Deaf to the Murdoch and Nine Entertainment descants of the fossil fuel choir soaring high above the harmonies of Woodside, Shell and Santos, the Australian stock market sent Santos and Woodside share prices up, not down, in the wake of the Albanese government’s gas market intervention. Daniel Bleakley exposes the bull.
The past two weeks have provided a fascinating insight into how the gas industry uses lobby groups and the media to manipulate the public discourse and apply threats and intimidation to influence the decision making process of Australia’s democratically elected government.
On Tuesday December 13, two days before the government’s Energy Price Relief Plan was scheduled for debate in parliament, Radio National breakfast host Patricia Karvelas asked Woodside CEO and APPEA Chair Meg O’Neill: “In a joint statement with Shell yesterday you claimed that the government’s proposal would lead to domestic shortages and gas rationing, why would that happen?”
Before responding to the question Meg O’Neill attempted to allay any suggestion that the gas giants were coordinating their response. “Just to clarify it was a Woodside statement and Shell has also issued separate statements on this matter” she said.
It’s very important for these companies to be seen to be acting “independently” as any coordination of their messaging around government price cap proposals could be evidence of collusion and confirm many observers’ accusations that the Australian gas industry is a cartel.
Over the past two weeks multiple gas company executives, industry lobby groups and media commentators have run very similar lines around “investment risk” and “increasing electricity cost” in almost perfect harmony with each other while providing no credible evidence to support their claims. The ABC has dutifully recorded their songs too, lending voice to the wrong tune, amplifying the shrill anthem of fossil fuel corporate victimhood.
On “investment risks”
A statement from oil and gas peak lobby group APPEA on December 15 said that government intervention would:
“Smash investor confidence and undermine Australia’s reputation as a secure and stable investment destination.”
Santos CEO Kevin Gallagher on the 15th of December:
“This Soviet-style policy is a form of nationalisation. This will result in companies needing fiscal stability agreements with the government before new gas supply projects can take investment decisions in order to secure capital, just as would be the case if they were operating in Argentina, Venezuela or Nigeria,”
Woodside CEO and APPEA Chair Meg O’Neill said:
“The proposed market intervention will make it very difficult for industry to economically invest to increase supply”. And “Meddling with prices is a very dangerous pathway”
Queensland Resource Council CEO and former Resources Minister Ian Macfarlane on the 14th:
“It’s more the signal that it sends investors that this government is prepared to interfere in a market”
APPEA CEO Samantha McCulloch on the 12th of December said the reforms:
“will have a chilling effect on investment”
So much for investor “fury”
The Australian Financial Review quotes another unnamed gas industry CEO who said its shareholders were “absolutely furious” and that gas industry investors would be “sitting on their hands” for the next 12 months.
If the Queensland Resource Council, APPEA, Woodside and Santos all believed price caps are “dangerous” and will “smash” and “shock” investment in gas they got it horribly wrong. As evinced by the ASX share price charts above, the market – and this is a real market unlike the gas “market” – didn’t price in any risks at all. Shares went up.
Santos share price since the price cap was agreed to by National Cabinet shows the “horrific” investment environment resulting from the market intervention.
Woodside shareholders experienced a similar “bloodbath” after the price cap announcement.
The same chorus of voices also made spine-chilling predictions of energy price increases, energy shortages and the dreaded blackout resulting from price caps set at more than double production costs.
The mainstream media has been complicit in peddling these lies.
On Friday the Australian ran a story titled “Blast for PM’s ‘Soviet’ plan: higher bills, more blackouts”.
“Anthony Albanese’s energy market intervention could increase gas bills by $175 per year and push up businesses’ energy costs by 40 per cent, according to independent modelling that warns price caps may trigger supply shortfalls and blackouts in Victoria.”
Independent modelling? As independent as your mum
What it failed to mention was that the “independent modelling” was commissioned by the gas industry’s lobby group APPEA. The “independent modelling” was immediately debunked by gas industry experts.
In fact high-school economics students could have debunked it by pointing out that industry’s cost of production is less than half the $12 cap and that there’s an abundance of gas in the market. An economics student might actually question why in a “competitive market” is the price not going down further?
The AFR has made its support for the gas industry abundantly clear in recent pro-gas expansion stories and by naming APPEA Chair and Woodside CEO Meg O’Neill one of AFR’s “Business People of the Year”.
Australia’s public broadcaster was also exploited as a platform to spread fear and doubt the night before parliament debated the proposal when Laura Tingle interviewed the CEO of Queensland Resource Council and former Howard government Resource Minister Ian Macfarlane.
The ABC of being had
Advertising is banned on the public broadcaster however highly paid gas industry lobbyists, like Ian Macfarlane, are allowed to broadcast gas industry talking points into the homes of millions of Australians.
The fossil fuel industry has a huge influence over the media. In some cases the lines are completely blurred. For example Channel 7 and The West Australian newspaper are both part of Seven Group Holdings. Seven Group Holdings also owns a string of oil and gas plants. One of the plants is a joint venture with Shell. With this in mind it’s difficult to imagine David Koch on Sunrise calling out gas industry tax avoidance and championing urgent decarbonisation.
But things are changing regardless. Anyone who witnessed the performance of the press gallery during this year’s federal election knows that the mainstream media no longer influences election outcomes in the way it used to.
The reason for this is that political communication is now happening IRL (in real life) and through social media as the “teal” community campaigns have proven.
Just last week Senator David Pocock posted a video on Twitter calling for a windfall profits tax. The clip received over 80,000 views and a scroll through the comments gives cause for some optimism.
The shift away from mainstream media is a major problem for the gas lobby who have been threatening to launch a 2010 style anti mining tax campaign. Unfortunately for the gas lobby and fortunately for the Australian public, it just won’t work this time. The risk is an embarrassing flop, just like the scare tactics by Santos chief Kevin Gallagher.
Coalition sidelined, fossil outrage as Labor strikes deal on Energy Relief bill with Greens
