WESTERN Liverpool Plains beef farmer Margaret Fleck has condemned gas company Santos for pursuing its bid to get its proposed Narrabri Gas Project up and running.
The proposed Narrabri project extends into the Pilliga Forest and consists of 850 non-conventional gas wells.
On the back of a report released last week by the Institute for Energy Economics and Financial Analysis, Towards a Domestic Gas Reservation in Australia, Mrs Fleck said it was time gas companies were brought to task over manipulation of the country's energy market.
"It's obvious we have a cartel in operation here and Australia is suffering," she said.
That's a belief backed by high-profile property rights lawyer Marylou Potts.
Ms Potts at the weekend advised the North West Alliance, an affiliation of more than 30 groups across north west NSW, to seek advice from a senior counsel and consider mounting a class action against Santos, Shell, Origin, BHP and Exxon for cartel and price-fixing behaviour contrary to the Competition and Consumer Act.
The report released last week said Australian east coast gas production since 2015 had trebled at the same time prices had trebled.
"Clearly basic economic concepts do not apply," the report said.
The report's author, Bruce Robertson, told The Land there was no east coast electricity market, it didn't exist, it was merely a case of a cartel setting prices.
He said gas, supposed to be the transition fuel in the progression from coal to renewable energy production, had become too expensive to be used to create electricity.
"In 2017 it got so ridiculous that Pelican Point power station in South Australia sold its gas supply contract for more money than it could make generating electricity.
"There is however one flaw in the cartel's logic," he wrote in his report.
"They have priced domestic gas so high that demand in Australia is falling.
"Gas dependent industry is closing, domestic consumers are switching fuel sources."
One such commercial customer is MSM Milling, which last month mothballed three gas boilers in favour of a single biomass boiler that is powered by wood.
MSM Milling director Bob Mac Smith said skyrocketing gas and electricity prices had had a major effect on the business, with cost increases of about 80 per cent.
He said the company's export volumes were now about 25pc of what they were 18 months ago.
There was a case for a minimum electricity price that allowed profit, but not price gouging, he said.
"The government sold the electricity generators and they were bought by the energy retailers, who now control the entire supply chain," Mr Mac Smith said.
"Energy policy is a victim of politics."
The IEEFA report argues a case for a domestic gas reservation, to be kept solely for domestic use at competitive prices. West Australia has introduced such a policy.
Mr Robertson said prices could be fixed at $5 a gigajoule on existing and future gas production and still leave plenty of room for profit over and above accepted conventional gas production costs of $2.95 to $3.90 a Gj.
"But Narrabri gas is like a Rolls Royce - expensive," he said.
A report commissioned by the Australian Competition and Consumer Commission put unconventional gas production costs at between $3.65 and $6.40 a Gj.
"The entire east coast export market was premised on producing cheap unconventional gas from coal seams, principally in Queensland," said the report.
"However gas exporters got their numbers horribly wrong and instead of producing cheap gas they produced expensive gas at the well head.
"The wells they drilled also declined faster than expected and produced more water than expected, leading to higher costs.
"The exporters' solution was to foist this high-cost gas onto the Australian domestic consumer and export the traditional, cheaper sources of supply," Mr Robertson wrote.
He said Santos had assured both the government and its investors that its projects would have no direct implications for domestic gas prices, yet the company has been unable to supply its export plants at Gladstone, Queensland, and is buying gas out of the domestic market instead.