AUSTRALIA will be the biggest loser among liquefied natural gas
exporters if US LNG production takes off in a meaningful way, with more exports
displaced than any other nation because of the high costs of building new
projects.
The finding, in a Deloitte report commissioned by US LNG proponent
Cheniere Energy, comes as global engineering contractor KBR - a leader in West
Australian projects - says work on US LNG projects is starting to grow as work
in Australia dwindles because of surging costs.
The Australian reports if a substantial amount of US LNG is exported to
Asia, it could displace the equivalent of one $20 billion project in
Australia..
KBR chief executive William Utt said price hikes in Australia meant
opportunities for his company were falling.
The nine million tonnes a year of potentially displaced Australian LNG
production would be the same amount as the $US20b Australia Pacific LNG project
in Gladstone is aiming to produce.
My Comment: The Australian industry claims it has contracts in place (including the burgeoning CSG/ LNG industry in Central Queensland) so time will tell if these will be honoured when cheaper shale gas is available from the US and probably other overseas competitors. Or will a cash strapped government be called on to prop up the expensive new process here, which is battling controversy on many fronts, mainly environmental issues?
The US has a significant LNG production which to date is used largely domestically. Diverting even a small part of this production to export would have to have an impact on world markets. CSG reserves are being discovered throughout the world including one of our largest potential markets, China. I would think it highly likely that the contracts signed for the sale of Australian LNG into international markets are a long way behind schedule for delivery which depending on how the contracts are written may allow customers to walk away from them & source LNG from elsewhere
ReplyDeleteWho knows what will happen in the fairly near future. America wants to be a bigger player in world supply. They will probably be subsidised like their Agriculture. China will probably use the bulk of their own gas because they can simply pipe it to their industries and not have to process, load and unload ships. Labour is also way cheaper than it is here.
DeleteAfrica is supposed to have some of the largest reserves in the world and they are also working at coming on line.
Workers there get paid a pittance which will make their gas much more attractive than ours.
The LNG projects here are over a year behind now and costs are escalating.
APLNG will not be laying pipes through the Gladstone area for up to a year where they were previously supposed to be almost here now. This costs more money and if some of the other countries come on line many workers may go back overseas to the other projects putting more pressure on the LNG here.
One of the main problems with the LNG industry is that the GPC and their Govt comrades decided, without adequate planning or study to build an LNG industry where it clearly does not comfortably fit.
Instead of calling for expressions of interest and selecting the most suitable (If that is possible) candidate they wet themselves with excitement over the number of interested companies. Their over inflated egos and greed kicked in and they decided to shoe horn them all into the harbour.
This meant destroying all of the area that they have and to get rid of the dredge spoil (which the Govt and GPC studies apparently say is so clean you could eat and drink it) so they filled in 6 square kilometres of the inner waterway beyond the existing harbour and commenced dumping millions of tonnes more into the edge of the reef.
Sometimes they have an "accident" and drop it ouer the reef but don't worry it is probably cheaper to pay the pittance of a fine than take it all the way to the dumping grounds. The intention is to create more than 20 linear kilometres of wharf area within the now extended harbour.
Are so many LNG plants going to survive if America, China and Africa come on line at a cheaper rate than we can produce.
The entire thing has been overkill from the start. Sure some are making big money but for how long and how will they be able to meet their commitments on the big flash houses that they have purchased based on the inflated (and temporary) wages that they are now getting. They are not going to get the big bucks forever. Ask the truckies who were put off at a moments notice without warning.
Who is going to clean up the mess if it all goes pear shape. You can guarantee that it will not be the GPC or the Govt. They will just pack up and move on.
Based on the BS about floods 2 years ago still causing illness in marine animals and fish, if the wheels fall off and they crash, they will argue that the wheels have not fallen off, that they are just missing because they have to change the tyres but the new tyres will never arrive.
Haha some good analogies there Peter. I agree, contracts are no real guarantee when push comes to shove and UNESCO is still watching with great interest as a start has not been made yet on their recommended international-standard investigation into Gladstone Harbour.
ReplyDeleteI wonder where the Qld Resources Council conduct their surveys.
ReplyDeleteQld Resources Council claims that 80% of the State backs mining.
They are planning a rebellion against State Govt's quarantining of land away from mining including strategic cropping laws that protect Queensland's vital food and fibre farmland.
They issued a warning to Environmentalists and the State Government that it has public backing to continue mining expansion in Queensland. This is the link to the story in the Courier Mail
http://www.couriermail.com.au/news/queensland/tradies-will-lose-out-as-fluctuating-coal-fortunes-puts-at-least-1000-mining-jobs-at-risk-this-year/story-e6freoof-1226557732535
Not only where they conduct their surveys but how they ask their poll questions.
ReplyDeleteHere is an earlier article that indicates that Strategic cropping land has been put up for review by the state government.
http://www.kondiningroup.com.au/StoryView.asp?StoryID=795111487&ns=LeadStory
One thing favouring the competitiveness of our CSG reserves is that they require much less intensive fracking than do the US shale gas reservoirs. And in any industry where capex costs are huge and much, much larger than ongoing operating costs, relative wage rates are less significant. But not irrelevant, and workplace behaviour (strikes, bans etc) are always important.
ReplyDeleteNone of which is an argument against the way dredging and other related development is going on at Gladstone, or the rights of property owners for the protection of their assets, and fair reward for gas extraction, I assure you!
Cheers al
The local producers have admitted their production costs are comparatively high, Al. It's not just fracking, it's how to deal with the water and contaminants including high salt content, then the pipeline construction costs involving the longest, biggest diameter pipeline to get the gas over 500 km to the LNG plants on Curtis Island (Australia could not supply the big 42-inch diameter pipes being used and problems have been experienced welding the Chinese pipe imported by one of the main gas companies, QGC), then there are the high wages, plus strikes over safetyy issues and even travel time on ferries etc which the Yank construction contractors are not used to.
ReplyDeleteDale might know more about how the pipe laying is progressing in his neck of the woods but there were a lot of problems experienced last year.
Should add that the strikes over safety issues and travel time on ferries involve workers on the Curtis Island plants. I don't know if there are any similar issues on the pipeline construction work.
ReplyDeleteBelow is a copy of an email that I sent to the Qld Resources Council this morning requesting specific answers to a number of questions about the Survey that supposedly states that 80% of Queensland supports the resources Industry and expansion of that industry.
ReplyDeleteSome of the questions supposedly asked start with the words, "some people have said" but they do not qualify who the people were "who said" what ever they were referring to.
The answers to my letter are supposedly contained in this link.
https://www.qrc.org.au/_dbase_upl/SOS_December2012_web.pdf
Nothing in this linked document answers the specific questions that I asked and so it remains very unclear just where the survey was conducted and who was actually surveyed.
It seems that it may have been conducted in a very small number of locations so I will be trying to contact the organisation that supposedly carried out the survey to see if I can get more details that will reveal where and who was surveyed.
The letter to QRC.
Good Morning,
My name is Peter Neilsen and I would like to have the following questions answered.
I read in the Courier Mail yesterday that QRC has conducted surveys that reveal that 80% of Queensland backs mining and apparently the expansion of mining.
Could you please supply the following information.
What were the actual questions asked in the Survey?.
When was the Survey conducted that showed this result?
Where was the Survey conducted?. Was it online, phone canvassing, street survey or other methods?.
Could you give a breakdown of how many people were surveyed at each location surveyed and what were the percentages recorded at each location, for or against the question of approving of mining and expansion of mining.
What were the actual locations?. Was the survey taken over the whole State and why were the locations surveyed chosen for attention and where exactly in the State were these locations?.
Were all sections of the State involved, including the Mining sector, Agricultural areas, Rural and Regional, Tourism areas Town and City dwellers with no connection to resources areas throughout the State?.
Were any Indigenous communities included in the Survey?.
Overall what was the result in urban areas compared to those in rural and Regional areas and what percentage of participants would you say were in Urban compared to other areas?
Was the survey conducted by the QRC or was it taken by a research organisation on behalf of the QRC.
I am an Aged Disabled Pensioner with no membership or affiliation to any party or Environmental organisation and my only interest is in establishing how surveys such as yours and others are carried out.
Kind Regards,
Peter Neilsen,
22 Gladstone Street, Mt Larcom, Qld. 4695.
ph 07 4975 1583 Mob 0419/ 652 313.
neilsenpeter@mac.com
Excellent letter, Peter. Good luck with pursuing a result!
DeleteCheers al
So far I have found out that the survey involved 10 unnamed Community Focus Groups from Central Qld, Darling Downs and Brisbane and supposedly supported by a "Statewide telephone "survey if 1500 voters but there is no indication yet of just where in the state they came from.
DeleteAlso trying to find out who the "some people say" is who were used in the survey. They could have been locals or overseas backers or they are so ambiguous that they could have been imagined like in the first question where one of the qualifications for answering was in part "EVEN IF IT IS JUST A SLIGHT LEARNING OR GUESS"
Never heard this used as part of a survey question before. Will post answers if they ever arrive.
Alan Kohler in the Business Spectator - Gas supplies are a big fracking deal
ReplyDeleteKohler too is worried about Australia missing the boat to take advantage of cashing in on our cash reserves.
"Algeria was already struggling to attract new investment because of rising costs, and security requirements will now increase costs even more.
Australia needs to be very careful something similar doesn’t happen here, for entirely different reasons.
Gas producers and users are now openly squabbling over the availability and cost of gas in Australia.
....This morning the chief executive of the Australian Petroleum Production & Exploration Association, David Byers, responded that the problem is a lack of gas caused by over-regulation. There’s plenty of gas, he says – 819 trillion cubic feet of reserves against 1.8 TCF in total domestic and export consumption – the problem is developing it.
What he didn’t talk about was fracking, but he should have. Accessing oil and gas in tight coal and shale formations by hydraulically fracturing the seams has led to a massive increase in energy supply in the United States."
Later in his column Kohler uses this term, "amazing technique of hydraulic fracking."
http://www.businessspectator.com.au/bs.nsf/Article/Australia-coal-seam-gas-market-pd20130122-46RF8?opendocument&src=idp&utm_source=exact&utm_medium=email&utm_content=167808&utm_campaign=kgb&modapt=commentary
Oh come on does he know what he is talking about!
cash reserves should read gas reserves
DeleteDear Mr Neilsen
ReplyDeleteThe focus groups for Central Queensland and Darling Downs were drawn from towns in the regions identified under the state’s statutory regional planning proposal.
http://www.dsdip.qld.gov.au/regional-planning/
The recruitment and interviews were conducted by respected consultants Crosby Textor. QRC had no input into the locations or make-up of the focus groups.
The 1500 people polled statewide by telephone included those living in both regions above alongside a representative cross-section of Queensland rural, regional and metropolitan voters. Public opinion polling in Queensland (e.g. Galaxy, Morgan) is traditionally based on a 800 interview sample, so the standard acceptable margin of error was reduced for this exercise. Polling for QRC by the UMR research group in 2010 and 2011 showed results remarkably consistent with those obtained during this exercise.
The style of questioning is consistent with professional practice in encouraging commentary on issues that may not be top of mind. Not teasing out an opinion would inevitably result in the ‘do not know’ column being the largest category.
*******************************************************************************************
This is the latest that I have received regarding the 3 question survey that supposedly determined that 80%of Queensland supports the Mining and resources Industry and agrees with expansion of that industry.
The Qld Resources Council are using this information in their drive to have lands used for food and fibre protected by the Govt from mining etc freed up for mining because they claim that to not free up these protected lands will jeopardise the future wealth of the country or I think, probably more likely jeopardise the future fortunes of the overseas billionaires and foreign Govt companies that are being allowed to not only come in and mine the guts out of the country and destroy the GBRWHA to build the "super ports" but to also buy as much of our food and fibre producing lands as they can get their hands on with the help of the Federal and State Govts.
I am rather amused by the last 2 lines of this letter where they claim that "BY NOT TEASING OUT AN OPINION WOULD INEVITABLY RESULT IN THE "DO NOT KNOW" COLUMN BEING THE LARGEST CATEGORY.
At least it would be a more honest result if it was declared that those polled declared that they did not know.
Well at last we know why pollsters load the questions that they are asking. It is not to get a genuine result but to get the answer that they want.
I wonder how much "teasing out" certain people in Gladstone use to get the bogus results that they do.
Someone must be doing a lot of teasing of the weather bureau etc to get the result that the sick fish are still feeling the effects of the floods over 2 years ago.
Yeah well the way it's been raining we may get another "fresh" in the rivers and they will make the same crazy claims all over again - anything other than admit dredging is to blame.
ReplyDeleteoh no - We don't want you know who with all his cherry - picked, narcissistic, biassed, wiki -led crap here!
DeleteCheers al
Hi Al, yes we all know who :0) But while he is full of the contents of old septic systems, the authorities including the GPC, DEHP, Fisheries Qld etc will peddle the same old line and they won't have to rely on a two year old event. Almost 12 inches of rain here now and still pouring down ...
ReplyDelete