Nicolette Boele and Ed Husic would like gas companies to stop ripping us off

The Member for Bradfield has garnered unlikely allies this week, calling on the government to export less of our gas in order to reduce domestic prices. 

Labor’s Ed Husic, representing the Western Sydney seat of Chifley, broke ranks from his party on Monday, speaking in support of Nicolette Boele’s motion, which he regarded as “not a radical proposition”. 

What happened: The motion brought forward by Boele states that south-east Australia is at risk of running low on gas as a result of selling too much of it overseas. 

• Rising energy prices have been a significant issue for many Australians. According to the Australian Energy Regulator, gas prices have tripled in the last decade. 

• As a result, Boele has called on the government to tighten industry regulations, so that if gas is extracted in Australia it must be offered to Australians first — at a “reasonable price” — before any of it is sold overseas.

What is reasonable: When asked to clarify what a “reasonable price” would look like, Boele told the Lorikeet that gas prices should reflect “genuine supply-and-demand conditions in Australia - not inflated prices caused by opaque contracts or export-driven distortions.”

Husic supports: Splitting from the rest of his party, Labor’s Ed Husic spoke in support of Boele’s motion, saying “we cannot tolerate being lectured to by overseas buyers telling us what we can do with our gas”.

• “We should be an energy superpower, and that should translate to economic strength,” said Husic.

Husic’s move is not entirely unprecedented: In his previous role as the federal Minister of Industry, he was highly critical of the gas sector, which he labelled as tone-deaf and greedy. 

Husic has also previously broken ranks with his party earlier this year, when he called for recognition of a Palestinian state in July.

Are Australians getting ripped off on gas? Short answer: Yes.

• Our massive expansion of gas exports in 2015 has coincided with significantly higher wholesale prices for gas. 

• Kevin Morrison, from the Institute for Energy Economics and Financial Analysis told the Lorikeet that these two shifts are directly linked. 

🗣️“Go back to what the gas price was just before we started exporting in January 2015 and it was roughly around $3 to $4 [per gigajoule], right?” Morrison said.

Since then, Morrison claims, these figures have tripled. 

Why have prices risen? Prior to 2015, Australia exported relatively little gas. In January of that year, we approved the construction of gas export terminals in Queensland, allowing our gas to be sold on the international market, primarily to Japan and China. 

• “Countries like Japan, they don't have any of their own gas, so they’re prepared to pay a premium for it.” Morrison said. 

These higher international market prices drove domestic prices up. If other countries are willing to pay a higher price, companies have little incentive to continue offering Australians the same prices.

Aren’t we ditching gas? While Australia is moving toward a net-zero economy, gas still has a role to play in that transition, according to the Clean Energy Council. 

• The Australian Energy Market Operator has stated that as we shift toward renewable energy, and coal-fired power stations shut down, gas will play an important role in covering seasonal gaps of energy supply.