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Market failure alert! Australian natural gas shortages and our crazy government policies

Amazingly or perhaps, true to type, Australia is experiencing extreme shortages of domestic natural gas supplies. World-wide there is a gas-rush. It also looks like oil is already not keeping up with demand as countries scramble for new more energy costly, polluting and environmentally destructive forms of energy, like tarsands, fracked gas, and sugarcane ethanol. The media is failing to paper over the cracks: Australia looks like a cartoon demonstration of entropy with energy dispersing, the environment overheating, overpopulation and political disorder. And there is nowhere for Australians to escape.

Oil and gas consumption rising of course

According to the BP Statistical Review of World energy, the world's natural gas reserves would last for 59 years if production continued at the 2010 rate (which it didn't of course - it increased by 0.7% in 2011, and Australia's consumption increased by 5.7%, China's by 5.5% and Belarus by 22.8%. You can download historical time lines here.) The BP prognosis for oil is comparatively optimistic. That is probably because BP has over the years added to its definition of crude oil, shale oil, oil sands and NGLs (the liquid content of natural gas where this is recovered separately). That’s a lot of new sources, all of them requiring more energy to extract or transport than that required to harness and package the traditional ‘gusher’ close to the surface, now a rare phenomenon.

Supplies of oil that comes out of the ground from vast reservoirs are actually being drawn down faster and faster, so gas is being called upon to substitute for more and more other forms of energy. While Australia looks to reintroducing coal to substitute for petroleum and exports more and more natural gas, China is substituting gas for coal on a massive scale.

If it quacks like a duck ...

In fact, watching countries scramble for new more energy costly, polluting and environmentally destructive forms of energy, like tarsands, fracked gas and sugarcane ethanol, you sure could be forgiven for thinking that this is a sign that oil is already not keeping up with demand.

And all these new fuels involve trampling democracy on a larger and larger scale. The biofuels cause hideous suffering to animals and are driving extinction through the destruction of habitat. In the mean time various high-tech wars in the Middle East are burning up traditional oil supplies day and night as China, Russia, the US, and Europe, attempt to get power in the biggest oil-reserve regions.

Send in the clowns

You hear governments talking about letting the market have its way and you fear that they say that because they have absolutely no control over what is happening. Because of the tyranny of profit we have more and more desperate attempts to promote business as usual. Policy follows the dollar ... anywhere. Into enslavement, overpopulation and death.

What can one say about the future when leaders all over the world seem to be escalating all our energy and pollution problems or allowing them to escalate because they simply don't know how to stop them?

Martin Ferguson, Federal Resources Minister's energy white paper argues that 'market intervention' should only be considered 'where there is clear evidence of market failure'.

King Kong had nothing on the corporate ape

Free market policy does not make sense in any social welfare or governance way. It only makes sense if you consider that the concentration of power and wealth at global levels has promoted a range of super dominant male apes absolutely ruled by their need to sit on the heads of other apes in human pyramids beyond a level where they can actually comprehend their impact and take responsibility. In the jungle other male apes would simply have beaten these big fat bullies up and removed them. In the global governance and concrete and banking jungle, where money can substitute for muscles, size, brains and agility, nothing can stop them. They can temporarily be brought to their knees financially, but they will just sacrifice lesser apes in order to get back onto the global baccarat table. Even when they die, more take their place, blindly pursuing the same senseless objectives of expansion and dominion. Following the money down a terminal plughole.

Australia already running out of natural gas

As many candobetter.net readers are aware, Australia has for decades now been in the death grip of a voracious housing industry that has major responsibility for pushing up population growth here.

You can tell when the housing industry is going bad when you see the building materials industry is in trouble. Then they start talking down resource prices so that the developers they supply can keep cranking out those houses (incidentally boosting the demand for gas even more - but what does the building materials industry care about the final result? Not a fig.)

Apparently local and international demand has forced the price of gas right up, to triple its 2008 price in West Australia and Queensland. The gas extracting industry is chasing the international dollar, leaving local manufacturing industry without supply.

Brickworks, Australia's largest brick manufacturer (responsible for those houses that cover once loved forests and fields) claims that it has been reduced to using sawdust (in Tasmania) and methane from infills. That is probably a sign of the times. If they would just adjust and downsize, then maybe we could all go home and relax, as the population growth they demand constantly to satisfy their bloated purses would die down in the absence of that demand.

But corporations have to grow, don't you know. So they are in there dividing and conquering, accusing the 'Greens' and environmentalism of causing gas shortages. How do they figure that? Well, Lindsay Partridge of Brickworks says that the shortages that are caused by exporting all our gas are only shortages because Green concerns cause obstacles to total open slather mining everywhere. So, the answer, according to Partridge, is for the government to simply remove all laws preventing mining everywhere, bringing on coal seam gas as well as natural gas.

For reasons not elaborated Mr Partridge also thinks that the supply of natural gas will become abundant towards the end of this decade. For a man who complains that he cannot guarantee supply for the next two years to plan, he is very optimistic about supply at the end of this decade.

Gas is fugitive

Other people worry that the way gas comes out of the ground - very quickly - means that the more you are getting the less time before it is all exhausted. The gases just zoom out into the atmosphere when you take the lids off the earthern reservoirs they accumulated in. There is nothing to stop their natural reservoir from emptying almost immediately unless you can plug and control their escape. It is like undoing a balloon. Natural gas even escapes between the denser particles of pipes as you transport it. These elusive qualities of gas should concern those in power but somehow they seem to remain oblivious.

Martin Ferguson, Federal Resources Minister's energy white paper argues that 'market intervention' should only be considered 'where there is clear evidence of market failure'.

Because Martin Ferguson (the Federal Resources Minister) does not consider that Australia's remaining businesses going out of business is evidence of market failure, he won't regulate gas distribution. Nor will he regulate business and housing rents driven up by population growth (the other reason that business goes out of business in Australia.)

"The role for government is not to step in and intervene but to let those better placed to negotiate a commercial outcome," he is quoted as saying.

We now seem to be witnessing “market failure" to avert environmental damage and in the scramble for ever diminishing energy sources. We may also be witnessing market failure to select technically and humanistically competent politicians.

West Australia reserves the princely portion of 16% of its natural gas production for the Australian market, but NSW and Queensland have no policies to retain any gas for domestic use, according to the Financial Review (See sources below).

It is not surprising if all this makes you feel extremely insecure with respect to future gas availability in Australia - or anywhere.
The media is failing to paper over the cracks: Australia looks like a cartoon demonstration of entropy with energy dispersing, the environment overheating, overpopulation and political disorder. And there is nowhere for Australians to escape.

Click here to Buy PRINT VERSION of S.M. Newman, Demography Territory Law: The Rules of Animal and Human Populations (2013)


When you think that the Australian Aborigines probably inhabited this continent for 40,000 to 60,000 years in a mostly stable population and economy you cannot help but envy them their incredibly long run of luck. They obviously knew what they were doing!

NOTES

Source: Peter Roberts, "Gas crisis looms for industry," Australian Financial Review, Monday 21 January 2013, pages 1 and 4.

Source: Rebecca Hyam,Coal seam protests forcing gas prices up: industry
Jan 21, 2013.