Essay by Eric Worrall
“… Australia has a wealth of coal and gas resources as well as renewable energy, so why are energy costs so high …”
Rich in resources, but Australia’s energy costs have tripled and manufacturers are hurting
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“[The US is] pro-manufacturing, they’ve got cheap energy, they’ve got good gas supply and reserves. It’s one of the most attractive markets to invest today,” he said.
Mr Gandhi said one solution to the problem in Australia is to increase the supply of gas.
But it is already too late for many Australian manufacturers.
“If you start investing today it takes three to 10 years to bring on new gas resources … [and] manufacturers won’t survive [that long],” he said.
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Plastics manufacturer Qenos went into administration last year blaming the lack of a reliable supply of gas and rising costs.
…The federal government did not respond to the ABC’s questions about a decision, but a statement from a spokesperson for Energy Minister Chris Bowen blamed the coalition for the gas shortfall.
…Bruce Robertson, a former stockbroker and fund manager who is now an independent energy consultant, said Australian manufacturers were “bleeding to death” due to high energy costs.
He blamed the gas export companies operating the export terminal in Gladstone in Queensland.
…Liam Wagner is an associate professor at Curtin University’s Institute for Energy Transition, researching new technology in electricity markets and how gas prices work in the eastern states.
He thinks manufacturers should focus on alternative fuels like hydrogen rather than hope for government intervention.
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Read more: https://www.abc.net.au/news/2025-01-13/gas-energy-costs-threaten-manufacturing/104788984
The fact that nobody in government or academia seems to understand the problem, let alone have viable ideas for solving it, is bad news for what is left of the productive sectors of Australia’s economy.
Imposing a gas reserve or export quota on gas companies would at best buy a few years. Gas companies would respond to the increased risk of damaging government intervention by redirecting new gas field development elsewhere. Why should gas companies gamble on Australia’s hostile energy regulation landscape, when they can participate in Trump’s energy renaissance?
As for hydrogen, I’m not going to bother answering that one. Feel free to ask other WUWT commenters why hydrogen is a bad idea, if you genuinely believe this is a possible solution.
Packing up and relocating to the USA or Asia might save some businesses. Though given the growing string of bankruptcies, it may already be too late for many of them.
Update (EW): One of Quenos Plastic Manufacterer’s plants was in Melbourne, Victoria. Quenos relied on gas from Altona Refinery, an adjacent oil refinery. The oil refinery shut down in 2022. This is triggering a cascade of closures of adjacent businesses which piped gas or other petroleum products directly from the refinery, including Quenos.
The Victorian State Government could have acted to ensure a plentiful gas supply for businesses like Quenos, but instead of trying to help industry, in 2021 the Victorian Government added a permanent ban on fracking to the state constitution. This hostile regulatory act likely convinced Quenos and businesses like it there was no hope for a profitable future, which may have been a factor in their decision to close.
When I first read “Atlas Shrugged” I thought the description of cascading industry failures in the book breathed real life into the plot. Now I am seeing it play out in real life.
At some point people will realize that the prices aren’t high, its because the money is worthless.
yeah, but do they have abundant sunlight???
MAGA is pretty simple to execute.
With no footing except in French support, Clement’s papacy would have vanished like smoke, and the ruinous schism brought to an end, if the French had made that their object. But they did not. To admit error and cut losses is rare among individuals, unknown among states. States function only in terms of what those in control perceive as power or personal ambition, and both of those wear blinkers.
Barbara W. Tuchman A Distant Mirror, the Calamitous 14th Century 1978 p. 459
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Australia’s current government is doing their best to emulate the French court in the 14th century in virtually every policy area and, particularly, the energy sector.
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Tuchman’s observations of the typical behaviours of State players can be found replicated in every edition of the Australian media (except for the ABC)
“He blamed the gas export companies operating the export terminal in Gladstone in Queensland.”
Well,there is somebody getting it right. Gas goes to the highest bidder, which is the export market. If you can’t match that, then no gas for you. And finding more gas won’t change anything. It will still be exported unless locals pay the export price.
Moving to the US might work for a while, but Trump is determined to boost LNG exports, which will replay the same sequence..
Is there any developed country where the electricity prices have not risen to high levels since the push for “renewables” started? No. End of discussion.
My Australian friends swallowed CAGW hook, line, and sinker at the beginning.
It is bloody hard to change their minds. Stubborn as a Galah they are.
More proof that their ABC is worthless and yet it consumes $3.3M per day.
The reason is staring them in the face but they are too moronic to appreciate it. Blinded by TDS and captive to the same globalist carp that drives their BoM and their CSIRO. All three organisations. ABC, BoM and CSIRO are working against the interests of Australia.
Dutton has the appearance of growing a pair but barely visible. I would prefer Abbott and Credlin front and centre in the policy arena.
The confiscation and destruction of the means of production is the purpose of Marxian and Fabian communism. Suffering is meant to increase, not be alleviated. This allows “Labour” to stab workers in the back, elected governments to strip farmers of their land, animals, seed, and fertilizer, bureaucrats to kill off non-productive (everyone) classes and groups, the legal system to undermine law and order, and intelligentsia and party nomenklatura to foment general violence and destruction. It will stop when a perfect communism appears. California, Australia, and formerly Great Britain ain’t seen nothin’ yet.
Ayn Rand was being gentle.
The recent abandonment of gas exploration in the Otway Basin Victoria is typical example of how green groups have nobbled gas projects in Australia, that together with Labor governments’ bans on hydraulic fracturing.
If the Greens get anywhere nearer to power in the forthcoming election it’s ‘lights out’.
The same as I’m saying the EU economy is beyond the turning point. If they want to save something they need to build coal and gas powerplants immediately. In best case this will take 5 years but realistic speaking it will them much longer, they have no sense of urgency. You can’t keep blaming it on ignorance, even Bob around the corner understands that energy is everything.
I’ve thought about your last comment about seeing “Atlas Shrugged” in real life. But this is more stupid governance crushing Atlas who is still fighting hard to make things work. When Atlas shrugged, just think what things will look like.
“Wind and solar are free!” — Nick Stokes
Hydrogen is not a “alternate fuel.” It’s production is a net energy sink. It take more energy to produce it than it delivers.
nobody in government or academia seems to understand the problem
Didn’t the problem start with the introduction of “renewables”?
I used to work with a cutting tool manufacture in Victoria, but they had to pull out of US when Ford reduced operations. It got too expensive for them to expand into a world market.
Very nice Eric. This is a prime example of why government should not be involved in energy production or transmission. They are not held accountable, they don’t suffer the pain of their crappy policies and if their programs don’t pan out they create mandates to change our behavior and double down on the spending of the failed program. If they were a private enterprise they would have to change what they are doing or go out of business. Government just sucks at this kind of stuff, get them the hell out of the energy business.