The papers are full of stories about Australian companies being gouged and charged top dollar for LNG supplies at the same time as a bunch of international companies extract our gas reserves and ship them offshore to sell in foreign markets for peanuts.
There are even loony ideas circulating whereby we build a new terminal to re-import the gas those companies are selling offshore for nickles and dimes.
Why import what should never have been exported in the first place?
Worst of all some industry clowns are trying to use this massive policy failure and incompetence induced gas shortage as a reason for demanding that every farm gate be forced open and every paddock be made available to the agricultural vandalism of fracking.
The solution is simple and no different to the one required for iron ore.
Set the total volumes nationally of LNG that may be exported and then let industry bid for tradeable licences to part of that volume.
If they dont have an export licence they will be limited to the domestic market.
The only real difference between an Iron Ore NEVA and one for LNG is that the objective for the Iron Ore NEVA is to prevent international miners competing with each other with OUR ores rather simply competing against foreign competition.
Of course we still need to compete with alternate foreign producers like Brazil but it is NOT in Australia’s interest to allow foreign mining companies operating in Australia to drive prices down by competing between themselves in international markets.
With LNG the issue is even simpler – work out how much gas we want available for domestic purposes. Subtract that from a conservative estimate of production capacity – i.e. one that does not require every bit of farmland to be screwed with fracking – and the remainder can be the national export volume for which licenses will be available for purchase via public auction.
No sovereign risk involved at all.
A wonderful free market solution! What better selling point can there be for our ideologically obsessed political classes in Canberra.
If someone tries to suggest that setting a national export volume and auctioning off rights to it is beyond the competence of the national government they are barking mad.
Sovereign risk is just a cloud of bull dust spun by international companies who fear the ‘natives’ are on to their scams.