<
https://www.theguardian.com/commentisfree/2025/jul/02/an-impending-gas-shortfall-in-eastern-australia-this-is-just-gas-market-groundhog-day>
"The Australian Competition and Consumer Commission is yet again warning of
imminent gas shortfalls for Australia’s east coast. In response, the federal
government has announced another review into whether we need to reform our gas
market regulation.
Given the ACCC has been running a gas market inquiry since 2017 and has been
saying pretty much the same thing every year since – essentially that gas
producers treat Australian consumers like second class citizens – isn’t the
answer blindingly obvious?
For the past few years, the gas market has been stuck in Groundhog Day. Each
year the gas producers tell us that the only problem is slow government
approvals for new developments. Interestingly governments have approved many
new gas developments, for example Santos’ Narrabri gas field was approved in
2020 but is yet to proceed.
Yet each year we find ourselves in the predicament of imminent shortfalls. Then
the government steps in to “negotiate” (or is it beg?) for the gas producers to
pretty please provide some extra gas to domestic consumers at a price that
won’t cripple them. In response the gas companies miraculously find some extra
gas under the couch and dribble out a little bit more, but not too much that it
might noticeably reduce prices.
Some gas producers appear to be engaged in a phenomenon so well known to
economists they’ve invented a term for it: “strategic withholding”. This is
where a producer knows that if they pull back a bit on production then they can
force up prices enough that it will increase their overall long-term profits.
So, the government can grant permission to exploit extra gas fields, but that
doesn’t mean a producer will give us extra gas if it will reduce prices.
The Victorian government proposed that in order to assist manufacturers
desperate for gas, it would free up gas supply for them by switching households
away from gas appliances to electric-powered ones. This would not only assist
manufacturers, it would also leave households financially better off.
Independent analysis by the Institute of Energy Economics and Financial
Analysis found it would save households $6.3bn on their energy bills over 10
years, compared with an extra cost of new appliances of $3.5bn. Not to mention
it would substantially reduce carbon emissions.
The counterattack from the oil and gas lobby was vociferous."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
