Daily Bulletin


The Conversation

  • Written by Michael Hopkin, Environment + Energy Editor, The Conversation

The federal government has pledged to bring in legislation that would allow it to restrict gas exports and force Australian producers to reserve supplies for domestic consumers, amid continuing fears of an east coast supply crisis.

The move comes after the apparent failure of crisis talks earlier this month, aimed at easing the forecast price squeeze.

But experts are split on whether domestic gas reservations are a wise move. In a survey of 32 economists by Monash Business School and the Economic Society of Australia, 38% agreed with the following statement, whereas 47% disagreed.

In response to energy shortages around Australia, government policies requiring gas producers to reserve some production for domestic consumption are a good way to ensure that Australian consumers have access to sufficient gas supplies while still allowing for gas exports.

Weighting the scores by confidence pushed the balance even further towards a negative verdict, as shown below.

David Prentice, principal economic adviser at Infrastructure Victoria, who summarised the results, said the forthcoming gas supply problems had “raised a lot of concern” as Australia heads into winter.

Lucrative export contracts have sent huge amounts of Australian gas overseas, meaning it is now cheaper to buy Australian gas in Japan than in Australia.

Western Australia already has a domestic gas reservation policy aimed at holding local prices in check amid a boom in liquefied natural gas (LNG) exports. But Prentice said many of the economists arguing against a similar policy for the eastern states feared that it would distort the market, pushing gas prices artificially low.

“A common theme in many of the arguments of those that disagree with the policy is that the appropriate response to rising gas prices overseas is to let the domestic price rise and firms and households work out the best way to adjust to higher prices – that is, let the ‘invisible hand’ work,” he said.

In contrast, several of those who favoured the policy argued that higher prices could pose a risk for many consumers, such as businesses that may struggle to compete internationally if their gas bills are too high.

Read the panel’s full responses below.

The ESA Monash Forum is a joint initiative between Monash Business School and the Economic Society of Australia.

Authors: Michael Hopkin, Environment + Energy Editor, The Conversation

Read more http://theconversation.com/economists-split-over-turnbulls-plan-to-reserve-gas-for-australian-customers-76790

Writers Wanted

StickyWilds Casino Review

arrow_forward

Guide to the classics: Rebecca by Daphne du Maurier — gender, gothic haunting and gaslighting

arrow_forward

Food, tools and medicine: 5 native plants that illuminate deep Aboriginal knowledge

arrow_forward

The Conversation
INTERWEBS DIGITAL AGENCY

Politics

Prime Minister Interview with Kieran Gilbert, Sky News

KIERAN GILBERT: Kieran Gilbert here with you and the Prime Minister joins me. Prime Minister, thanks so much for your time.  PRIME MINISTER: G'day Kieran.  GILBERT: An assumption a vaccine is ...

Daily Bulletin - avatar Daily Bulletin

Did BLM Really Change the US Police Work?

The Black Lives Matter (BLM) movement has proven that the power of the state rests in the hands of the people it governs. Following the death of 46-year-old black American George Floyd in a case of ...

a Guest Writer - avatar a Guest Writer

Scott Morrison: the right man at the right time

Australia is not at war with another nation or ideology in August 2020 but the nation is in conflict. There are serious threats from China and there are many challenges flowing from the pandemic tha...

Greg Rogers - avatar Greg Rogers

Business News

What Few People Know About Painters

What do you look for when renting a house? Most potential tenants look for the general appearance of a house. If the house is poorly decorated, they are likely to turn you off. A painter Adelaide ...

News Co - avatar News Co

Important Instagram marketing tips

Instagram marketing is one of the most important approaches for digital advertisers. If you want to promote products online, then Instagram along with Facebook is the perfect option. After Faceboo...

News Co - avatar News Co

Top 3 Accident Law Firms of Riverside County, CA

Do you live in Riverside County and faced an accident and now looking for a trusted Law firm to present your case? If yes, then you have come to the right place. The purpose of the article is to...

News Co - avatar News Co



News Co Media Group

Content & Technology Connecting Global Audiences

More Information - Less Opinion