Narrabri gas project has zero book value: analyst
PRIME Minister Malcolm Turnbull is playing into the hands of the gas cartel 'ripping off Australia' by encouraging the NSW Government to approve a controversial gas project in the state's north, according to an energy analyst.
The Prime Minister's comments "strongly encouraging" the Berejiklian government to approve the Narrabri Gas Project are "unbelievable", said Bruce Robertson of the Institute for Energy Economics and Financial Analysis.
In fact, the massive project - which environmentalists say threatens the Pilliga forest - is literally worthless on Santos' books.
"This project is valued at that level because at the moment it has zero reserves of gas," Mr Robertson said.
But Santos is in a life and death struggle over billions of dollars in mounting losses incurred by its gamble on the East Coast gas export industry, particularly its share in one of the three Gladstone LNG "trains" worth a combined $70 billion.
The Gladstone plants and related gas fields came online just as world gas and oil prices went into freefall. There is now a huge global glut which could last years.
And yet Australia is paying through the nose for gas because the cartel - Shell, Santos, Origin, and BHP-Exxon - have pushed up prices by exporting the bulk of domestic gas overseas through Gladstone.
The industry is now desperate for gas - anything, even a gas project which has zero proven reserves.
"What they've got to do is keep feeding the beast," Mr Robertson said.
"In the last result pre-tax (Santos) wrote off over a billion dollars.
"They're basically hoping for a war in the Middle East to get them out of this."
Mr Robertson argues this economic disaster could push Australian manufacturing to the wall in a "second wave" of deindustrialisation.
"According to the ACCC we should be paying $5.30 a gigajoule, and we are currently paying $10.16. We're paying two times what we should be," he said.
"The employment consequences of this are dire. Action simply has to be taken to reduce the costs (of gas) to reasonable levels."
ORIGINAL: MALCOLM Turnbull is acting "like a puppet" of the gas industry for demanding the NSW Government get moving to approve a massive unconventional gas project at Narrabri, according to a local activist and filmmaker.
Northern Rivers filmmaker David Lowe is co-directing a documentary on the controversial Santos Narrabri project, which opponents say will threaten one of the state's most important inland biodiversity islands, the Pilliga forest.
Mr Lowe said the Prime Minister's comments made him appear "politically under control" of the fossil fuel industry despite being a private supporter of renewables.
He said the so-called "gas crisis" had been created by the gas industry themselves combined with successive governments' refusal to enact a gas reservation policy.
"The big gas majors have set up a situation where they're exporting all the gas in order to maximise their profits... (but) they couldn't fulfill their contracts which is why they are now taking gas from the Bass Strait and sending it overseas so everyone is affected," Lowe said.
"They're trying to push this Narrabri project which has massive local opposition.
"Essentially the Pilliga project is uneconomic, and they've said they won't necessarily deliver the gas to NSW, it will probably go overseas.
"It looks like a cynical attempt to force this project on people that nobody wants," Mr Lowe said.
"The whole of the north west has been surveyed and literally everybody in that region has been asked door to door whether they want this to proceed and 96% have said they don't.
"That information has been presented to the local member Kevin Humphries who refused to take it to Parliament."
Mr Lowe said there had also been a record number of 23,000 submissions against the project, from both the Narrabri region and around the country.
Lowe's film Sacrifice Zone, co-directed with fellow Northern Rivers local Eve Jeffery, premiers next month.