploration and initial infrastructure. Once that is completed there are only the variable costs for keeping the operating. This might even be a method more acceptable to the companies for paying their dues. We could even shave off a percentage of the actual gas produced. This could then be used to provide the base load power for our energy sector. Imagine, Australia could quickly become one of the cleanest producers of energy AND one of the cheapest. The rewards would be shared by all Australians and Industry. The major oil producing countries obviously don’t pay world market prices to fuel their transport needs. You only have to look at the bowser price of fuel in middle eastern countries to see that everyone in those countries benefit from the oil extracted. If they can do it, why can’t we?

  2. jelbart meredith

    This is very shallow-minded and trivial of me, but is the name seriously Ka-shing?

  3. dennis

    God this is so trivial, how the hell do the journalists expect us to take this all in, we want to hear more about hating Mussies we can take that in and understand it, I will be phoning my pastor and telling him that you would rather write about poor wealthy people making money, that taking on the real issues, like hating, (cause the pastor said God wants us to) those stinking awful freeloading Muslims that take our pensions away, while they live in luxury, write some real news.

    1. bushby jane

      Except this one is Chinese with an ironic name.

  4. zut alors

    ‘This is a report on gamekeeping, written for the poachers not the wildlife.’

    A good summation: it’s why taxpayers/voters/consumers are becoming increasingly disenchanted with governments & corporations. The greed of the wealthy knows no bounds, these exposed figures are testament. If other Western countries regulate pipelines why not here?

  5. Scott Grant

    Do a search for ‘Bolivian Gas War’ and see how the people of another nation reacted to such blatant exploitation of their natural assets. Oddly this was never reported in the Australian media at the time it happened. I remember stumbling across the story on an independent media site at the time it was happening, and searching in vain for any reference in Australian ‘MSM’. Apparently international mega corporations ripping out natural resources while paying minimal taxes or royalties is a story that has no relevance in Australia.

  6. The hood

    I say it’s time to bring back Rex Connor!

  7. Paddy Forsayeth

    Jelbart, you reminded me of an anecdote attributed to Ned Kelly. As it goes Ned was arrested for attacking a Chinese trader which led to his imprisonment and death. The name of the Chinese trader was Ah Fook!

  8. Paddy Forsayeth

    I also read an article recently that Norway took on the gas and oil corporations and insisted that they paid a very large profits tax on the stuff they were extracting from Norway’s country…I think about 36%. Apparently each Norwegian today is worth roughly one million dollars. Their population is about ours. They can all retire! We definitely fucked up the carbon tax.

  9. Roger Clifton

    There is an urgency to find, develop, exploit and close off on gas deposits, before gas becomes categorised as fossil fuel, to be taxed, tariffed and eventually replaced. Take profits soon, as gas must go.

  10. MAC TEZ

    Considering how much recent gas bills have made me wince I knew the figures in this article would do the same and they have.
    Reading today that the feds via Josh Friedandburnt want to push the states to make it easier to extract gas without all those pesky environmental considerations that create so much “uncertainty” for the profit plunderers , I’m not so much wincing as wanting to cry.

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