Showing posts with label energy. Show all posts
Showing posts with label energy. Show all posts

Thursday, 13 September 2018

Australia has a prime minister who rejects realitiy and embraces idiocy


Scott Morrison with a coal specimen supplied by the Minerals Council of Australia
ABC News, 9 February 2018
During an interview with the ABC 7.30 program on 11 September 2018 Prime Minister & Liberal MP for Cook Scott Morrison declared he is “troubled” by the politics of envy in Australia and has “a very strong view” on what fairness means.

His version of “fairness” is a redefinition far removed from the contents of any dictionary wherein it is usually taken to mean impartial and just treatment or behaviour without favouritism or discrimination.

His expresses his version of fairness as “those that have a go get a go” or “a fair go for those that have a go”– phrases that are inherently judgemental.

It seems that in Morrison's world only individuals who are already capable of helping themselves in some fashion will deserve assistance from others.

Morrison again refused to say why the parliamentary Liberal Party changed leaders and in the interview sought to divorce himself from both the spill process and outcome, as though he wasn’t a participant in those rolling leadership ballots.

But what caught the attention of a numbers of viewers was his response to two questions.

The first response contained Morrison's assertion that he had separated climate/ environment and energy policies and admissions that he was removing climate change targets from future energy policy and was giving no guarantee of future funding for greenhouse gas emissions reduction.
The second involved his belief that there was a need for additional legal protections of religious freedoms when none were being threatened....... 

For Scott Morrison the primary fear of a majority of the Australian population is less important that demonstrating his missionary zeal to institutional Christianity and his unwavering support to the fossil fuel industry. 

Saturday, 1 September 2018

Quote of the Week


“This country would throw itself in the sea if it wasn't already girt by it.”  [Freelance journalist Andrew Stafford’s 17 August 2018 tweeted response to Australian Prime Minister Malcolm Turnbull’s removal of a climate change target from the National Energy Guarantee,


"sitting on the lap of the member for Warringah [Abbott] like a really scary wooden puppet come to life. With the hand of the member for Warringah up his... back. Like Chucky."  [Labor MP for Sydney & Deputy Leader of the Opposition Tanya Plibersek on the subject of Liberal MP for Dickson Peter Dutton, Twitter,  21 August 2018]

Sunday, 12 August 2018

Anthropomorphic Global Warming in Australia 2018


Australians have been told repeatedly that global warming leading to climate change is real.

The continent is becomng dryer, record air and ground temperatures are no longer novel, heavy rain events are predicted to become more destructive, mass flora and fauna extinctions are expected and the coastline is beginning to erode faster than at the historical rate.

It's not just happenng in Australia, other continents are also experience climate change and, the one factor most have in common is generations of ever increasing greenhouse gas emissions produced by both households and industries in metropolitan, regional and rural areas.

Everyone bears some responsibility for where the world finds itself......


In the first quarter of 2018 Australia’s total greenhouse gas emissions will be over MT 7.3 CO2-e  higher than the national Paris ERT commitment made on our behalf by the Australian Government.

Over one quarter of Australia’s CO2-e budget for 2013 to 2050 has already been spent in the last 4.75 years.

AUSTRALIA’S ANNUAL EMISSIONS, CALENDAR YEAR TO SEPTEMBER 2017*


* This graph includes both published Government NGGI data and Ndevr Environmental projections for Q4/FY2017 and Q1/FY2018

BY  SECTOR 2005-2017
~~~~~~~~~~~

World-wide, land used for non-animal and animal-based agriculture in 2017 was estimated to produce 24% of all global greenhouse gas emissions.


66.3% from enteric fermentation in ruminant livestock (eructation and flatulence)

15.5% from agricultural soils

10.8% from prescribed burning of savannas

3.9% from manure management

2.4% from liming and urea application

and the remainder from rice cultivation and field burning of agricultural residues.

Total greenhouse gas emissions from world-wide food systems in 2012 contributed between 19% to 29% of all global greenhouse gas emissions. By 2030 the combined greenhouse gas emissions from global food production is expected to double.

~~~~~~~~~~~

National Greenhouse and Energy Reporting, Australia’s highest 10 greenhouse gas emitters 2016–17

Thursday, 12 July 2018

Don't expect your residential electricity costs to come down anytime soon


In three years time the amount of revenue electricity network companies can charge customers will be reduced, which according to the Australian Energy Regulator in its Draft Rate of Return Guideline "could [not would] result in household customers’ bills decreasing by around $30 to $40 per year".

Remembering all the other failed assurances that the cost of residentail electricity would come down, it is a brave individual who takes this latest prediction at face value.


The Australian Energy Regulator has moved to significantly cut the amount of revenue electricity network companies can charge customers in a bid to take the pressure off households and businesses enduring high power prices.
AER chair Paula Conboy said it would reduce average household electricity bills by about $30 to $40 a year….

But energy network companies claim the new guidelines will strip about $2 billion in revenue over the next five years and threaten future investment in the energy sector.
Morgan Stanley said the rule, if confirmed, would cut valuations of listed grid owners such as Spark Infrastructure and Ausnet Services, while adding it "could have been worse".

Energy users welcomed the move as a sign the regulator is prioritising the interests of consumers although Energy Consumers of Australia acting head Lynne Gallagher said the proposed reduction in the rate of return able to be earned on capital could have been bigger.

"There is no doubt that there could be some disappointment from some consumer groups with this decision, but it is a much better outcome than we've seen in previous years on this issue," Ms Gallagher said....

AusNet said that if the rule is confirmed, the reductions would apply to its power distribution network from the beginning of 2021, in transmission from April 1 2022 and in gas from January 1 2023. Spark said the rule would apply to its various assets in 2020, 2021 and 2023….

Mr Turnbull is also expected to use his speech in Brisbane to talk on the long-awaited Australian Competition and Consumer Commission into electricity prices which is expected to be released this week. The ACCC report is expected to be used as a reason not to call a royal commission into electricity prices as being pushed by the Greens. 

Australian Competition and Consumer Commission, Restoring electricity affordability & Australia's competitive advantage, 11 July 2018, excerpts:

Australia is facing its most challenging time in electricity markets. High prices and bills have placed enormous strain on household budgets and business viability. The current situation is unacceptable and unsustainable. The approach to policy, regulatory design and promotion of competition in this sector has not worked well for consumers. Indeed, the National Energy Market (NEM) needs to be reset, and this report sets out a plan for doing this…….

There are many causes of the current problems in the electricity market. At all stages of the supply chain decisions have been made over many years by many governments that set the NEM on the wrong course.

In networks, the framework that governs regulation of monopoly infrastructure was loosened, leaving the regulator with limited ability to constrain excess spending by network owners. The limited merits review (LMR) regime allowed network owners to appeal regulatory decisions and recover billions of additional dollars from consumers. It led to significant increases in prices, has drawn out the length of time taken for revenue determinations, and has created significant uncertainty around network pricing. In addition, increased expenditure on networks was driven by reliability standards for some networks that were set too high, without due regard for consumers’ willingness to pay for marginal increases in reliability.

In generation, against ACCC advice, the Queensland and New South Wales (NSW) governments made decisions regarding the operation and ownership of generation assets giving rise to concentrated markets. In Queensland, the government consolidated the generation assets of three businesses into two. In NSW, as one example, both generators owned by Macquarie Generation were sold to AGL, missing an opportunity to deliver a competitive market structure by selling them to separate buyers.

Most state governments put in place excessively generous solar feed-in tariff schemes with a view to encouraging consumers to install solar photovoltaic (PV) systems. Under these schemes, the subsidy paid to consumers for the energy produced by their systems outweighed, by many multiples, the value of that energy. Take up of the schemes exceeded all expectations, in part due to dramatic declines in solar PV installation costs. The substantial cost of the schemes continues to be spread across all electricity users.

The main enduring policy instrument for encouraging low-emissions electricity generation is the Renewable Energy Target. While it has been effective at encouraging wind and solar generation capacity installation, it has also distorted the investment that has occurred in the transition from higher carbon technologies to lower ones. The subsidies received for installing wind and solar made the business case for doing so compelling but did so in a way that was indifferent to the ability to provide energy to the market when demand requires it.

At a time when gas-powered generation has become more important with the exit of large coal-fired plants, the extent of LNG exports from the East Coast and government moratoria on on-shore gas exploration and development have stifled the availability of gas at a low price.

Electricity retailers have also played a major role in poor outcomes for consumers. Retailers have made pricing structures confusing and have developed a practice of discounting which is opaque and not comparable across the market. Standing offers are priced excessively to facilitate this practice, leaving inactive customers paying far more than they need to for electricity. Pay on time discounts, which have emerged as a response to attempts to constrain late payment fees, are excessive and punitive for those customers who fail to pay bills on time. [my yellow highlighting]

Sunday, 3 December 2017

Coal needs to be consigned to the scrap book says former executive director of the United Nations Framework Convention on Climate Change


These issues get reported in mainstream media but are falling on the deaf ears of monumentally ignorant Turnbull Government minsters, senator and MPs.

ABC News, 27 November 2017:

The woman who led the world to a global climate change agreement has a message for Australia: "You really do have to see that we are at the Kodak moment for coal."

Christiana Figueres, until last year the executive director of the United Nations Framework Convention on Climate Change, doesn't mean happy snaps for the family album.

Rather, the decimation of the once dominant photographic company Kodak by digital change — in the same way that coal-fired power is being eclipsed by renewable energy.

She hopes to see coal, like those sentimental moments in time captured in photographs, confined to history — with the world remembering the contribution the fossil fuel has made to human development, while recognising the need to retire it as a fuel source because of its contribution to global warming.

And, she says, it's happening.

"The fact is that we are already seeing the decline of coal, we are seeing more and more countries phasing out of coal," Ms Figueres, who is based in London, told the ABC.

"We just had 25 countries come together [at the latest international climate change talks] in Bonn to say that they are moving out of coal in the short term.

"That does not include Australia or India or China, but you can begin to see the trend…..

Which makes arguments that India needs the coal from Adani's planned mega-mine in North Queensland — and the Federal Government's determination to see the mine ahead — baffling to Ms Figueres.

The Government's Northern Australia Infrastructure Facility, or NAIF, is considering Adani's request for a subsidised loan of up to $1 billion to help it build a railway to connect the Carmichael mine in outback Queensland to the Abbot Point Coal Mine near Mackay, which Adani also owns.

By law, the NAIF is not permitted to make loans for projects that would damage Australia's international reputation.

Earlier this month, Ms Figueres wrote to the NAIF arguing that providing such a loan for a project that would significantly add to greenhouse gas emissions would do just that.

"I wrote to NAIF because I am very concerned about the fact that NAIF could still be considering giving a concessional loan to the Adani Group to allow them to extract profitably from the Carmichael coal mine and transport that coal all the way to the Abbot Point Coal Terminal," Ms Figueres said.

"First of all, it has huge environmental impacts. The more coal we burn, the further away we are going to be from the targets established in the Paris agreement [to keep atmospheric temperature rises well below 2 degrees above pre-industrial levels].

"But also, the more coal we burn around the world, independently of where it is going to be burned, the more negatively we are affecting public health.

"Now we have this issue of the Carmichael coal mine which, if it goes ahead, would frankly blow completely out of the water any emissions reductions that Australia has committed to.

Saturday, 23 September 2017

Quotes of the Week


“Tens of millions of dollars are spent annually on political lobbying for the interests of the fossil fuel sector. That investment serves the interests of a small amount of company shareholders in keeping a legacy industry alive, despite the availability of newer, clean technologies, at lower cost. In the wake of these behind-the-scenes policy negotiations, the real and present impacts of climate change, such as bushfires, coastal flooding and reduced crop yields are left at the door of future generations to deal with.” [Professor Tim Flannery writing in The Guardian, 13 September 2017]

“The main problem bedevilling Australia’s energy sector at the moment is a lack of settled policy to define the investment framework. It means companies like AGL have to guess what regulations they will face in the future.” [Journalist Katherine Murphy writing in The Guardian, 12 September 2017]

“Trump is the most ignorant, offensive president of my lifetime. His rise is a direct result of white supremacy. Period." [ESPN SportsCenter cohost Jemele Hill tweeting about US President Donald Trump on 11 September 2017]

Wednesday, 9 August 2017

This is what privatisation did to Australia's household electricity bills


When three eastern and one southern state formed the National Electricity Market in December 1998 Australia had the lowest retail prices in the world along with the United States and Canada.

The rules which underpin this National Electricity Market are created by the Australian Energy Market Commission (AEMC) set up by the Council of Australian Governments (COAG) - through the COAG Energy Council - for that purpose and to advise federal & state governments on how best to develop energy markets over time.

The Australian Energy Regulator (AER) sets the amount of revenue that network businesses can recover from customers for using networks (electricity poles and wires and gas pipelines) that transport energy.

So far so good. There's a defined market and there are rules.

Then the privatisation of electricity supply and infrastructure began in earnest.

It should come as no surprise that this push towards full privatisation, with its downhill spiral in service delivery and uphill climb in cost to retail customers, began and was progressed during the term of Liberal Prime Minister John Howard.

By 2017 the NSW Berejiklian Coalition Government has almost completed its three-stage privatisation of state power infrastructure by selling off poles and wires and, it goes without saying that the retail cost of electricity is expected to rise again next year.

This is where we stand today……………………

[Graphs in Financial Review, 4 August 2017]
The Financial Review, 4 Augut 2017:

The annual cost to households of accepting a standing offer from one of the big three retailers instead of the best offer in the market has been estimated at $830 in Victoria, $900 in Queensland and $1400-$1500 in NSW and SA by the St Vincent de Paul Society.

Mr Mountain said power bills are constructed in such a complex way that ordinary customers without sophisticated spreadsheet and analytical skills have little hope of analysing competing offers to work out which offers them the best deal.

Private comparison websites do not include all market offers and charge retailers for switching customers, while the websites offered by the Australian Energy Regulator and the Victorian government do not provide the tools customers need to discriminate among offers.

Prime Minister Malcolm Turnbull has ordered the Australian Competition and Consumer Commission (ACCC) to conduct an inquiry into electricity supply, costs and pricing, including retail pricing.

The Treasurer should have a preliminary report from the ACCC in his hands by the end of September this year, however this body does not submit a final report until 30 June 2018 with no guarantee that any recommendations will be adopted by government and industry.

Quite frankly, it appears the privatisation train left the platform some time ago and there is no way to halt or divert it in order to genuinely benefit household consumers.

Sunday, 9 July 2017

Is the Turnbull Government trying to hide ramifications of the Abbott Government's clean energy blunder?


On 20 March 2014 the Abbott Liberal-Nationals Coalition Government’s Clean Energy Legislation (Carbon Tax Repeal) Act 2014 was passed by both houses of the Australian Parliament amid scenes of ministerial jubilation in the House of Representatives and became law on 17 July 2014.


Since then it appears that this ideologically driven move away from squarely facing the fact of climate change has seen Australia’s greenhouse gas emissions begin to rise once more, along with sharply rising energy costs to consumers.

The Sydney Morning Herald, 22 December 2016

Until it now seems the Turnbull Liberal-Nationals Coalition Government may be actively attempting to hide the increasingly bad news from the national electorate on whose behalf it purports to govern.


The federal government has been keeping almost a year's worth of pollution data secret, despite it being scheduled for release in May, documents obtained under freedom of information laws reveal.

Independent estimates suggest Australia's greenhouse gas emissions have risen sharply since the government last released its quarterly data in December – a trend that would make the nation's commitment to cutting emissions more disruptive and expensive.

Quarterly updates by the National Greenhouse Gas Inventory, described as "up-to-date information on emissions trends for business, policymakers and the public", have been released 28 times since 2009, but not since last year.

Documents obtained under FOI by the Australian Conservation Foundation reveal that while the government possesses data on greenhouse pollution for the two quarters leading up to the end of last year, it has failed to release them……


According to estimates by consultant NDEVR Environmental, Australia's overall emissions increased by 1.15 per cent in the first quarter of this year, while electricity sector emissions increased by 11 per cent.

The overall emissions increase is equivalent to an extra 2,308,846 cars on the road.

According to NDEVR Environmental, the increase is almost entirely attributable to electricity emissions, while other sectors such as transport emissions decreased over the quarter……




UPDATE


“For the December quarter 2016, national emissions levels, excluding the Land Use, Land Use Change and Forestry (LULUCF) sector, have increased 0.4 per cent relative to the previous quarter on a seasonally adjusted and weather normalised basis. For the year to December 2016, emissions increased 1.4 per cent on the previous year.”

Wednesday, 31 May 2017

As utility bills get harder and harder to manage for those on low incomes, this comes as a slap in the face


In roughly five to six weeks time electricity prices are expected to rise for many people in Queensland, New South Wales, the Australian Capital Territory, South Australia and Tasmania.

Households are expected to pay up to $300-$400 more a year, with the rise in wholesale electricity prices making up est. 45 per cent of a domestic supply bill.

As low-income renters, pensioners and the unemployed struggle this winter with the choice of trying to stay warm without heating or face an impossibly large electricity bill, they might like to remember that all this was very avoidable.

First Prime Minister Abbott and then Prime Minister Turnbull (along with all their MPs and senators) had the chance to keep energy costs lower - but blinded by ideology they refused to do so.

This was The Sydney Morning Herald reporting the Turnbull Government's failure on 8 December 2016:

The Turnbull government has been sitting on advice that an emissions intensity scheme - the carbon policy it put on the table only to rule out just 36 hours later - would save households and businesses up to $15 billion in electricity bills over a decade.

While Malcolm Turnbull has rejected this sort of scheme by claiming it would push up prices, analysis in an Australian Electricity Market Commission report handed to the government months ago finds it would actually cost consumers far less than other approaches, including doing nothing.

It finds that would still be the case even if the government boosted its climate target to a 50 per cent cut in emissions by 2030.

Depending on the level of electricity use and the target adopted, modelling by Danny Price of Frontier Economics found costs would be between $3.4 billion and $15 billion lower over the decade to 2030.  Costs would be $11.2 billion lower over this time assuming average electricity use and the existing climate target.

Monday, 15 May 2017

Of Gas and Hot Air


Energy security became a major political issue following a storm-induced blackout in South Australia late last year.  Instead of the massive storm which knocked over the transmission towers being the “villain”, the Prime Minister and his Energy Minister Josh Frydenberg  blamed the state’s level of renewable (wind) energy for the outage. They have persisted with this version of events regardless of all the evidence to the contrary.
In the months since then politicians and others have had a great deal to say about the national energy grid and its shortcomings and renewables and base-load power.  Ideology has played a very significant part in the statements of many politicians. This of course means that truth has often been twisted or completely ignored. 
Recently the focus has been on gas and a predicted gas shortage.
Despite the claims of the Government and many industry players, there is no general gas shortage.  There is, however, a looming domestic shortage because most of the enormous volume of gas being extracted is being exported. 
The Federal Government has rather belatedly recognised that, despite the fact that Australia will soon be the largest gas-exporting country in the world, there will be a shortage of gas for the domestic market.  Moreover, the Government has realised that domestic consumers are paying more for gas than consumers of Australian gas in Japan - even after the cost of processing and transporting of the resource to that country. This has become a rather urgent matter for the Government because domestic gas prices and the uncertainty of supply is hurting local industries.  For a government that talks about jobs and growth, permitting more of our dwindling manufacturing base going either “down the gurgler” or offshore would be politically foolish.
As the Prime Minister’s meetings in recent months with the major gas exporters have not produced the cooperation he hoped for, he recently decided to take further action.  It is action that the industry is unhappy about saying that this will discourage global investment, a claim which is unsubstantiated. There are others, including some in the Government, who believe that this interference in the market is not justified.
What happens elsewhere?  Western Australia, the one Australian state which had the forethought to realise that there was a need to protect local interests, has a gas reservation policy[1]. Many other countries, including Canada, the USA, Israel, Indonesia and Egypt, have various mechanisms to ensure that they won’t end up in the situation that Australia is heading towards.  In their rush to encourage foreign investment, successive Australian Federal Governments failed to see that safeguards to protect domestic gas supplies were needed in the national interest.
Prime Minister Turnbull has stated that his measures will only be needed for the short term because he expects that there will be further development of local gasfields which can service the domestic market. He is referring specifically to NSW and Victoria which have currently stopped unconventional gas mining. (There is an exception in NSW.  Santos’ project in the Pilliga in the north-west is currently going through the planning approval process.)
The Prime Minister is one of many politicians and industry players who have weighed in wanting the opening up of NSW and Victoria to coal seam and unconventional gas mining. 
Recently Ian Macfarlane, the head of the Queensland Resources Council, and a former federal Coalition Minister, criticised the NSW and Victorian Governments for lacking the will to develop their gas resources in the same way that Queensland has.[2] 
What Macfarlane either does not understand or conveniently ignores is that it is what happened in Queensland as well as overseas in the USA and elsewhere that alarmed communities in NSW and Victoria and generated the campaigns against CSG and unconventional gas mining – campaigns that have gathered strength also in the Northern Territory and the north-west of Western Australia. 
In his interview with Leigh Sales on ABC TV’s 7.30 on April 27 Macfarlane paints a very rosy picture of the industry in Queensland [3]. He claims “irresponsible green activism” stopped the industry in NSW.   Blaming the anti-gas campaign on the “greenie” bogey is convenient for many conservatives but is far from a true reflection of the breadth of community opposition to an invasive and polluting industry.
It will be interesting to see whether the urging of the Federal Government and proponents like Macfarlane encourage the NSW and Victorian Governments to change their positions on gas mining. If this happens, the reaction from those who see the industry as an unacceptable threat to agriculture and the environment is easy to predict.
Hildegard
Northern Rivers         
5 May 2017

GuestSpeak is a feature of North Coast Voices allowing Northern Rivers residents to make satirical or serious comment on issues that concern them. Posts of 250-300 words or less can be submitted to ncvguestspeak AT gmail.com.au for consideration. Longer posts will be considered on topical subjects.

Wednesday, 22 March 2017

GAS SHORTAGE! GAS SHORTAGE!: Why on earth do you think we would believe you now, Malcolm?


“Santos now argues that its aim in CLNG was always as much about raising the domestic gas price, and therefore re-rating large parts of the portfolio outside of GLNG, as it was about the project…….What is more, with a ~0.8% drag on Australian GDP from every $2/GJ rise in the domestic gas price, this view certainly wouldn’t have been terribly popular with politicians who approved the project. [Credit Suisse, Asia Pacific/Australia Equity Research: Santos, 11 March 2014]

The reality for Australian householders is that on on average gas cost the same or more than electricity by 2012.

After managing to artificial inflate the domestic price of gas still further and wanting to reserve as much LNG as possible for the larger export market, now the Australian gas industry is crying shortages in order to blackmail state governments into opening up more conventional and unconventional gas fields across rural and regional Australia.

The fact of the matter is that since at least 1975 domestic energy consumption has been lower than energy production and export, while current gas domestic consumption remains significantly lower that current gas production.

According to the Australian Dept. of Industry, Innovation and Science’s Australian Energy Update 2016:

Natural gas production rose by 5 per cent in 2014–15 to 2,607 petajoules (66 billion cubic metres). Western Australia remained Australia’s largest producer of natural gas, producing nearly two-thirds of total gas production in 2014–15. Queensland production grew 45 per cent to become Australia’s second largest producer, overtaking Victoria, where production fell by 11 per cent. Production of coal seam gas increased by 50 per cent in 2014–15, to reach 462 petajoules (12 billion cubic metres), as new wells were drilled in Queensland to support the start of LNG exports from Gladstone. Coal seam gas accounted for 18 per cent of Australian gas production on an energy content basis, and nearly half of east coast gas production.

This Australia Institute graph makes the relationship between 2016 gas production and domestic consumption levels clearer:

Graph retrieved from Twitter

So why the alleged gas shortage?

The gas industry in Australia ignored signs that domestic gas consumption would rise and, in an excess of greed made commitments to export markets which appear to have been predicated on the assumption that it would be able to easily and profitably make up the competitive squeeze between domestic need, client country needs and its own commercial aims - because it would still be allowed open slather to drill or frack every available square kilometre of land with gas reserves beneath it.

This can all be explained in one sentence. The gas industry has been deliberately manipulating and starving the domestic market for years.

Mainstream media is finally looking at this problem a little more closely and explaining how businesses and consumers are being played for fools.

The Sydney Morning Herald, 16 March 2017:

Let's be clear: there is no gas shortage. Not in Australia, and not around the world. In fact, there's the opposite: a global glut of the stuff. BHP has already admitted there's enough gas in Bass Strait to supply the east coast "indefinitely". And globally, by the end of 2015 the gas industry was capable of producing about 25 per cent more liquefied gas than the world wanted to import.

By 2020, production capacity looks set to increase another 30 per cent. Even if demand is increasing – and that's not absolutely clear – it's not keeping pace with that. The world's biggest importer, Japan, has been reducing its demand for several years, and according to its own government, will be buying 30 per cent less gas by 2030 as it turns its focus to renewables….

So it was all very encouraging to hear Turnbull boasting this week about the size of his constitutional stick. "We have a responsibility – which we do not shirk from"; the industry understands the gravity of its "social licence" to operate. Et cetera. But the government has steadfastly refused to use that stick previously. And when you have gas companies slugging Australians record prices while charging their Asian customers record low prices, it's a little hard to believe they stay awake at night worrying about the terms of their "social licence".

What's much easier to believe, though, is that the gas industry is desperate to get its hands on gas supplies that are off limits – especially controversial ones like, say, coal seam gas. And if they have to offer a little more domestic supply to do it – at a time when global demand is slowing anyway – then it's hardly a sacrifice. Oh, and as it happens, that's exactly what Turnbull would like to offer them, hence his condemnation of the states' bans on further gas extraction.

It's a neat trick, really. Take a country with enough gas to supply itself "indefinitely", send the vast majority of it overseas, refuse to sell locally at a fair price, create a domestic shortage, then demand access to some of our most environmentally sensitive resources as though it's an emergency measure.
The Australian, 18 March 2017:
According to a report compiled by Energy Edge, the $US18.5 billion ($24.1bn) Gladstone LNG project, run by Santos, has at times been buying the equivalent of up to half of the whole east coast’s energy demand to meet a shortfall of gas to put through its two LNG production trains.
It is little wonder then that high up in the gentlemen’s agreement struck on Wednesday were commitments to supply, rather than deplete, domestic gas markets.
It is also clear that only two of the three Gladstone projects could agree to being net domestic gas contributors “as part of their social licence”.
The GLNG project has had to “take the matter on notice”, the agreement said.
The other two LNG projects — Queensland Curtis LNG run by Shell and Australia Pacific LNG run by Origin Energy and ConocoPhillips — have been consistently providing gas to the market (and GLNG, sometimes) on top of their export commitments.
“QCLNG and APLNG are currently either net long or balanced to the market, whereas GLNG is significantly short on equity supplies and must rely on third-party contracts,” Energy Edge said.
That was known by most observers.
But, using a range of public sources, Energy Edge says GLNG has sometimes bought a staggering 500-600 terajoules a day of gas on top of its own production.
Illustrating how substantial that volume is, the combined domestic demand from the pipeline-connected eastern states of Queensland, NSW, Victoria and Tasmania is about 1250 terajoules a day.
GLNG appears to already be averaging the use of about 300-400 terajoules a day of third-party gas — that is, gas outside the coal-seam gasfields it has developed specifically to feed its LNG project — for its LNG export.
With APLNG and QCLNG ­already fulfilling the demand, any short-term change will need to come from Santos and its GLNG partners Total and Kogas, although it might pay the rest of the industry to somehow provide some assistance.
After the meeting, Santos chief executive Kevin Gallagher, who was brought in last year to fix the problems, would not comment on exactly what the GLNG response could be.
“As an Australian company that has supplied the domestic market since its inception, we look forward to working with and supporting the government on this issue,” Mr Gallagher said.
“We are committed to working across all of our joint ventures to free up gas as well as continue to identify and develop new resources for the domestic market.”
As recently as December, at the company’s investor day, Mr Gallagher said the aim was to ramp up GLNG volumes to fill 6 million tonnes of the plant’s 7.8 million tonnes of annual LNG export capacity.
This could be potentially expanded by offering tolling services to other Australian gas producers who might want to export their gas but didn’t have the facilities, he said.
Enthusiasm for toll-treating has probably eased off in the wake of the meeting with Mr Turnbull and the current alarm around contract prices that Australian Competition & Consumer Commission chairman Rod Sims said this week “are apparently being offered at $20 a gigajoule, if they receive supply offers at all”.
East coast gas contract prices were $3 to $4 per gigajoule before the export plants were committed to and are said to now average $8 to $10, except in extreme cases.
The $70bn worth of Gladstone gas freezers and associated coal-seam gas wells have rapidly tripled east coast gas demand and opened the market up to international buyers.
This has ended an era of cheap Australian domestic gas supply, although the industry says this would have happened anyway because the cost of developing required resources was rising.
But the expected price hike has been exacerbated and come with shortages thanks to external factors and industry and government missteps, many of them flagged by observers before they were committed to.
Despite calls for industry to collaborate, three separate, almost identical plants were approved by Queensland and federal governments and, from 2010, built by the gas industry on Curtis Island.
This resulted in increased capital costs because infrastructure was not shared, cost blowouts as the remote construction market heated up and the building of six LNG production trains when the associated coal-seam gasfields could only really supply enough fuel for five.
To achieve efficiencies of scale, GLNG built two trains when it only had enough gas to comfortably fill one, admitting it would need to buy an unspecified amount of third-party gas to fill the second train.
After this, much that could go wrong has gone wrong.
Oil prices crashed, robbing gas developers of cash flow and investor funds that would have been used for extra LNG-related and domestic gas development, while community opposition to onshore gas production grew, resulting in bans or restrictions on new development in NSW, Victoria and now the Northern Territory.
At the same time, coal-seam gas resources did not perform as well as hoped at some Santos GLNG grounds, Santos’s Narrabri project in NSW (which was also hit by community opposition) and at the Bowen Basin ground of the Arrow joint venture between Shell and PetroChina.
It is not clear what the options are for GLNG, but Credit Suisse analyst Mark Samter has made repeated calls for it to close down one of its two trains — something Mr Gallagher ruled out last year.
Now an incredibly rich Liberal Party politician heading a Liberal-Nationals federal government – who was a failure as Minister for the Environment and Water, an abject failure as Minister for Communications and is a profound disappointment as Prime Minister of Australia – expects voters to believe that there is a genuine gas supply emergency which will leave local families and businesses going without unless the states allow indiscriminate gas mining.

Sunday, 19 March 2017

National Farmers' Federation calls for market-based mechanism to secure clean and affordable energy, such as an emissions intensity scheme


I’ve grown old waiting for Liberal and Nationals members of parliament to turn and squarely face the reality of global warming and climate change.

I suspect that I will be long dead before they actually do.

Once more the call went out to government………

The Guardian, 7 March 2017:

The National Farmers’ Federation has called for a market-based mechanism to secure clean and affordable energy, such as an emissions intensity scheme, joining a long list of organisations urging an end to Australia’s policy impasse.

In a submission to the Finkel review, the NFF calls for the government to reconsider its opposition to an EIS and institute a market-based mechanism by 2020 because it would be the cheapest path to low-emissions power generation.

The NFF joins many organisations calling for consideration of a market mechanism including network company Energy Networks Australia, retailer Energy Australia, electricity provider AGL, the Climate Change Authority, the Business Council of Australia and the CSIRO.

The chief scientist, Alan Finkel, has also given implicit support for an emissions intensity scheme, saying it would integrate best “with the electricity market’s pricing and risk management framework” and “had the lowest economic costs and the lowest impact on electricity prices”.

In December the energy and environment minister, Josh Frydenberg, ruled out pursuing an EIS, pre-empting the findings of the Finkel report by taking one of the most widely supported policies to meet Paris climate targets off the table.

On Tuesday the NFF president, Fiona Simson, told ABC’s AM the current system was “broken”, citing blackouts in South Australia and poor energy reliability and affordability in the agricultural sector.

Simson said some farmers faced power bills of double or triple the rates in previous years, labelling price spikes “indefensible”.

“In agriculture it’s absolutely devastating – we have businesses that rely on secure, reliable and affordable electricity to conduct cool stores that store fruit, for example, that run their milking machines for their cows, that run irrigation pumps for their fruit and their vegetables.”

Simson said that an evidence-based policy would result in “the market sorting it out” and called for a technology neutral approach.

An emissions intensity scheme is part of Labor’s climate change policy and has been backed by the South Australian government, which the Coalition has used to revive a scare campaign about power prices despite findings that policy stability can reduce prices…..

Finkel is expected present his final report to the Council of Australian Governments by mid year.