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Who owns Australia’s gas?

DOES AUSTRALIA ACTUALLY OWN ANYTHING ANYMORE?

Australia was the world’s biggest exporter of Liquefied Natural Gas in 2021.

So why are we now paying more for our gas than overseas buyers?

More importantly, why are we faced with a crippling gas shortage?

Ask the Queensland Government.

The days of enjoying some of the cheapest gas prices in the world ended when our Government began exporting LNG back in 2015.

Seems LNG exporters have not just been exporting our coal seam gas reserves offshore, but gas from conventional sources as well.

Companies like Esso and BHP Billiton have reaped a windfall from the practice, while domestic households and industry gas users have been left to compete on price with foreign-owned LNG exporters needing to fill their overseas export contracts.

The Queensland Government should have taken a leaf out of the Western Australian Government’s playbook.

It wasn’t stupid.  It passed a law requiring LNG exporters to ensure that 15 percent of liquefied natural gas (LNG) was reserved for domestic use.

This has kept gas prices in WA much lower than those on the East Coast and ensured a secure domestic supply for West Australians.

Over on the East Coast, however, we are hearing of various proposals for building multi-million dollar gas import facilities – presumably to import back what we sent offshore at 100 times the cost.

Just to add insult to injury, a new report shows that virtually all Australia’s gas projects, producers and facilities are now foreign-owned.

The Australian Institute researchers, who had access to the Bloomberg Professional Terminal database, has revealed the extent to which foreign ownership has been grossly under-counted in official figures.

Not only are companies like Shell and Chevron 100 per cent foreign-owned, but so are many supposed Australian companies like BHP, Santos and Woodside.

BHP is actually 94% foreign owned and 82 per cent American owned.

So a more accurate description for BHP, nowadays, would be the “Big American”.

Four LNG Export Projects – Prelude, Ichthys, Gorgon and Queensland Curtis LNG – are 100% foreign owned.

Even the least foreign-owned, Pluto, is 84 percent foreign owned.

The report calculated the average foreign equity share by project capacity is 95.7 percent, with Australia’s share, a measly 4.3 percent.

These foreign-owned gas companies are all funneling their profits to owners overseas, and paying little to no tax on any of it here.

Worse, offshore LNG projects are only subject to a petroleum resource rent tax, not Commonwealth royalties.

Something which analysts say has cost Australians billions of dollars in lost revenue per project.

LNG Export Companies 95.7% Foreign Owned: Research Report

 

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Will America run out of oil?

THE END OF SAUDI AMERICA

Sobering news from yesterday’s Commodities Global Summit in Lausanne, with many oil market experts predicting crude oil could hit as high as $250 a barrel this year.

Most see the ban on Russian oil as long-term and potentially leading to a “crude supply shock”, which could devastate the global economy.

“Wakey, wakey” one told attendees.

“We are not going back to normal business in a few months”.

“I think we’re losing the Russian supply on the European side, for ever.”

Others said the ban meant as many as 3 million barrels a day of Russian oil could be lost to the market permanently.

The Head of oil and gas at Standard Chartered said:

“You now have to deal with this as a long-term issue which means YOU NEED TO FIND AN ALTERNATIVE SUPPLY.”

Easier said than done.

As the guy from Houston said, don’t expect the US shale oil industry to be riding to anyone’s rescue.

“The cavalry is not coming” he said firmly.

Why? Because it’s starting to look like the end is nigh for America’s fracking companies.

Less than 4 years after the ‘shale revolution’ reinstated America as the world’s No 1 oil producer, companies in Texas, New Mexico and North Dakota are now saying most of their best wells are tapped.

According to a recent Wall Street Journal review of the US oil and gas inventory, even if shale-drillers kept their output roughly flat, as per 2020 levels, many companies could only continue drilling profitable wells for a decade or two.

If they boosted production 30% to pre-pandemic levels, they would run out of prime drilling locations in just a few years.

So, anyone hoping America will ride to the rescue and suddenly start drilling like crazy to bring up all this shale oil and fix the world’s supply problems, is ‘dreaming’.

According to WSJ, they might be able to do that for 3 or 4 years, but after that they would run out of good core acreage.

There would still be some marginal acreage left, but essentially, the US shale party would be over.

So instead of trying to bail the EU out, the Biden administration should be thinking about what the US will do once its shale oil runs out.

Because if America runs out of oil, then we really will see a “Great Reset”.
And the America that emerged from that wreckage, would bear little resemblance to the one that exists today.
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