A Coming Gas Shortage

It seems that the east coast of Australia is facing a shortage of natural gas at the same time that the country is becoming the biggest exporter of  gas in the world, and it all depends on geography.  The gas we export is mined in the remote north of Western Australia while the gas we use in the eastern states comes mainly from the gas field under Bass Strait, separating Victoria from Tasmania.

The problem is that Bass Strait is now an aged and declining gas field and geologists predict it will decline by a further thirty-five percent in the next five years. As a result, work is underway to build a massive gas terminal at Port Kembla to  supplement our gas supply from overseas.   We seem destined to become both an exporter and an importer of gas.

There is plenty of gas in the ground underneath our feet in both New South Wales and Victoria but to access it we would need to employ what is known as " fracking ".  Not only does this interfere with the natural flow of the underground water system it is also capable of causing earthquakes as gas extraction leaves empty cavities deep in the earth.  For that reason, fracking bans are in force in both states.

Natural gas is preferable to both oil and coal in the release of carbon dioxide and many of our coal fired power stations are being converted to gas.  Gas is destined to play a more important role in our lives and it will inevitably gain prominence as the home heating fuel for the average home during the winter months.  The fact that we are facing a gas shortage should be of major concern.

In fact, this problem is finding different solutions in New South Wales and Victoria.  The New South Wales government has put its faith in that gas import terminal at Port Kembla while Victoria has lifted the ban on onshore gas exploration in that state from July, 2023, and that is despite intense opposition from farming interests who fear it will disrupt natural water availability.

Mother Nature has been benevolent in providing Australia with massive amounts of natural gas beneath the part of this continent with the least population density.  The government would be remiss if it does not ensure that local needs take preference over export contracts and how that is delivered to the eastern states is a matter of economics.

One option would be gas pipeline across the vast interior of the country which would need to be cost compared with shifting gas between Western Australia and the eastern states by ship.  That ship option could be quickly brought into reality as the receiving hub is already under construction.
Now that a gas shortage is a known reality it requires the combination of governments involved to settle their differences and agree on a common solution to this energy problem.

The energy needs of eastern Australia depend on just that being achieved  !

The " Rent Control " Bogey !

The government is wisely introducing protection measures to stop landlords serving eviction notices on people forced out of work by this COVID-19 lockdown.  This not only applies to the eight million Australians who live in rented accommodation but will also protect rented business property forced to close because of the health risks.

The government has used its lawful powers to force shops and offices to close and will pay $1100 a fortnight to  compensate those out of work.  This protection is simply an interim measure until we see where the virus is going and how long the lockdown may last.  The government is not stepping in to pay rents but seeking to spread the loss of income from the lockdown over both the people renting and their property owners.

Rents are a significant measure of the economy and represent  $ 16.5 billion in Sydney alone. A lot of rental properties are owned by retired people who rely on the rent for their income and what could be termed a rent freeze will have a wide financial impact.   It may even drive down the inflation in house prices as buying to achieve a renting income becomes more risky.

This humanitarian  measure is clearly necessary, but many people will compare it with the rent control era of the second world war. Our troops serving overseas were paid just a fraction of their civilian income and rents for their dependents were frozen accordingly.  These " protected tenants " could not be evicted under any circumstances and as a result of legal judgements the low rents they paid continued for years after the war's end.

It reached the stage that the property owners were often receiving rent at a level insufficient to even pay the council rates, and they were legally responsible for maintaining the property value and replacing items like hot water services that failed with age.  It often required a substantial cash bribe to persuade a protected client to yield and vacate a rented property.

The government needs to be very careful that this rent protection does not gradually - by one court decision at a time - evolve into a similar " protected rental " shield that seriously impacts on the rental market.  The owners of rental property also have needs and in framing the necessary legislation it needs to have a clear time frame.  Otherwise - like that war time measure - it simply becomes too politically sensitive to gain the numbers to bring it back under control by the parliament.

Drug Driving Increases !

In the distant past alcohol was the main target in the road safety message. Incremental changes in the law covering detection finally led us to the " booze bus " era where the entire traffic stream can be pulled over and tested and we are now seeing a positive result.  Australian drivers are finally getting the message that what they saw as a social crime can cause them to be separated from the use of their car.

Put bluntly, random breath testing increased the risk of being caught to such an extent that fewer drivers now take that risk, but unfortunately the alcohol nemesis has been replaced by drugs. Research listed in the journal " Traffic Injury Prevention " records  that fifteen percent of those admitted to hospital after road crashes in South Australia tested positive for illicit drugs.

In contrast, just eleven percent of such drivers and five percent of motorcyclists recorded a blood/alcohol concentration above the limit of 0.05.   It seems that the same trend in evident in New South Wales where comparison of the figures for the nine years preceding 2018 showed that twenty-one percent of the drivers or riders who died in road crashes had illicit drugs in their systems.

It seems unlikely that roadside testing for drugs will ever achieve the outcome evident in reducing alcohol use before driving. The alcohol testing is quick and accurate.  In contrast, a drug test involves requiring a driver to wipe a testing probe across their tongue.  If positive, they are required to give a saliva sample which is sent to a laboratory for testing.  The final outcome is not known for several days after the roadside test.

This drug testing campaign lacks the " random " factor of alcohol testing.  Because it is both time consuming and expensive, it is concentrated at high risk locations such as concerts or raves.  The average drug user has good reason to think they will not be tested and what is tested to reveal is the presence of cannabis, methamphetamines, ecstacy and cocaine.  There are many drugs which do not fall into any of these categories.

To make matters worse, all forms of roadside testing have been suspended because of this Coronavirus Pandemic.  Both alcohol and drug users know police road testing has been cancelled and now testing will only be carried out on those killed in road crashes.   That is not an encouraging outcome for the average motorists sharing the road with drug affected drivers.

Surviving the Pandemic !

It is now very obvious that the outcome of this Covid-19 virus is going to be a huge surge in unemployment and it is quite likely that the numbers will replicate the levels last experienced in the " Great Depression " of the 1930's.   The need to stop people congregating as a way of spreading the infection is being enforced by regulations and it is anticipated that unemployment levels will quickly rise to about fifteen percent of the population.

Even in this early stage we are seeing long lines around Centrelink offices as people register for the relief the government is offering.  Both phone and internet access have crashed under the volume of traffic and entry to Centrelink offices is being regulated to ensure a one metre gap between customers.  It is inevitable that there will be a time delay than could run to a month before the unemployment benefit of $1100 a fortnight starts to reach recipients.

Our main political parties may disagree on the details but they are united on the fact that this is not just an Australian problem but a world Pandemic  that is going to cause countless deaths.  The danger is that small, single issue political parties that gain little support at the ballot box will use this issue to promote their populist solutions.  Both the far right and the far left favour extremist regimes in power which reject democracy and rule by force.  At a time of crisis their persuasive promises can have attraction for desperate people.

Unfortunately, this crisis will permanently change the Australia we knew.  A lot of businesses that were only marginally profitable will go out of business and not recover and new trends will emerge in both sporting activities and general business. Recovery will be in the hands of the entrepreneur and this will be reflected in our forms of entertainment, eating habits and way we do business.  We will need to develop new skills to blend back into this new workforce.

The extent our way of life changed was sudden, but the recovery will be protracted.  Hopefully, a vaccine will tame Covid-19 and the infections will cease but the job market will take time to develop back to a normal level and a lot of what we considered " permanent " jobs will have failed to reappear. Before this crash the " casual " and the " gig economy " were fast replacing the old style of work we had experienced in our past.

As dismal as things appear, there is every prospect that there will be a jobs recovery.  We will need to be patient and not swayed by radical ideas.  The " working Australia " that emerges will be what we put in place when the dust from Covid-19 settles  !

A Global Retreat !

There is now no country in the world that is not experiencing the Covid-19 virus Pandemic.  The passage of people around the globe is coming to a standstill as airlines cease flights and supply chains are interrupted.  It seems inevitable that there will be shortages because the world became obsessed with " globalization " and just about everything became composed of various parts from many countries.

As a result, high wage western countries lost their manufacturing dominance as jobs flowed to countries where the wage structure was much lower.   The various countries of " Asia " competed in a race to the bottom as the supply chain sought even lower prices to maintain a marketing edge.  We are used to cheaply priced goods and any disruption will quickly increase living costs.

A lot of car manufacturers tried their luck making cars in Australia and all failed.  We now do not have a car industry and as a result the world competes aggressively and we are enjoying very low prices for cars with the foremost engineering.  Never has the Australian car fleet been so modern and safety conscious.

Prices would be much lower but for an anomaly from the beginning of the car industry.  At that stage Britain was the leader of the world and they chose right hand drive.   The rest of the world chose the opposite, and today car manufacturers need to build in both modes to serve the world audience.  It is unlikely that right hand drive countries will change because of the confusion that would create.

The arrival of the self driving car is imminent, and then that driver position will become irrelevant, and that delivers an important message to Australian industry.  This interruption to the world manufacturing industry prevents an opportunity for the parts manufacturers who previously supplied Holden and Ford.  They mastered the high quality engineering that enabled them to make precision auto parts and now a whole new field of engineering is opening up with this supply chain interruption.

We were able to compete effectively on both price and quality in the very competitive car industry and there is no reason that success can not transfer to general engineering.  To avoid delivery delays, an Australian supplier has a distinct advantage over those Asian rivals.

Marketing is really having the right sales pitch to convince product manufacturers to see it that way !

The Lost Girls !

In 2014 a news story flashed across the world that terrorists had kidnapped two hundred and seventeen Nigerian schoolgirls.  It  had been a night raid by truckloads of young men owing allegiance to a religious terrorist organization known as " Boko  Haram ".  In English, that translates into " Western education is forbidden ".

The terrorists quickly infiltrated the dormitories of this girls school in Chibok and forced the girls at gunpoint into the yard where they were ordered to climb into the trays of trucks.  It was a confusing scene in the darkness and many girls escaped and ran away into the night, but when a head count was taken 278 were missing.

The Nigerian government mobilised its army and promised speedy recovery, but the terrorists had dispersed into into the Nigerian badlands where they have sympathy from the nomadic tribes and little has changed in these ensuing six years.  A few girls have been returned in exchange for " deals " that usually involve the release of Boko Haram prisoners or for ransom that involves guns and ammunition.

The attack sparked an international campaign headed by Michelle Obama under the " Bring back our girls " banner but the outcome has been meagre. Fifty-seven girls escaped early in the ordeal and were offered refuge in American schools.  The terrorists have continued their war in Nigeria where many schools have been burned to the ground and parents warned not to educate their children.  It is now quite clear that the Nigerian government has washed its hands of the affair and any further progress is unlikely.

The news filtering out from the remaining captives is grim.  The escapees report that the girls are ordered to convert to Islam and choose a husband from the terrorist ranks - and marry.  Those that refuse are forced into a life of slavery and are portioned out to serve terrorist families in harsh conditions.  They are held far from any point where rescue is possible and hope is slowly withering away.

It seems that we in the west have also forgotten the Chibok girls.   Religious intolerance and a refusal to let girls achieve the outcomes that education can deliver have split this African country on a war basis.  The United Nations was specifically created to be the neutral umpire to settle civil wars and yet it chooses to remain aloof from this problem.   The lost girls have long awaited seeing that blue and white flag coming over the horizon - to their rescue.  No such action is even on the drawing boards !

Like a Locust Plague !

News footage of people fighting in supermarket aisles over dwindling stocks of toilet paper served to  increase the rate of panic buying and now shoppers are confronted with empty shelves and limits on what will be processed through the checkouts.

The problem is that when the rumour mill sends thousands of shoppers on a buying spree this peak overwhelms the supply chain and incoming replacements are being snapped up as soon as they arrive at the store.  As a result, city shoppers have turned their attention to the out of town supermarkets that serve the rural community and there have been reports of bus loads descending on country towns, described as " like a plague of locusts ",

A lot of small country towns are served by a single supermarket which keeps stocks levels commensurate with demand.  They serve local farming communities and many of these come to town fortnightly or even monthly because of the distances involved.  This depredation caused by city folk plundering local stocks is causing distress and hardship in the farming communities.

It is fast reaching the stage where strangers are being made to feel unwelcome.  Towns that usually welcome tourists are looking hard at out of area number plates on cars if the occupants are in town to raid supermarket supplies.  Strict rationing has been applied in some stores on the basis of preserving stock limits and store managers have been told to close and lock their doors if they sight a tourist bus full of shoppers.

It was hoped that this buying panic would quickly hit a peak and subside, but that is not happening. To some is is reminiscent of the days when New South Wales was the sole state tolerating poker machines and each day bus loads of eager players poured over the borders keen to throw their money down the coil slots of these gambling machines.  Today's hordes are only interested in gaining access to hard to find grocery items.

If this continues, the government may have to turn to the solution that balanced demand during the war years.  Older folk well remember the days when they shopped with " ration cards " and handed over a " coupon " which determined their right to butter, meat, groceries and eggs.  Strangely, toilet paper was not at that time included in the list of " rationed " goods.

Hopefully, sanity will prevail and all that will not become necessary.  There will be no shortages if the public revert to their normal buying quantities and certainly no prospect of this virus causing a siege.  A little logical thinking would quickly end this panic buying.