Australia must ‘have the guts’ to stand up to Japanese companies reselling gas for profit, Husic says | Energy

Labor backer Ed Husic is demanding intervention to fight Japanese gas companies reselling Australian exports to other markets, breaking ranks in the government and risking a diplomatic backlash from Tokyo.

The former industry minister said the government needed to send a “strong signal” to overseas multinationals, particularly Japan, to stop “making us look like the mafia” by profiting from the resale of Australian gas as east coast households and industry face high prices and potential supply shortages.

Resources minister Madeleine King suggested Husic’s proposal would not materially benefit the east coast because 95% of Japan’s imports come from Western Australia and the Northern Territory, which are part of a separate, unconnected market.

_{Sign up: AÜ Breaking News email}

While the Albanian government is actively considering gas reserve options on the east coast, Husic advocates a separate and drastic intervention to secure gas reserves on the east coast.

In an interview with Guardian Australia, Husic said Australians would be “blown away” by the volume of liquefied natural gas being exported and then sold to other countries.

A report from the Institute for Energy Economics and Financial Analysis It found that Japanese companies made profits of more than $1 billion by reselling half of what they imported from the Australian market.

Husic claimed that the government could change the emergency mechanism designed to prevent domestic deficits: the so-called “throttle trigger” – To receive back the equivalent amount sent to third countries.

As an example, if a company sells 100 petajoules of gas in one year, it would need to redirect the same volume to the domestic market the following year, he said.

Such a proposal would be fiercely opposed in Japan, which has resisted any intervention by the Australian government into the gas market, which it sees as a potential threat to future supplies.

Husic said the government should resist any step back from Japan.

“I don’t know why we don’t have the courage to endure the frowns of foreign multinationals and foreign buyers when it comes to our own resources,” he said.

“Japan cannot continue to bully us over gas supplies while taking our gas and selling it to other countries and making a profit from it. This is not fair game.”

In an interview on ABC’s Afternoon Briefing, King suggested that criticism of Japan was unfair.

Given how dependent the country is on imports for its energy needs, it’s reasonable for Japanese companies to order excess gas as backup, King said.

“If gas is to be produced, it has to go somewhere, buyers are buying it.” [and] “They use what they can,” he said.

Earlier this week, King gave a speech declaring that the Australian government “will not do anything that harms investment or alters existing contracts or jeopardizes Japan’s energy security” as part of an ongoing review of the gas market.

Ambassador Kazuhiro Suzuki said this week that fears that Japan’s gas sales were affecting Australia’s east coast were exaggerated because so little was exported from that market. The Australian Financial Review reported.

Asked to respond to Husic’s criticism, the Japanese embassy in Canberra said it “respectfully refrains from commenting on the personal views expressed by members of parliament.”

On Thursday King confirmed the government was “actively considering” establishing a gas reserve on the east coast as part of the review to support supply and control prices.

The model is still being discussed, but King reaffirmed that any booking plans would not impact existing contracts.

Husic also supported the gas reserve, advocating various interventions to control prices, including a price cap introduced while he was in cabinet. I didn’t work.

“Tinkering and timidity didn’t work,” he said.

The coalition is committing to a gas reserve applicable to new or expanded projects, in a significant difference from Peter Dutton’s election proposal, but will wait for the government’s model before finalizing its own.