Ed Husic on the money: gas industry profiteering is costing Australians

Ed Husic’s ‘breaking ranks with Labor’ speech in parliament which claimed gas exporters are profiteering from Australians and driving up domestic energy prices, is right on the money and well backed by the data.

Gas exporters have made an estimated $100 billion in windfall profits driven by record‑high prices for Liquified Natural Gas (LNG), caused by the Russian invasion of Ukraine. Global LNG prices surged from around $A550 a tonne of LNG in 2021 to over $A1,100 in 2022.

Despite being the world’s second-largest exporter of gas, since we don’t set aside a small portion of gas for domestic use, local prices are linked to the higher foreign prices. Local prices have been linked to foreign prices since the Australian government approved the exporting of gas from Queensland, commencing in January 2015.

According to data from the Australian Energy Market Operator (AEMO), since gas exports from Queensland started, domestic gas prices have tripled, and electricity prices have doubled. Currently, gas and electricity prices remain at near record highs. Electricity prices follow gas prices because gas-fired electricity generation is often the most expensive form of generation in Australia’s National Electricity Market (NEM). The Government’s design of the NEM means the most expensive form of electricity sets the wholesale price of electricity for all users.

Ed Husic is also right in saying we don’t have a shortage of gas in Australia.

Best summarised by MP Nicolette Boele as “we do not have a gas supply problem, we have a gas export problem.” According to data from the Department of Climate Change, Energy, the Environment and Water in Australia, 83% of all gas extracted is used for export. Over the last five years, gas exports have been enough to supply domestic users for 22 years.

Finally, Ed Husic also nails the simplicity of the solution: “Our gas, our prices”.

A simple way to achieve this would be the ACTU’s proposal for a 25% tax on gas exports. This would keep a greater share of Australian gas in Australia, greatly lowering gas and electricity bills for Australian households, and perhaps, save what’s left of the Australian manufacturing industry.