Allan presents some actual facts to counter AFR's 'alternative facts'

Northcote’s Allan O’Neil has written in response to an Australian Financial Review Editorial and although the letter was published online it was thought to too late for publication in the AFR’s hard copy.

Alan wrote:

The Weekend AFR’s editorial on our “energy crisis” has bought hook, line and sinker some very convenient untruths. It blames the tightness of the domestic gas market solely on moratoria imposed by the Victorian, NSW and NT governments and then in the next sentence blames problems in the electricity market on “ever-larger volumes of intermittent renewables being fed into the grid with incentives provided by the same governments”.

The only material financial subsidy for new large scale renewable generation over the past decade and a half has been the Federal Government’s Renewable Energy Target, in place since 2000. None of the State/Territory governments mentioned has operated any scheme providing similar subsidies.

As for the tightness in the gas market, your editorial also claims that “the gas feeding the Gladstone LNG plants was developed against the prices and volumes it could fetch on international markets”. This might be true if the only gas feeding those projects was sourced from the Queensland coal seam gas (CSG) fields developed by the project proponents to back their capacity investment in the Gladstone LNG facilities. However it is widely known in the industry that those new CSG developments have been slower and higher in cost to develop than assumed, and that the LNG consortia, caught short for supply, have been sourcing significant volumes from already developed gasfields across the south-eastern states that had previously been supplying only domestic users.

The Gladstone LNG facility.

The impact of state government gas moratoria has been at most marginal, given the relative volumes of previously “domestic” gas hoovered up by the LNG consortia, and any new gas which might now have been available from fields developed in the absence of those moratoria. In Queensland, Shell and PetroChina hold a reported 9,000 PJ of already discovered but undeveloped gas not subject to any moratorium. To argue that a cheaper way to relieve pressure on gas supply would be to explore for, assess, develop, process and transport currently undiscovered gas in less prospective regions like onshore Victoria, in preference to large already discovered resources like Shell’s, seems completely fanciful.

The real “problem” in the gas market therefore seems to be the (un)readiness of domestic users to pay the same prices that the LNG consortia have been prepared to pay in order to fill their supply gap.

The real problem in the electricity market has of course been the partisan craziness, ideology, and blame-gaming that has characterised climate-change policy at Federal level for the last decade, and shows few signs of abating. Editorials like the AFR’s, based less on facts and more on “fake truths”, don’t help any of this.