Oz Natural Gas prices.

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Just renegotiated my gas electricity, and realised that at present time, you could use gasoline to heat your home...

Gas is 3.6c/MJ, unleaded has 34.8MJ/L - makes the energy equivalent cost of NG $1.25/L, which is virtually comparable, as when used for heating, the transport excises shouldn't apply (no means of getting it back, but diesel and heating oil have a rebate programme for home/industrial heating).

Coupled with electricity at $0.26/kwh, ($2.50/litre equivalent energy), and I can see from my kitchen window, the number of open coal fires that are starting to come back into existance.

Australia is about to start unprecedented Natural Gas exports, to the point that contracted export sales are, in the next few years to be 4 times domestic consumption...and we are the only country in the world who doesn't reserve some of it for us.

http://www.domgas.com.au/pdf/Subs_pres/Curtin - July 2012.pdf

We are losing jobs and industry hand over fist...

And this week it was announced that domestic gas tarrifs are due to rise 17.6% mid year...that's the same as the retail price of gasoline complete with taxes.

http://www.abc.net.au/news/2014-04-23/household-gas-prices-going-up-176-per-cent-in-nsw/5406752

Federal Government think tanks say it is a good thing, as with customers exposed to the "real" market cost of energy, they will make wiser choices...

We have, we've dropped our household energy use by nearly 40% over the last 15 years...and been rewarded with 30% higher bills in the process. As a bit of a hedge, I bought some shares in small cap energy explorers, who I believed were onto a good thing, with great fundamentals...they were, and as soon as they find gas, they are bought out by the majors.

It's at the point where this is happening...

http://www.stanwell.com/Files/Stanwell_M...bruary_2014.PDF

Built and touted as one of the most flexible and efficient plants in the country, it's now shutting down and it's workers retrenched, because the gas rights that the power station has are worth more in the gas market than the electricity.

At a strange juncture in my household at the moment, in that we need to decide on how to heat the place into the future...heat pumps worked at 15c/KWHr (only a few years ago), gas was working, albeit with a flued wallmount that doesn't heat the whole place

One thing the feds DID get right is that people are talking about it.

One neighbour buys firewood, one has dropped back to coal (it's filthy, but hey are on a tiny fixed income, so neighbours don't grizzle, another is buying bottled propane (very expensive, they want $35-50 to fill a 20lb bottle these days, and automotive gas is $1/l), and one is thinking of converting his gas furnace back to oil.

The interesting thing that is appearing 'though is that people are going to more expensive options so that they feel in control...pay $150 for a ute load of wood, and ration it, buy bottled propane and ration it, buy a tank of heating oil...rather than get a $1,500 gas bill at the end of a winter quarter.
 
That's what I do, buddy of mine has loads of firewood from cutting trees all summer, I buy it by the utility trailer load & shovel it into the woodstove as fast as it'll burn it in cold weather (a LOT this past winter)-lowers my winter utility bill by 35-40%! Coal is nasty stuff-I've been tempted, but I don't think I could stand the smell.
 
Here it gets down to -7C every winter, enough to have ice inside the windows...40C is common in summer.

Typically the older houses aren't well insulated. As we renovate, we are insulating the walls.
 
Same problem here, house is 109 years old, if I didn't have replacement windows, high efficiency gas furnace, & wood stove I could easily hit $500 US monthly for gas & electric in winter. Lowering the thermostat to 55F/13C at night in winter helps some too, but the wife will only tolerate a certain amount of shivering!
 
Originally Posted By: bullwinkle
Shannow-how cold does it get in your part of Australia? Didn't realize it got that cold down there, thought the heat was a bigger problem?


I was talking to a visitors from Wellington NZ last year, they were very impressed by the way we build houses here in terms of insulation etc.

I suggested they try and take a trip to Scandinavia and see what they do there!


Is solar an option?
 
my inlaws ay around 56c/kWh, they have had an awesome return from installing solar. Id imagine even at 2xc/kWh there would be a good return in a fairly short time.
 
I think that it was on this board that I was discussing "R" values with a Canadian in terms of home construction...you guys do really really well.

My Mum's house, they built from scratch and installed insulation everywhere, and it paid off.

My place is made of 3x2 timber with a sheet of fibre cement each side...fine when there was an open coal fire in the dining room, and a wood stove in the kitchen...but we are working on making it better.
 
Originally Posted By: JHZR2
my inlaws ay around 56c/kWh, they have had an awesome return from installing solar. Id imagine even at 2xc/kWh there would be a good return in a fairly short time.


Yep, there's 500MW of solar a year going in on the Eastern Seaboard of Oz...has dropped the Oz wholesale electricity price to 5-6c (inclusive of carbon tax), while tarriffs have risen 30-40% in the same timeframe.

about $1,000/KW to install, so it;'s definitely on the cards.

FIL locked in the 60c feed in tarriff a few years ago, now has to declare his solar as "income" for tax purposes...income on what he feeds out, then pays for what comes in.

Has people now looking at storage options rather than grid feed, so they can save their power during the day, and use it at night...

One of the engineers who works with me has a retireee engineer father, who bought old solar hot water heaters, heating milk vats full of brine during the day to heat the house at night...THAT's tax free.
 
You do have some seriously high btu hardwoods down there, and with a half decent stove, you shouldn't go through much of it with only -7 nights.
I hear you on the exporting of your resources too, we seem to do the same and only make the shareholders rich. Norway did it right and now has a $850 billion oil fund for 5 million people...
 
Originally Posted By: expat
...visitors from Wellington NZ last year, they were very impressed by the way we build houses here in terms of insulation etc.

Funny, that's 'cause many houses here are the same ones built by the European immigrants in the 1880s to 1920s.

I worked out 9 years ago that LPG heating costs me half to run (in NZ) compared to an electric resistance heater. A heat pump (naturally) is one quarter, wood burners about the same. Given that our power generation is around 70% renewable the heat pump is the sensible choice, all considered. Power has since jumped from 0.25 to 0.35/kw-h, LPG similarly. Wood is $200 a cord.

But many locals get wood for free completely borking my calculations. But at least it's still carbon neutral (compared with coal) despite the short-term particulate pollution.

To be fair Aus has had a good run the last decade and it had to slow down sometime.
 
We export a lot of our gas too...where the public can't see, the CNG ships load up out of sight of land. We export iron sand from the isolated west coast of the Nth Is too. Back in the '80's they really pushed CNG for repowering cars (I got a ticket in that) and businesses and households plugged into the pipeline. No CNG for cars now, just a little LPG.

What about powering your powerplant with NG? NZ's only coal powered power station, just up the road from here, hardly ever runs on coal, mostly it uses NG.
 
Quote:
NSW Premier Mike Baird says around half of the proposed increase is due to the carbon tax.

I'm confused. Isn't the idea of carbon taxes to increase prices so that less gas will be used the idea? So now, market forces (to some degree) are causing higher prices and that is a bad thing?

Mr. Gavin Goh's paper never mentions these taxes as a price inflator. I wonder why?

Such taxes certainly preclude a free market and accurate pricing singles to both consumer and supplier.

Quote:
The likely price impact would be far greater than the carbon tax and it would skew local energy supply towards cheaper, but carbon-intensive, coal.

Completely at odds with federal government policy.


http://chrisback.com.au/News/InthePress/...es-burning.aspx

crackmeup2.gif
So much for their powers of prediction.....

And $60 billion investment into gas extraction is no small dime into the local economy.


One thing that I haven't seen people that want a reserve talk about is exactly what that reserve should be? Any amount will be entirely arbitrary and send false pricing signals to the market.
 
Originally Posted By: Tempest
Quote:
NSW Premier Mike Baird says around half of the proposed increase is due to the carbon tax.

I'm confused. Isn't the idea of carbon taxes to increase prices so that less gas will be used the idea? So now, market forces (to some degree) are causing higher prices and that is a bad thing?



The bloke's been in the job less than a week, and already making a fool of himself...the carbon tax has been in a couple of years, and has nothing to do with the proposed 17% increase...particularly as his party federally is committed to eliminating that tax in the same timeframe as the proposed increases.

Doing the sums...NG is methane basically, atomic mass 16, combustion of which produces 44 mass units of CO2...a KG of NG produces 3.6KG of CO2 which is taxed at $24/tonne, or 2.4c/KG (CO2), 0.65c/KG of natural gas...and a specific energy of 53MJ/KG...i.e. my 3.6c/MJ contains 0.012c of carbon tax...my new improved price of 4.2c is going to contain from 0.012c carbon tax to zero some time in the next 12 months.

Carbon taxes aren't payable on export gas either...

So unless a 0.012c/MJ tax on the locally consumed product magically has elevated international prices...he's talking out his rear.
 
Originally Posted By: Silk
What about powering your powerplant with NG? NZ's only coal powered power station, just up the road from here, hardly ever runs on coal, mostly it uses NG.


It's not easy to Convert a station to NG, and as per one of the links I posted, a relatively new (2002) gas fired station in QLD, touted as one of the most efficient and flexible has been closed down so that it's owners can sell their gas rights overseas, rather than making power out of it.

No-one would build new gas plant at present time, let alone convert.

As an aside, Huntley's "sister" station in NSW has one unit shut down, and the other on long term recall...Some of the tools for Wang have been sent to Huntley during shutdowns.

Originally Posted By: Tempest
Quote:
The likely price impact would be far greater than the carbon tax and it would skew local energy supply towards cheaper, but carbon-intensive, coal.

Completely at odds with federal government policy.


http://chrisback.com.au/News/InthePress/...es-burning.aspx

crackmeup2.gif
So much for their powers of prediction.....


In a purist engineering sense, gas shouldn't be used for stationary power generation, but I do get a giggle out of that.
 
Originally Posted By: Shannow

As an aside, Huntley's "sister" station in NSW has one unit shut down, and the other on long term recall...Some of the tools for Wang have been sent to Huntley during shutdowns.


There was a big new unit put in at Huntly in 2005, to extend the stations life. It is the main generating plant using NG only, and the 4 units in the main house are just backup now, sometimes I see 2 working, 3 at most, I've never seen all 4 going since the new one went in.
 
Exploration rights in various areas, Taranaki being one, that's where all the gas is now. Lots of protests about that. You should've bought shares in Genesis Energy, they own Huntly power station - selling off Government assets to pay the bills....again.
 
Quote:
Carbon taxes aren't payable on export gas either...


Talk about a double whammy to the local people! Make gas prices artificially higher with carbon taxes and then setup an incentive for export by not charging the same tax on product being expatriated?

I don't think your government likes you very well.
frown.gif
 
Originally Posted By: Tempest
I don't think your government likes you very well.
frown.gif



You can say that again...

At the time of the tax, it was pointed out that coal for export is tax free, coal for domestic runs 2-3c/KWHr tax when made into electricity (industry absorbed, all but 1.5c of it)...apparently we had a "unique competetive advantage" that would insulated us from the obvious effects,


But closing aluminium smelters, and the gigajoules of oil that are burned to transport bauxite (mostly air) across the oceans would tell otherwise.
 
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