cassowary wrote: ↑
Mon Jun 03, 2019 11:09 pm
neverfail wrote: ↑
Mon Jun 03, 2019 11:03 pm
cassowary wrote: ↑
Mon Jun 03, 2019 8:02 pm
Then there are the Marxists who use environmentalism to pursue their hidden agenda of destroying capitalism. Have you not heard of the term “watermelons “? Green on the outside but red on the inside.
Among those "watermelons"; would you include all of those hard headed investors currently pouring money into renewable in this country (mentioned in a couple of my earlier posts, this discussion) in anticipation of coming profits?
Like all businesses, there is risk. Let's see if the fossil industry can cut costs and bring down oil, gas or coal powered energy. That is the beauty of capitalism. Always competing, always uncertain. If they succeed, the green energy investors will lose their shirts.
Let them fight. Politicians must stay out.
Cass, in this country it is predominantly exports overseas, not domestic usage, is the mainstay of our coal and natural gas industries. As for oil we are a net importer of that so among fossil fuels this one is the one least likely to be used cost-effectively to generate electric power.
Did you actually read that link to (economics editor, the Sydney Morning Herald) Ross Gittin's take on the issue. Your chirpy spiel on the virtues of capitalism leads me to think not. Well, here it is again for your edification:
http://www.rossgittins.com/2019/06/how- ... orlds.html
How to dud manufacturing: be the world’s biggest gas exporter
Is this the best way to regulate a market? No, but once you’ve stuffed it up you have little choice. The stuff-up evolved over some years, under federal governments of both colours and, predictably, with a lack of federal-state co-ordination.
It began in the resources boom, when Labor’s Martin Ferguson approved the construction of no less than three gas liquefaction plants near Gladstone in Queensland. That was one plant too many.
The companies secured the cost of building their plants by writing future contracts to export LNG to foreign customers. The first two companies secured the supply of sufficient gas from local sources, but the third had to scramble for what it needed to meet its sales contracts.
They expected far more gas to be available than transpired because they failed to anticipate the NSW and Victorian governments’ moratoriums on fracking for unconventional gas from coal seams.
Until the construction of the liquefaction plants – which enabled gas to be shipped overseas – the east coast gas market was cut off from the world market. This meant its prices were much lower than world prices.
The federal government knew that allowing the plants to be built meant opening the east coast market to the (much bigger) world market, forcing local prices up to the “export-parity price” or LNG “netback” price.
But, as Sims noted in a speech last week, the east coast was "just about the only region in the world that allowed unrestricted exports”. By contrast, when our west coast gas market was opened up, the West Australian government insisted on reserving sufficient gas to meet the needs of local users at local prices.
So, the east coast market opening was textbook pure (and much to the liking of the gas companies). Trouble was, the market worked nothing like the textbook promised. Lack of competition meant prices shot up to way above the export price.
The gas producers were able to overcharge the big industrial users, the three big gas retailers – AGL, EnergyAustralia and Origin – charged the smaller industrial users even more, and the pipeline owners whacked up their prices, too. Retailers’ prices peaked at $22 a gigajoule.
The gas companies have absolutely no incentive to compete in cost cutting since they have it good as it is. The high price of natural gas here along Australia's (populous) eastern seaboard also makes it too costly as a substitute for coal to power electric turbines - bearing in mind that burning natural gas is less polluting to the atmosphere than burning coal.
So by that process of elimination; it leaves only renewables, solar, wind and pumped hydro, to satisfy Australia's future needs for electrical energy.
Politicans stay out?
(An aside) Ross Gittins mentions a former minister in a past Federal Labor government named Martin Ferguson. It so happens that I knew the guy when he was still in his late teens and before he began his political career in earnest. His decision to allow the construction of no less than three gas liquefaction plants at the deepwater port of Gladstone, Queensland was arguably the biggest single mistake that brought about the current energy impasse along the eastern side of Australia. Was he working in the best interests of the energy companies and against that of the Australian public? No, I do not believe so! More likely he was a bit out of his depth with his Ministerial portfolio.
Then the state governments (under widespread public pressure) let him down by subsequently placing bans fracking of coal seam gas - creating the shortfall of methane gas that has forced the natural gas exporters to turn to supplies of (conventional) natural gas to honour their export contracts -thereby draining our east coast reserves of natural gas and creating the impending shortage and resultant high prices.