Learning from the shale gas guinea pig

Canberra is already giving a bad example to Canada by underfunding infrastructure development in the west and using the GST to prop up votes in the unproductive east (Learning from the shale gas guinea pig, January 4). The central governments in both countries concentrate on vote buying at the expense of sensible economic development.

This is an interesting article which highlights how Australia should take a much more strategic view of its own energy sources and markets (Learning from the shale gas guinea pig, January 4).
We should be observing the opportunities the US have identified and translating them to our own opportunities but alas, this will not happen all the time we have a government which is more interested in bogging itself down in arguments about non-existent, non-delivering 'renewables' and carbon taxes.
The US does not need any kind of 'climate' policy because its adoption of shale gas will automatically recuce pollution.
Instead of tying ourselves in knots, we should be doing the same.

There are a few vital differences between the experience of the Canadians, and Australia (Learning from the shale gas guinea pig, January 4).
As you have pointed out, USA is Canada's customer. Shale oil and gas has therefore displaced existing production, a home for which desperately needs to be found...
Australian LNG projects are new production, and FID only occurs once projects are underwritten by long term, take or pay contracts, with customers frequently taking equity positions.
A key risk for Australia is price, however again, only a part of pricing is subject to variation, and the other parts largely fixed (varied with CPI and other inflation protecting indicies).
The other vital difference is one you highlight in your article, but with different context.. proximity.
Asian customers are a lot closer to Australian LNG projects than to Canada. Assuming equal construction costs, avoided shipping costs lead to a much lower net back price..
The key challenge for Australia is containing CAPEX cost inflation, with a key part of such inflation the AUD strength.
We are not alone in this. Canada dollar is also strong, but our construction market is overheated, and IR rules lead to inefficiency and low productivity..

Marten, proximity is not really an issue - taking Brisbane and Vancouver as the relevant ports, Vancouver is only appprox 400 kilometers more to Shanghai, Tokyo and Seoul than Brisbane (give or take a hundred ks or so). This is hardly a significant difference given total distances between 7000 and 8000 ks. The only issue for Canada is getting infrastructure built on their Pacific coast (Learning from the shale gas guinea pig, January 4).
You would think it is a no-brainer for companies and governments to satisfy local markets first - closer, cheaper to supply and often higher prices.

Thankyou for the great article (Learning from the shale gas guinea pig, January 4).
A couple of points worth examining, are; The head of the bank of England is Canadian. The P.M. of the U.K. has just told the US, that Britain will not leave the EU. The UK, is the first shipping port between Canada and Europe (a market of 400 million people). Europe is the USA's largest trading partner.
Just a few geo political peripherals, for you to consider, before thinking about Asia.
Gas prices down? - yeah sure so is, world growth. Energy and expansion are inseperable, lets never forget that, lets also remember that the population of the world will expand by 40% (before the 10 billion plateau, is reached).
So, now that we have identified the markets that Canada, Australia and the USA are not able to service, lets throw in, the local gas market of the USA, Canada and Australia. For example, Australia spends around $1.5 billiion per month, importing oil and petrol produce.
Ah! all you windmill brains, listen up. The quickest way to reduce CO2 emissions is to change energy production to gas. To change all forms of transport from oil to gas.
So, why is'nt our government, working 24/7 to produce these results? Its because they think their deficit is only about money.

Australia should turn natural gas into methanol to slash imports of oil. (Learning from the shale gas guinea pig, January 4).