Australia's gas producers have avoided a repeat of the price gouging seen during the Ukraine war, despite global energy market turmoil. This is due to a combination of factors, including a change in community attitude, the prospect of higher taxes, and a new gas reservation policy. The three east coast gas giants, led by Origin, Shell, and Santos, have almost total market control, but they are now walking on eggshells due to these new pressures. The ACCC notes that these giants influence almost 90% of east coast gas reserves, and their actions during the Ukraine crisis contributed to higher domestic wholesale gas prices. The introduction of a gas reservation policy, designed to ensure Australians have access to their own gas supplies, has further rattled the export giants. This policy, coupled with the potential for a windfall profits tax, has led to a sharp decline in gas prices, from $12 per gigajoule to around $10.40. European gas prices, on the other hand, have soared, with some countries seeing prices more than double. The impact of these price fluctuations has been felt across industries, with power-intensive sectors like plastics and glass production, as well as agriculture, suffering. The urea plant on Gibson Island near Brisbane, for example, was forced to shut down due to soaring LNG prices, leaving Australian farmers dependent on imports. The federal and West Australian governments have responded by investing in a new domestic urea processing plant in the Pilbara, which will require increased tax-raising measures. Resource companies, including gas exporters, are gearing up for a potential anti-tax campaign, arguing that any measures will raise sovereign risk and force operators offshore. However, the article questions where these companies would go if they were to leave Australia, suggesting that the country's self-reliance and reliable partners may be a more sustainable approach in the face of rising geopolitical instability.
