Essay by Eric Worrall
h/t JoNova; Surging wholesale gas prices have claimed a major scalp, catapulting our new climate activist federal government into their first energy supply crisis.
Global gas crunch claims first Australian trading casualty
By Sonali Paul
May 24, 20222:05 PM GMT+10
MELBOURNE, May 24 (Reuters) – A gas seller that supplied 7% of the eastern Australian market has collapsed due to soaring global gas prices, the first significant casualty in the country from the global gas supply crisis due to sanctions on Russia for its invasion of Ukraine.
The Essential Services Commission on Tuesday suspended private gas retailer Weston Energy from the wholesale gas market for failing to meet financial security requirements and said the company’s 184 large and medium-sized customers would be shifted to other suppliers.
The collapse of Weston Energy underscores energy price concerns set to face Australia’s new Labor government, as it pushes to rapidly expand renewable energy to replace gas and coal over the next eight years.
Weston Energy Managing Director Garbis Simonian said gas prices had nearly tripled since the start of the year due to Russia’s invasion of Ukraine, which Moscow calls a “special military operation”.
…Read more: https://www.reuters.com/markets/commodities/global-gas-crunch-claims-first-australian-trading-casualty-2022-05-24/
The Ukraine war might have supplied the final straw, but climate activist state governments have contributed more than their share of gas price pain. For example, in 2021 the Victorian government amended the state constitution to permanently ban fracking.
In the tropical state of Queensland where I live, winter tends to be an inconvenience. I only use gas for cooking, so the price rise doesn’t really bother me. Half an hour switching on a 2KW wall socket heater is enough to take the edge off the coldest mornings.
But for NSW and Victoria, the surge in gas prices means real pain for consumers, many of whom heat their homes with gas. The Southern half of Australia, including the heavily populated East Coast states Victoria and New South Wales, experience long cold wet winters, with very little sunshine. Temperatures rarely drop far below freezing, but the weather is persistently damp and cold. Even in Summer, mild weather can turn freezing cold without warning – Last time I booked a stay in the Victorian highlands it snowed for a week in Summer, which gives you a fair idea of the local climate.
The socialists Australia elected last Saturday will either have a razor thin parliamentary majority, or will be forced to govern with the help of the greens. So it is going to be interesting to see how they balance the need to keep their green allies happy, with the wholesale gas price / winter heating crisis which is developing on their watch.