The current gas price crisis faced by Eastern Australia is the direct result of the export market exposing the Australian gas market to volatile international gas prices.
Australia Institute research shows that there is no gas supply problem in Eastern Australia, with the amount of gas consumed by Australian households and industry dwarfed by the amount of gas produced for export.
“For Santos boss Kevin Gallagher to blame a decade of ‘moratoriums, shutdowns and lockouts’ plays the Australian public for fools. The current gas price crisis is a direct result of the gas industry’s own profit chasing,” said Mark Ogge, principal advisor at the Australia Institute.
“Australia does not have a gas supply problem; it has a gas export problem. 80% of Australia’s gas is exported. The idea that there is a gas shortage is a joke, but the only ones laughing are gas executives – all the way to the bank.
“Australia’s gas price crisis is fuelled by gas executives who would rather make more profits from international exports than provide affordable gas to Australian households struggling with the cost of living,” said Mr Ogge.
“When it comes to hot air, Santos has form.
“Internal Santos documents provided to shareholders show Santos have a deliberate strategy of linking domestic gas reserves to export prices, in order to be able to charge domestic customers globally linked prices. This strategy is playing out now. Yet when Santos was seeking approval for its GLNG project, it told the QLD Government that the project would have no direct implications for domestic gas prices.
“Allowing gas and coal multinationals to export vast quantities of Australian resources has only served to lock Australian consumers into exposure to volatile global prices.
“Opening up more gas reserves for gas companies to drill, will simply allow gas companies to export more Australian gas. Gas companies are already making huge windfall profits, with no regard for Australian households or the climate.
“As a matter of urgency, the new Government should work to implement a windfall profits tax on gas exporters like Santos to help compensate Australian households and businesses.
“In the medium term, this Government should look to do everything possible to speed up electrification, helping households get off expensive gas. This would not only save households from skyrocketing energy bills, but free up gas resources for industries that will take longer to transition.
“The previous Government has left Australia’s energy policy in a mess. After a lost decade propping up the gas and coal industry, the only long-term solution to expensive fossil fuels is to get off them and that requires political leadership.”