Be suspicious, be very suspicious! Albo is capping off Labor’s first year in office triumphant, his deal to cap gas and coal prices even lauded by the pro-gas corporate media. What’s the scam?
The scam is a political fix. It’s a deal designed to look tough on the gas cartel which is reality generous and might lock in high prices (gas determines the price of electricity).
The numbers: gas used to trade at $5gj before the LNG cartel ramped prices to export parity. It was $10 less than two years ago. Cost of production is roughly $5gj now, but spot prices are up to $25gj. So why cap at $12gj? Producers still make a massive margin domestically, and 72% of their gas is exported anyway – for gargantuan profits.
How did they arrive at $12? MW columnist and transparency warrior Rex Patrick has lodged an FOI with the government asking how they got to $12, and who advised them. Meanwhile, the usual fawning corporate media, patsies for the gas giants, are praising the deal today: AFR: “Price caps essential for energy transition”, “Power bill blow-out to ease”. What? Aren’t these guys meant to hate market intervention?
The Australian is leading with a glowing headline: “Bill relief: PM seals energy deal with premiers”.
The detail of the National Cabinet deal, as usual, will be key to how effective it is in the end. It is commendable the government has moved against the fossil profiteers, again sticking to its commitments, But the industry response smacks of crocodile tears.
It’s a trap: mooted gas cap plays into the hands of the cartel, locks in high energy prices
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.