Reserving gas for domestic users would hurt the renewable energy industry

The reserve our gas campaign may have populist appeal, but if it were successful it would only have a marginal impact on gas prices in Australia

This week, in response to the opening of the eastern liquefied natural gas (LNG) market to exports, the Australian Workers Union (AWU) has launched a campaign for the government to reserve an amount of LNG for local producers and households. But while such a populist policy may have a marginal impact by lowering gas prices, it would do so by subsidising inefficient industries and reducing incentives for renewable energy.

Back in March, I wrote how the opening of the eastern gas market to the world through the Gladstone port facility would increase gas prices for those living in the eastern states. So it was, with a bitter sort of validation, to receive a letter from my gas supplier in June that from 1 July 2014, there will be a 14.5 per cent increase in ACT gas prices. The reason given was the increasing influence of international markets on Australias gas prices.

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