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Fossil Fibs: how the gas lobby gets away with cooking the planet, rooking its customers

by Michael West | Nov 22, 2022 | Comment & Analysis, Energy & Environment, Latest Posts

We expose five of the gas lobby’s big lies and the manipulation of governments and media which lends them licence to profiteer at the expense of every Australian. Michael West reports. 

It was Josef Goebbels who famously said “If you tell a lie big enough and keep repeating it, people will eventually come to believe it”. The gas industry does this. Their lies are deadset whoppers, whoppers for which every Australian pays a price.

We hear a lot about renewables, renewable energy that is. Though never enough about renewable lies. Have your seen the words “renewable gas” or “sustainable gas” bobbing up lately? Just like “clean coal” the fossil fuel corporations are attempting to insert them into the national lexicon, in order to lock in as much production as they can until the climate curtains come down.

We explore five of the biggest lies: 

Renewable gas

Like clean coal or Carbon Capture and Storage (CCS), gas made from renewables is technically feasible. Yes, you can drill gas and capture the emissions. You can mine coal and capture the emissions; but neither are commercially viable. Scientifically, it is kosher, commercially, it’s a dud.

The irony of this “clean gas” is that you need to produce more gas, or more coal, to make the projects work in a financial sense. It takes energy to capture the emissions and then store them. Leakage is an issue, check out Gorgon. So “clean gas” is just an excuse to drill more fossil fuels, make more money, keep the party going. 

Carbon Capture’s Epic Fail: giant Gorgon gas plant goes ‘phut’

Carbon capture technology has been promoted for years. The reality is that it’s not happening anywhere in the world with credible commercial success, unless subsidised at great public expense. And that is what we are doing now. The Australian public is subsidising clean coal and clean gas projects. The government hand-outs mostly benefit the foreign shareholders of multinational corporations.

More supply means cheaper gas prices

This is a deadset ripper of a lie. The good old “supply and demand” malarky. We need more gas supply to get prices down, they say, their “independent experts” say,” “the latest modelling says”, “revealed exclusively” by the belt-it-out press release rewrite in Murdoch and Nine Entertainment media (emphasis on “Entertainment”).

Therefore, we need therefore to drill more, frack more, they say. Let’s just puncture this porky with a chart.

That massive red blob above shows gas production and supply rising steeply eight years ago when they opened up the LNG export market in Australia. Check out the story by courageous whistleblower Simone Marsh here. That’s when the gas lobby conned governments into believing that drilling more gas would be a good thing for Australians because, you know, good old supply and demand; more supply will bring prices down.  

It didn’t.

Precisely the opposite happened thanks to “export price parity”, cartel manipulation and Russia’s invasion of Ukraine. The supreme paradox is that actual demand for gas – check out the purple and yellow bits in the chart above – has eased slightly lower. Now check out this one:

 

Prices have shot through the roof, rising fourfold. Why is supply and demand not working? That brings us to the next lie.

It’s the market!

“Don’t interfere in the market!”, “It’s the market”, “sovereign risk”. We hear this refrain routinely re-performed by the marionettes of the media. Supply and demand does work actually – ask any economist (they get this one right) – if there is in fact a market. What we have here however is a cartel, a cosy club of price-setters dominated by four multinational drillers rigging prices: they would be ExxonMobil (joint marketing deal with BHP), Shell, Santos and Origin.

There are other foreign corporations in there, Conoco-Phillips, Inpex, BP, etc. Markets are things where you can see buyers and sellers trading in a transparent way, like the ASX; bids and offers, how much stock they want (depth), buyers and sellers, and at what price. Instead we have no visibility in this purported LNG “market”. Conveniently, that’s all a secret.

And the price of exports determines the price for domestic customers (and gas determines the price of electricity). Ergo, we are paying export prices despite being the biggest exporter of LNG, despite the clear fact that energy is an essential service which affects the costs of millions of households and businesses and determines the fate of Australia’s economy. Where is the Business Council of Australia? Simpering in hiding again a la JobKeeper?

Clearly something is broken when we are building import terminals to bring gas into Australia, gas which we have exported overseas. Clearly something is broken when consumers in Japan pay less for Aussie gas than do Australians.

The export lie

A sneaky subterfuge this one. Exports are things which typically take place between countries, not states. But the gas lobby has cooked up this idea that states export between each other. “We must frack NSW because NSW people should not be importing gas from Queensland.”

The raison d’etre for this PR move is to push the idea that we should frack everywhere: NSW and Victoria, despite the science, despite the incontestable reasoning that we can estimate the profits from shattering million-year-old aquifers but are taking a complete punt on the damage to water systems and farmlands 30 years down the track; “salting the earth” as the Romans called it. 

Queensland doesn’t “export” pineapples to Tasmania, and Tasmania doesn’t “export” its opioids to Queensland. Australia exports gas to Japan, though. And consumers in Japan buy Australian gas more cheaply than we do – even after it’s piped to Gladstone, turned into LNG, shipped 6,726kms to Japan, turned back into gas again and then retailed to Japanese customers.

How broken is that? 

But the gas lobby has convinced governments that NSW and Victoria need to drill more gas, we need to frack the Northern Territory, frack everywhere because more gas supply means lower prices and because NSW and Victoria should not be “importing” gas from Queensland and Western Australia. We can’t possibly introduce a “domestic reservation policy” even though it’s working in WA.

And they have believed all this piffle because, not quite sure about this one, but presume some “really nice person” who just happens to be paid a lot of money for knowing this stuff has told them or a friend earnestly believe that it is true.  

Or they heard it in the media.

Jobs, jobs, jobs

Our next prolific porky is “economic benefits”. It goes like this: we have to drill more gas and mine more coal because of the benefits to the Australian economy. Check out this “independent experts report”. It says so.

“Gas pumps at least $70 billion per year into the Australian economy and is vital to every state and territory, according to new analysis.”

We saw this one today. They pump out this rubbish weekly, just making the proverbial up.

“Research by ACIL Allen Consulting for industry body Gas Energy Australia found gas supports almost a quarter of a million jobs, underpins 3.4 per cent of GDP, and is forecast to grow next year.”

Trumpery

This sort of gumpf bobs up in the press with increasing regularity. Editors and journalists get the press release and rewrite it, showcasing the words of some expert or other, sounding authoritative. Their craven bosses expect them to toe the line because there are fossil fuel sponsorship revenues at stake, and this is right now the most lucrative industry in the world.

They cook up a headline figure – “$70b at threat from regulation” etc – 250k jobs etc. Here is the reality: the gas cartel is controlled by foreign multinationals which pay little or no tax, little in the way of royalties for exporting our gas. These are the big winners: foreign shareholders, foreign corporations.

Check out this chart from Daniel Bleakley and The Australia Institute:

There’s your fossil fuel revenue, there’s your royalties. All going south, and quite sharply since the blow-out in supply. And there is Norway. It shows a country which has got it right, a country where government is working, where they are looking at common sense, not swallowing lies from lobbyists. That country would be Norway, a huge exporter of oil and gas.

We are being conned, duped, hoodwinked, lied to daily by the representatives of large foreign corporations. How does it work and why? Just follow the money: gas cartel makes large payments to both major political parties. They call these “donations”. They spend big on lobbyists to hammer politicians, policymakers and big media with their propaganda, demanding meetings, forking out for lunches and events.

The authorities faithfully fail to regulate for Australians but instead regulate for foreign corporations. And they control the message too. By paying News Corp and Nine Entertainment they have the finance press in their pockets. Think tanks and “independent expert reports” bombard the media with media releases. AFR and The Australian industry “roundtables” compound the problem. Cash for comment and capture.

The rest of the press, from ABC to commercial websites, morning TV and radio, pick up the propaganda and reproduce it with their “What the papers are saying” segments. And the cycle of media control duly propagates.

 

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.

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