firstly in 30 years gas demand might be falling off a cliff or already dead.Queensland coal seam gas:
Total discovered technically recoverable gas = 66,955 PJ
LNG plant requirements over 30 years at full capacity = ~47,000 PJ.
Queensland domestic use over 30 years = 9400 PJ
All looks OK then?
Trouble is the detail with 25,300 PJ of that gas being uneconomic to extract according to the data provided to government. That cuts the total available to 41,665 PJ of which about 15,170 PJ has been extracted thus far with 26,495 PJ left to extract, presently being extracted at a rate of 1550 PJ per annum.
Those figures are all from Geoscience Australia (Government) ultimately sourced from the industry. Plus I've added in actual production since publication of those figures.
There's also the diversion of gas from Qld to other states via Moomba which adds to demand on Qld reserves. Doable at present but it relies on the "excess gas" being available in Queensland.
I'll leave others to add the numbers up there, based on whatever assumptions you choose, but suffice to say there's a reason for all the posturing going on. It's a game of musical chairs and nobody wants to lose.
A key issue there is timing and that shareholders and energy planners take a radically different view there. Shareholders and company boards might be thinking of their own investment horizon or their own tenure with that company and looking 5 or 10 years ahead. Energy planners and contract negotiators however are looking very much further ahead, in some cases through to the 2070's, and that explains the different perspectives. Nobody on that side is looking a year or two ahead, not when they're making 30+ year commitments to plant that requires gas to operate.
This chart sums up the overall position across all eastern states (including SA) including gas demand for export:
View attachment 170700
Source = ACCC
The "excess gas" referred to is simply that above the red line, above the contracted LNG exports. Noting that according to the LNG producers themselves, that uncontracted volume is negative from 2029 onwards. Or in simple terms supply falls short of demand. This doesn't change the physical need to send gas from Qld to Moomba to meet southern demand.
Putting the details aside, it's pretty straightforward and this is the bit of relevance to the thread. Australian buyers of gas, those wanting volumes that are above retail quantities (eg power generation, heavy industry) are finding it extremely difficult to do so. They issue a tender and these days it's pretty common to receive very few offers to supply at all, and none at an acceptable price. That's the issue of relevance to gas consuming businesses and the thread subject - the inability to obtain gas at a suitable price or even at all. All the rest, the reasons why, are really just background detail in that sense but it's price and availability, or the lack of it, that counts.
Those trying to contract gas beyond 2028, that is take volume away from the contracted exports, are finding it very hard to do so at all, and even harder to do it at an economical price. That's the crux of it. Even harder for those trying to get contracts running well into the future.
The key however, noting the thread is bankruptcies not geology, is the ability to get this tied down contractually.But, We have Beetaloo being connected to the grid soon too, and more will be discovered in Queensland, PNG is also possible in the future.
well there is a meeting tomorrow ( at FBU ) and there might be some big news ( will it be better than expected , or worse )Geez you blokes, take it to one of the 8,000 threads about gas and energy.
This is the bankruptcies thread.
And sticking to the topic, was talking to a person in the building game who has not been paid by Fletchers Building group.
He is saying the word on the street is they are in deep dodo.
Mick
I worked for a drilling company that was exploration drilling for coal at the time, the gas is everywhere where you find coal. The crew that I worked with didn't cap a few boreholes on the job before and the gas killed all the farmer's cows. Even when you're drilling you sometimes hit big pockets of gas, other times it takes a while for it to seep into the drill holes a few days later. It does screw up the water tables, so not too good if you want to farm nearby and need an underground water source.let's not forget that one of the key cause is the prevention when not legal prohibition of any new search let alone exploitation of new resources...Australia joining the bird brain movement leaded by the West..
With the same attitude, all oil would have been burnt by the 1980s...
Reserves are not static until you stop looking
CreditorWatch says that the situation is likely to worsen throughout 2024 because business and consumer confidence is subdued while input costs are elevated.
This is likely to result in insolvencies climbing in the coming months and businesses in Sydney’s southwest and in southeast Queensland are the most at risk.
The CreditorWatch Business Watch Index showed that the average value of invoices was down 19 per cent to just under $150,000 in January compared with the same period in 2023. Volumes have now halved from $300,000 in early 2021.
The Australian Bureau of Statistics reported in the past fortnight that retail turnover fell 2.7 per cent in December – the sharpest decline since the introduction of the GST in 2000 once the pandemic-era fall of 4.2 per cent in August 2020 is excluded.
CreditorWatch chief executive Patrick Coghlan said the deterioration in trading conditions indicated 2024 would be an extremely challenging year for Australian businesses.
“The retail trade numbers for December clearly showed that interest rate increases and high inflation are now exerting a huge amount of pressure on households, which translate to lower demand for goods and services,” he said.
“Our hope is that interest rate relief arrives sooner rather than later to ease cost-of-living pressures and stimulate demand.”
In a worrying sign for the economy, CreditorWatch noted that business to business trade payment defaults were at an elevated level for January, and are 55 per cent higher than January 2023. CreditorWatch noted that it meant businesses are becoming increasingly impatient with late payments, and are taking action by lodging payment defaults against these late payers.
It expected that the decision by the Federal government to make it harder for foreigners to study in Australia to add further pressure on retailers and hospitality outfits who have been the hardest hit by the cost of living crunch.
“Fewer international students will hurt the retail and food and beverage sectors, as these two sectors benefit greatly from population growth, not to mention the access to more labour,” CreditorWatch chief economist Anneke Thompson said.
“Both of these sectors are already grappling with falling demand and spend.”
Accommodation and food services recorded the fastest rate of insolvency of any sector in the December quarter, according to the Australian Securities and Investments Commission. It is up 92.4 per cent to 504 from the same period in 2022, while retail trade increased 40 per cent.
The regions with the highest levels of insolvencies tend to have very young populations, where discretionary spending among the population will have been hugely impacted by rising interest rates.
The top three were located in NSW where Merrylands-Guildford, Bringelly-Green Valley and Canterbury all have projected rates of insolvencies above 7.5 per cent.
Queensland was high on the index where Ormeau and Surfers Paradise were the fourth and fifth most at-risk suburbs with the risk of default at 7.4 per cent in the coming 12 months.
MickA family-owned home builder that has been providing affordable housing for three decades and gone into voluntary administration, unable to work through a series of blows affecting the sector.
Cubitt’s Granny Flats and Home Extensions had been building homes in NSW and the ACT since 1994 and is seeking a buyer for the business.
On Tuesday the Cubitt family said it has “suffered more than it can shoulder” because of bank lending conditions, supply prices, taxation changes, insurance prices, covid recovery and lengthy weather events.
“Cubitt’s made the decision in 2021 to honour fixed price contracts and not pass on price rises to their customers, bridging the shortfall and completing projects with significant loans to the company by the owners, Ian Cubitt, Kim Cubitt and Kate Cubitt, using their personal assets,” they said.
The family said they were unable to bridge the gap entirely and the directors had to make the “devastating decision” to appoint Richard Stone and Brett Lord from RSM Australia Partners as administrators for the parent company – Ian Cubitt’s Classic Home Improvements Pty Ltd.
I look at it slightly differently, in a country as vast as Australia, I don’t see a larger population as being a cause of unemployment, I see a lack of capital being invested in ways that generate employment as being the problem.I feel there are many non-viable small businesses which are around due to unemployment (or lack of adequately paid employment). Certain people that cannot get a job or cannot get a decently paid job decide to risk it and start a small business where they are out of their depth and then they fail.
I feel if we kept a strong job market we would see less of these non-viable small businesses being started. The way in Australia to get a stronger job market with lower unemployment and higher wages would be keeping a lid on immigration (it just pushes down wages and pushes up unemployment) as well as incentivizing business investment.
For example in terms of incentivizing business investment:
KPMG:
"In Estonia, corporate income tax is not levied when profit is earned but when it is distributed. In 2021, the standard tax rate is 20% (calculated as 20/80 of the net distribution)."
But unfortunately some low IQ politicians in Estonia will change (worsen) the corporate tax laws in Estonia with changes to take effect from 2025.
Your argument is fallacious because labour supply is only half the story affecting unemployment. The other factor is demand for labour. Obviously demand for labour increases over time in a growing economy, but my point is that all things being equal unemployment would be lower than what it is now if stopped the migration and work and holiday visas etc. We saw that during the COVID period after the lockdowns ended but before they reopened the border. That was a golden period were unemployment was rapidly dropping. Sure if unemployment gets to 1% and companies literally cannot find people to work then start importing labour but we are not at that point. We have a vast labour surplus.I look at it slightly differently, in a country as vast as Australia, I don’t see a larger population as being a cause of unemployment, I see a lack of capital being invested in ways that generate employment as being the problem.
I mean in 1992 we had an unemployment rate nearly 3 times higher, but we had 10 million less people.
Not to mention that there is places like California that are a fraction of the size of Australia, but have a population much larger than Australia, yet have quite low unemployment.
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the question is “Has Australia reached its peak of possible economic and business development?” Eg can no more farms, factories, tourism developments, service businesses, etc etc be formed to absorb labour.
I believe we are no where near our peak, we could possibly fit another 10 Sydney’s at least. So until that happens it’s not an over supply of labour that is the issue, it’s an under supply of effective capital. And possibly an under supply of skilled labour.
Demand for labour increases as more capital is invested, that was my point. But you also need a certain amount of skilled labour, hence why we need to import some labour. There is a limit to how much capital you can deploy without the skills to build or run it.Your argument is fallacious because labour supply is only half the story affecting unemployment. The other factor is demand for labour. Obviously demand for labour increases over time in a growing economy, but my point is that all things being equal unemployment would be lower than what it is now if stopped the migration and work and holiday visas etc. We saw that during the COVID period after the lockdowns ended but before they reopened the border. That was a golden period were unemployment was rapidly dropping. Sure if unemployment gets to 1% and companies literally cannot find people to work then start importing labour but we are not at that point. We have a vast labour surplus.
I have already refuted your argument in another thread that there is an under supply of skilled labour at least when you look at any industry categories in aggregate none of them have wages increasing faster than inflation therefore by definition no undersupply. Are there a small number of professions that are under-supplied? Yes of course, but in no way is it a systemic issue. The systemic issue we are facing is labour overupply.
Sure if you increase demand for labour by creating a business/investment friendly environment and then unemployment gets to rock bottom levels of 1 or 2% then sure you can think about importing some labour. But at the moment all we are doing is increasing the supply of labour without doing much to increase demand hence unemployment continues to rise.
I agree with you that lack of capital invested is the problem but my point is that importing labour only exacerbates the problem. For the current amount of capital invested in the country we are oversupplied with labour. If more capital gets invested and unemployment drops precipitously your argument would have some validity. But at this point in time it does not.
i had 5 , not counting the seasonal appearances at the Royal showeveryone should do a paper round when young.
Do we though?In My view, we have enough Barristas, Uber Drivers, Truck Drivers, Cleaners, Trolley Collectors and Pizza Delivery drivers.
It worked for me, it funded my first 100 CBA shares, all the way back in 1996, those shares with reinvested dividends are worth over $65,000 today.everyone should do a paper round when young.
Maybe normal people can't afford to live in your area, therefore low paying work that you mentioned, couldn't attract the workers required.Do we though?
In my area heaps of hospitality businesses have signs up saying they are looking for staff. The local pizza shop is looking for drivers too.
there is also a truck driver shortage and a shortage of cleaners.
Labour shortages hit hospitaView attachment 171750
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