Countries that make an effort to reduce gas dependence may get a long term advantage even if it is expensive in the short term. The US may have set a trap for itself as fracking has lowered natgas prices to less than they were a decade ago. Some US states (eg Vermont, California) have replaced nuclear plants with renewables fronted gas generation which has more emissions and will be more costly if the gas price reverts.

Everything gas does has an alternative approach. Ammonia for fertiliser can be made from electricity, air and water. In theory peaking power plants can be replaced by batteries though the price needs to come way down. Gas for low heat can be replaced by induction cooking and heat pumps while high heat can come from burning biomass. All this is simpler with a large amount of nuclear baseload.

Therefore Australia's high gas prices may be a blessing in disguise if we can learn to need it less. When high gas prices come back to the US they will be in a predicament.

Geoff - I am under the impression that much of the exported gas was sold forward long ago. I seemed to recall deals being signed when Howard was PM with some fanfare. You would expect some forward selling with projects of that size. As for gas deposits there is plenty in Aus, but the gas is owned by the governments who charge royalties not the farmers. In the US the farmers get the royalties so they welcome exploration. Here the farmers don't get much hence the opposition..

Yeah, passing strange how our gas after costly compression and transport cost the Japanese just $7.00 per K, with compression and transport costs deducted. While we here pay $20.00 per K for our gas. It's our gas mined from our ground under licence and a mining lease we grant! We're selling our gas, because we've S.F.A., else to sell to earn essential export dollars.

This is what happens when you've traded your economic sovereignty for the modern day equivalent of forty pieces of silver? We might address this with a very different mindset and some economic competence at the helm no longer willing to just give away every advantage for some largely illusionary foreign defense umbrella?
The same one that stood shoulder to shoulder with our south Vietnamese allies and were forced to concede the field to a rag tag hopelessly outgunned Asian army who outmaneuvered them at virtually every turn.

Gas? We've all we need and forever and for nix, but only if we embrace green technology and build and use Aussie invented, smell free closed cycle, dual tank system bio-digestors to create endless biogas (methane).

Every Aussie family produces enough biologic waste to support this; and better use of a wasted energy resource than endless flushing into already hopelessly polluted oceans!

On top of that is the energy whose name shall not pass our lips our legislators! Thorium as nuclear energy. Thorium is fertile not fissile and therefore cannot be compressed to produce a nuclear explosion nor does is produce any weapons grade plutonium in its reaction, but will burn it up if added as problematic waste needing to be fully and finally depleted to prevent its use in nuclear fission bombs!

Now there may well soon be a international market for thorium and when that time comes our pollies will likely form a conga line in their haste to trade away our heritage. We have thousands of tons of it already concentrated as waste from sand mining!

We therefore need a new broom that sweeps out the whole rotten self serving lot.
TBC.
Alan B.

We need to unlock our own still unsold remaining energy resources, even a the risk of huge sovereign risks to the same folks charging us double for our gas/energy etc!

I have no idea why we treat these price gouging foreign speculators as (sacred cows) vastly more important than endlessly and unfairly exploited Aussie consumers?

Moreover, if we are going to need a new broom it has to be one the sweeps out the covertly compliant garbage from both houses?

Otherwise all you'll get is running interference and energy policy gridlock, like now!?

There are so many things we need to do for Australia and Australians, starting with eliminating huge government waste as massive and completely unnecessary double handed cost adding admin.

What we can no longer allow, are profit demanding middlemen who add nothing of value, just their profit demands, be they in the private sector or public sphere?

A citizen's initiated referendum could be what it takes to end this snouts to the trough routine that passes for a competitive free market and or, good inclusive representative democracy?

And the likely reason we will never ever have a comprehensive bill of irrevocable rights!?

With the add nothing but profit demands middleman outlawed the cost of living could easily be halved!

Nobody is owed a living least of all practitioners tasked with unraveling entirely counter productive man-made complexity. Better we just eliminate that complexity, adding around 7% to the average bottom line in the process.

The gig has to be up! Or should we pathetic, apathetic, captive market milch cows, just roll over and beg for a tummy rub from those who are bleeding us white, as they wax fat on price gouged profits, and it seems, with covert permission?

Don't just do something, stand there! Or better yet just keep wasting or refusing to use precious votes dummy!?
Alan B.

Yes Tas. we can if we are actually led by folks who put our interests ahead of other considerations. Even tiny tassie supported some sand mining (rutile, Burnie) where thorium became a waste product to be disposed of. And due to the specific gravity, easily done via gravity separation. It's down there still?

Anyhow, the tried and proven walk away safe thorium technology produces useful heat, enough to create endless catalytically created hydrogen from sea water. And if we chose combine it with liquefied Co2 also extracted from seawater to make diesel alternatives and or ammonia based fertilizer. and not theoretical, but already proven technology. We open so many doors by just doing it with already tried and proven technology.

And for virtually nothing, if we use affordable, income earning mass produced modules as processing electricity generating plants to process other folks nuclear waste and extract valuable miracle cure isotopes. And very safely, while the reactor is up and running, with the inclusion of robotic arms.

Simply put, we have plenty of our own money in our two trillion dollar super fund, which can be used to leverage two trillion more for energy, fuel and affordable water projects, all of which enable huge wealth creation for us, but only if we're smarter than we've been thus far in our race to sell everything not nailed down to debt laden foreign speculators?

Why we gave away the one step process for steel production by employing a Yank, Chip Goodyear as CEO of BHP, and stood idly by as he gifted it to our American rivals.

Similarly, K Rudd gave away the also locally invented method of uranium enrichment using far more efficient and vastly less costly pulsed laser light as the method.

Perhaps we need some retrospective enabling legislation, righting wrongs, to claw back these last two as Australian invented innovation.

Just by taking a leaf from visionary Lee Kwan Yu's financial, investing in your own people and their better ideas, book. And intelligence, finally at the tiller.
Alan B.

Geoff, the short answer is, incompitent governments playing in a game where they were way out of their debth. The insulation debacle take two.

You see the gas companies came to the table offering to extract the gas and pay the governments royalties. To do this they had to meet certain abligations, which they did and they then went off and invested billions in prospecting and building infrastructure.

Now, and this is the killer, the future governments have come along and requested that these gas companies all of a sudden, after investing their billions and playing by the rules as set out, are being asked'forced to retain some of the gas for the domestic market. Shifting the goal posts.

Of cause here in QLD, one of the states with huge reserves, the then premier Anna Bligh, has moved on to the corporate world having turned us into a 'basket case' and despite the mine field she has left behind, gets to wipe her hands of the whole debacle, as do all retired pollies.

Big business requires certainty, and my tip is this back flip on gas will cause imense damage to our future mega projects moving forward, simply because the negotiators (governments) were to use a famous movie line, writing cheques their egos coundn't cash.

Reading the article I began to wonder ..

Is the current gas mess - with it's business and government inaction - an attempt to force the Australian community to accept fracking? Is this by coincidence or design?

DW, fracking is only used where the gas is trapped, so i would suggest no.

It's our gas, we grant the mining lease and the requisite export licence. Yes we signed a trade deal with china. Since then China has found huge new gas fields in shale, And just doesn't need as much gas as the contract calls for? And would likely be amenable to a renegotiated arrangement to end this ludicrous deal well ahead of a 30 year timeline?

Anyone who doesn't understand we get more positives by keeping and using our own energy stocks to improve our ability to dominate various markets and or trade deals! Needs to go back to at lest complete junior high school economics!

I don't know who advises us on these counterproductive trade deals, but they're likely foreigners with anything but the national interest as an agenda? Which then leads to an allied subject. CEO's, their rewards and entitlements.

Which needs to be very different, starting with recruiting and mentoring from within and different treatment of share issues as reward.

These should be more generous, but loaned not given, with just dividends in play, meaning a very different mindset and vastly superior, long term management paradigms. And far less overvalued and over leveraged assets, which in turn would result in far more sane decisions and practice!

And less Ponzi and get rich quick schemes with an ultimate huge downside! Like our current energy crisis/malaise? Which to date we have responded like the proverbial rabbit caught in glare of a marksman's spotlight!

That said, I applaud a PM, who has had the guts to give our regulator some serious say or veto, in who manages our most important financial institutions and should extend into every boardroom and corporation with over a million in management?

For far too long we have allowed foreign corporations/investors to exert far too much control over our economic destiny and at our ultimate disadvantage, which presents as a 30% premium at various checkouts, unaffordable housing/energy and our energy exported to maximize foreign corporations bottom lines, to our ultimate financial and economic detriment.

Business as usual needs to end/stop!
Alan B.

Alan, we have a TINY popuation with HUGE appities and the only way we can fund our EXPECTED lifestyles is to export. End of story.

Whether it be crops, cows, sheep or minerals, including gas, we have no option other than to sell to outside markets as we simply cant use enough ourselves to keep the wheels turning.

As for the 'its our gas' comment, well one posetive proposal is to share royalties with landowners like myself which may well be the answer.

You see so many people have this attitude of 'its ours', yet spare no thought for the fact that land owners get zero support from the public for the care of and expense involved in holding the land were the gas is held. If you want a share, either buy your own land, or buy shares in the mining companies because at least then you also share the risks.

While I agree that we need to secure adequate reasonably priced gas for Australian consumption, there are a few factors that Aussies are not reminded of.

1 When the gas fields of Aus were developed, the gas supply far exceeded the local gas consumption, and vast plants were built to liquefy and export the excess. The local gas requirements have increased far more rapidly than would normally have been predicted largely due to the shutting of coal fired power stations by state labor governments with no cognisance of the replacement gas requirements.

2 Victorian Labor has banned all new gas exploration, and other states have severely restricted CSG development that could have made up the difference.

3 At the time the long term gas supply contracts were made the price of gas was much lower, and whilst gas prices have risen locally and overseas, the contract price for these multiyear contracts is not very flexible, but not reflective of the spot prices overseas consumers would pay if they were to contract now which would be closer to the prices Aussies are paying now.

The whole point is, you cant set the rules of the game, then shift the goal posts midstream, which is exactly what the government is now trying to do. Future multi billion dollar investments in Australia will be effected by not only this policy, but the mining tax as companies will be very wary of what incompitent governments are capable of in this country, especially when they have their backs to the wall, as is the case now.

First ir was the mining tax, then the gas retention backflip, then the bankers tax grab.

The reality is in the past decade we have gone from money in the bank to zero debt, to a position where a 'trillion dollars' of debt is in the sights, so one has to wonder where the next proposed money grab is going to come from, from governments who are blind sided as to where the real problems are. Immigration, welfare etc.

Don't Worry. I worked last year with a geological engineer who had recently left Halliburton. He had been in the fracking industry for some 15 years with that company.

His predictions were that within 50 years - at the current rate of fracking well drilling, the Earth's water underground aquifers/supplies would be undrinkable. That within 150 years the Earth will be uninhabitable if we keep going at current rates and current technologies.

Something to look forward to ?

Ar Albie Manton in Darwin, the old never let the truth get in the way of a good story.

Are you aware that the CSG deposits sit below the second body of water, not the first where our underground water comes from.

G’day Butch, below info on CSG “fracking” & The Great Artesian Basin.

http://www.appea.com.au/tech-drill/a-deep-look-at-oil-and-gas-wells/

http://www.aplng.com.au/topics/coal-seam-gas.html

http://www.naturalcsg.com.au/industry-operations/drilling-well-construction/

Info on the GAB.

http://www.gabpg.org.au/great-artesian-basin

http://earthscience.stackexchange.com/questions/4466/source-of-water-for-the-great-artesian-basin-in-australia

And the obligatory Wiki reference at:

http://en.wikipedia.org/wiki/Great_Artesian_Basin

Seems the ‘frackers’ are down around the same depths as the Basin, but as the bloke I worked with indicated, the issue of ‘bleeding’ through various strata is not often considered. As the porosity, and other characteristics of rocks under pressure changes in any given scenario. That it has even a remote possibility of polluting a water source should be of concern.