How Australians were robbed of their own gas

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Last month, former independent senator for South Australia, Rex Patrick, published an explosive report at MichaelWest.com.au explaining how the federal government and the Administrative Appeals Tribunal (AAT) had blocked a gas reservation options paper finalised in the dying days of the former Coalition government.

gas reservation options paper

The primary reason why this options paper was blocked is because it could upset Australia’s major export customers in Asia:

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“The effect of the government’s successful claim in the AAT is that Australians are not allowed to engage in domestic policy debate because it might offend the Japanese”, noted Rex Patrick.

“As Australians struggle to pay rent and buy groceries, our government is denying informed debate on a major cost-of-living remedy”.

“Wicked is a word that springs to mind”.

The decision to block the options paper came as Japan (and China) is receiving more gas than it needs and is on-selling to other countries about 30mt of LNG per annum, which is roughly 1600Pj:

Meanwhile, Australia’s East Coast only needs around 200Pj of extra gas to solve all our energy problems.

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Rex Patrick has followed up with another stunning report at MichaelWest.com.au, which is based on FOI requests received from the government. It explains how the federal Department of Industry, Science and Resources (now DCCEEW) has been captured by the gas cartel and is actively working against Australians.

First, it is revealed that the Department acknowledged in the options paper that a domestic gas reservation policy was “a way to push producers towards offering longer term, lower cost supply contracts”. In turn, reservation would “put downward pressure on domestic gas prices”, an obvious win for Australians:

Gas FOI 1
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However, gas producers obviously oppose domestic reservation.

The Department opposed gas reservation because it would ultimately cause a lack of investment in gas exploration. In doing so, it ignored the fact that Western Australia’s reservation has not deterred investment (investment in Western Australia boomed following reservation), nor has reservation deterred investment in the USA (the world’s largest gas exporter) or Qatar (the world’s equal second largest gas exporter, alongside Australia).

Instead, the Department cherry picked Peru as a reason not to reserve gas domestically:

Gas FOI 2
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Here, the Department swallowed the propaganda of the Australian Petroleum Production and Exploration Association (APPEA), the lobby group representing over 200 oil and gas explorers and producers.

The Department’s bureaucrats advised the minister that, “Gas reservation acts as a tax on gas production, paid as a subsidy to domestic gas users”, as though their first priority wasn’t Australians:

Gas FOI 3
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The traitors at the Department then had the gall to argue against domestic gas reservation on the grounds that it would create energy security uncertainty for our trading partners (such as Japan and China, who have been caught re-selling our gas for profit at the expense of cheap gas and electricity in Australia).

The Department, therefore, explicitly recommended against domestic gas reservation:

Gas FOI 4

The Department even attacked the Australian Energy Market Operator (AEMO) for daring to forecast gas supply to ensure Australians have enough energy:

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Gas FOI 5

Rex Patrick concludes by stating that the Department is “wrong” and that “Australians are suffering for their betrayal”:

“Australian Government bureaucrats and Ministers in the Morrison and Albanese Governments have very deliberately decided that the interests of the gas cartel and their foreign customers, mainly big energy corporations in Japan and South Korea, sit ahead of Australian consumers”.

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“Cormann and Canavan were prepared to look at options, but their Prime Minister and the Coalition Government decided to put foreign interests first. They did so because they were in the thrall of the gas cartel and feared a corporate and diplomatic backlash”.

“And that decision has been carried on by the Albanese Government, with the Prime Minister and Resources Minister Madeleine King bending over backwards to reassure Japanese and Korean Governments and corporate interests that Australia won’t give any thought to limiting gas exports”.

“Time and time again, Albanese and King have repeated the mantra to the gas lobby, as well as audiences in Tokyo and Seoul, that Australia will always be “a reliable energy partner” – which is code for, “don’t worry, we’re going to put foreign interests first”.

“This is a deliberate policy and political choice that has been made and maintained by both the Coalition and Labor Governments”.

It is well worth reading Rex Patrick’s report in full as it is eye-opening and disturbing.

Rex Patrick is a patriot who continues to fight for domestic gas reservation, even after exiting politics.

By contrast, our federal government and bureaucrats are traitors who have put the interests of Asian gas customers (most notably China which takes three-quarters of it and they will not even mention) ahead of their constituents, the Australian people.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.