3 ms·

Australia is a gas supplier to Japan and has headed down the road towards nationalising its gas sector recently, indirectly through local supply mandates and pr

Australia is a gas supplier to Japan and has headed down the road towards nationalising its gas sector recently, indirectly through local supply mandates and price fixing. Exploration projects have been canceled and frozen there in the last week. Japan may feel uncertain about its ability to source gas on the open market.

WalterBright 4y ago
Supply mandates and price fixing. Good ole' central economic planning. What's the inevitable result? Shortages.
- defrost 4y ago
  Errr, in this instance you're exactly arse backwards. The gas supply shortages in the eastern states of Australia arose precisely because of a lack of local supply mandate and price capping baked into the original licenses. Western Australia has such things and had no shortages. The inevitable result (in the West) was a transnational being limited in its ability to price gouge in a global supply crisis.
  - WalterBright 4y ago
    Then there's something else at work here that is not in evidence. For example, were they granted a legal monopoly?
    - defrost 4y ago
      > were they granted a legal monopoly? Err, by "they" do you mean Apache, BHP, BP, Chevron, KufPec, Mitsubishi Motors, Mitsui & Co, Quadrant Energy, Santos, Shell and Woodside Energy ? (ie Australian LNG producers) and by "legal monopoloy" do you mean "A market structure characterized by a single seller" ?
rgmerk 4y ago
This is hyperbole. The Australian government is bringing in a price cap of $12 per gigajoule (well above historical gas prices, and well above long-term contract prices for Australian LNG in Japan) for domestic customers. Whatever the merits of this action, it’s a very very very long way from “nationalising the sector”. The Western Australian gas industry (on the other side of the country on a completely separate grid) has long had a regulation mandating a minimum proportion of WA’s gas must be sold to domestic customers, meaning local gas prices there are unaffected by the global shifts in prices. Heck, that bastion of capitalism, the United States of America, completely banned the export of natural gas and oil until 2015.
kaushikc 4y ago
Many have unaddressed safety concerns that could potentially lead to a disaster. They are exporting at the highest rates while having the local markets vulnerable to the price shocks. https://www.upstreamonline.com/lng/shells-prelude-flng-facility-facing-extended-downtime/2-1-1137211 https://www.upstreamonline.com/lng/shells-prelude-flng-facil...
strangeattractr 4y ago
Source? The Japanese have long-term contracts with LNG producers where did you see the threat of these being impacted by government policy?

WalterBright 4y ago

Supply mandates and price fixing. Good ole' central economic planning. What's the inevitable result? Shortages.

defrost 4y ago
Errr, in this instance you're exactly arse backwards. The gas supply shortages in the eastern states of Australia arose precisely because of a lack of local supply mandate and price capping baked into the original licenses. Western Australia has such things and had no shortages. The inevitable result (in the West) was a transnational being limited in its ability to price gouge in a global supply crisis.
- WalterBright 4y ago
  Then there's something else at work here that is not in evidence. For example, were they granted a legal monopoly?
  - defrost 4y ago
    > were they granted a legal monopoly? Err, by "they" do you mean Apache, BHP, BP, Chevron, KufPec, Mitsubishi Motors, Mitsui & Co, Quadrant Energy, Santos, Shell and Woodside Energy ? (ie Australian LNG producers) and by "legal monopoloy" do you mean "A market structure characterized by a single seller" ?

rgmerk 4y ago

This is hyperbole. The Australian government is bringing in a price cap of $12 per gigajoule (well above historical gas prices, and well above long-term contract prices for Australian LNG in Japan) for domestic customers. Whatever the merits of this action, it’s a very very very long way from “nationalising the sector”. The Western Australian gas industry (on the other side of the country on a completely separate grid) has long had a regulation mandating a minimum proportion of WA’s gas must be sold to domestic customers, meaning local gas prices there are unaffected by the global shifts in prices. Heck, that bastion of capitalism, the United States of America, completely banned the export of natural gas and oil until 2015.

kaushikc 4y ago

Many have unaddressed safety concerns that could potentially lead to a disaster. They are exporting at the highest rates while having the local markets vulnerable to the price shocks. https://www.upstreamonline.com/lng/shells-prelude-flng-facility-facing-extended-downtime/2-1-1137211 https://www.upstreamonline.com/lng/shells-prelude-flng-facil...

strangeattractr 4y ago

Source? The Japanese have long-term contracts with LNG producers where did you see the threat of these being impacted by government policy?