A heroes parade is on for those who predicted the gas crisis. Rod Sims leads us off.
Former head of the competition regulator Rod Sims says he has been warning the Victorian Labor government about gas shortages for a decade but was ignored, after wild storms left more than 45,000 homes and businesses in the state without power on Monday.
…Mr Sims, who led the Australian Competition and Consumer Commission from 2011 to 2022, told The Australian Financial Review he was first asked to review the concerns in 2015. At the time, the ACCC concluded that “meeting future domestic … demand will require extensive development of undeveloped gas reserves and resources.
To my memory, Mr Sims only once mentioned domestic gas reservation, after I harangued him into it.
More supply will not fix the issue because the problem is not a lack of supply. The problem is a gas export cartel that sits on 83% of East Coast reserves, and within a decade they’ll own all of it as Bass Strait drains away.

Advertisement
It was earlier than Rod Sim’s time, however it was the ACCC who accredited the merger of Arrow Power—the final impartial reserve—with the cartel.
One other self-referential wanker as we speak is Richard Holden.
Within the grand custom of smart-arse academics-cum-columnists telling politicians “I informed you so”, I co-authored a report for the McKell Institute in 2017 that argued for charging a ten per cent royalty on offshore fuel tasks and establishing a home fuel reservation scheme.
Advertisement
What, if something, might be carried out to repair it?
We shouldn’t retrospectively apply a fuel reservation scheme to present provide resembling in Queensland. That screams, “sovereign threat”, will deter future funding, and dangers retaliation from the Trump administration on behalf of the US corporations working in Australia.
However we might encourage the event of recent home provide – resembling from the North Bowen basin – mixed with adequate new pipeline capability. As Tony Wooden noticed on these pages not too long ago, this can take time. That doesn’t imply we shouldn’t begin.
FFS, develop some balls. It’s a cartel, mate.
It’s already dominated and killed hydrogen. It’s attempting to monopolise storage. It’s tried to monopolise LNG imports. Tony Wooden’s Grattan Institute is on the cartel payroll.
The second LNG imports begin, the cartel will additional prohibit native provide to make sure import parity costs turn into the native marginal value setter.
The one solution to stop that is the one factor no person will do. Retrospective 15% home reservation of East Coast reserves and/or some type of gigantic tax recycled as rebates.
In any other case, LNG imports will set off a cascading inflationary shock that may wipe out the Australian economic system, as we all know it.
Advertisement
Not least as a result of they’re timed to coincide with the unfolding crash in iron ore such that each time the AUD falls, the home fuel value will go up.
The forthcoming LNG imports 2026/27 fuel and electrical energy value shock is big, including 4% to CPI and double that with spillovers.

Advertisement
Do these heroes wish to see the RBA pressured to hike rates of interest into an infinite nationwide earnings shock as iron ore revenues collapse whereas fuel costs soar?
The outcome shall be.
- Collapsing home costs.
- Collapsing residing requirements.
- Collapsing governments.
- Collapsing assist for the power transition.
In brief, chaos. Is that preferable to upsetting Tokyo and Beijing for a few weeks?
Advertisement
Get your collective fingers off it.
15% blanket East Coast home fuel reservation and an export levy above $7Gj now.
Or Australia dies.
Add comment