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“Even if a 5 per cent understatement of contracted volume was allowed for, a significant quantity of new contract volume was required in the near future” said the 9 October-released “Report to the Joint Working Group on Natural Gas Supply Natural Gas in Australia”.

Western Australia prices tell the story:

• In January 2007 a new three-year contract for John Brookes gas was signed between Santos and Newmont Mining, which was reportedly paying $5.50/GJ, compared with average market prices of $2.50/GJ to $2.75/GJ a year;

• In May and July 2007 three further low volume shortterm contracts for John Brookes gas were signed;

• between Santos and Windimurra Vanadium (3 years at an estimated price of $5.80/GJ);

• Barrick Gold (5 years at an estimated price of $7.50/GJ; and

• Jabiru Metals (3 years at an estimated price of $4.70/GJ).
Santos’ has short-term market power:There was an immediate requirement for 63 PJ in 2007 that grows to 116 PJ by 2010 and 244 PJ by 2015. The cumulative requirement to 2015 was approximately 1,300 PJ, growing to 2,700 PJ by 2020. This picture was consistent with that presented by Alcoa and other industry estimates, for example;

• The 2007 requirement was due to the large number of contracts that was understood to have ended in 2006 and had occurred despite the availability of take-or-pay gas from the BHP Billiton DRI plant contract, which lasted until 2013. Most of the contracts were with producers that do not have further reserves that can be contracted so it appeared unlikely that they have been extended.

John Brookes, Reindeer and Macedon: ..”the short-term contract requirement, to about 2010, can only be met by the John Brookes and NWSV joint ventures. However gas purchasers report that the NWSV had withdrawn from the market, creating a very tight gas supply position. The Economic Regulation Authority had stated that NWSV’s withdrawal was due to technical difficulties encountered during an upgrading program being undertaken on its two domestic gas processing trains12. The upgrading program had been intended to increase domgas capacity by 100 TJ/day to meet growing demand. However Woodside had stated that it was still actively marketing to customers, even though it was believed to have withdrawn term sheets for the extra 100TJ/day.

Reference: Report to the Joint Working Group on Natural Gas Supply Natural Gas in Australia 16 July 2007; Joint Working Group On Natural Gas Supply, published 09 October 2007. Author Mclennan Magasanik Associates. Project Team; Richard Lewis, Project Director. Michael Goldman, Russell Farmer. This report was done forthe Joint Working Group, MCE-SCO and MCMPR-SCO for the purpose of assisting the Group to assess: barriers to gas supply; risks and benefits of major inter-jurisdictional gas projects; and policy options that balance domestic and export needs. See also the Final Report of the Joint Working Group on Natural Gas Supply. http://www.mce.gov.au. Comment by close of business on Monday 5 November 2007 to: Andrew Taylor Department of Industry and Resources, Western Australia Andrew.TAYLOR@doir.wa.gov.au Telephone 08 9222 0442. Stakeholder feedback will further inform the work of two Ministerial Councils in addressing the issues raised in the reports. MCE Standing Committee of Officials 09 October 2007.

17/10/2007

Ministry losing money on each transaction: While the military reaped rich profits from selling quotas on the black market, the Ministry of Energy subsidised the price of petrol. It lost money on each transaction because the ministry bought fuel internationally in US dollars but sold in the local currency, the kyat. It used a revolving fund of $US36 million, spending about $US200 million a year. The problem for the ministry was that it could not then use the internationally worthless kyat to buy the next round of fuel, so the ministry was forced to buy US dollars on the black market in Burma at inflated prices.

Fuel smuggled across borders: The redirected army quotas were not enough to supply the black market so fuel was also smuggled in across the Chinese, Indian and Thai borders. “When it is smuggled in by sea, the navy, which has sold its quota, takes drums from the smugglers to clear their way,” the analyst had said.

The Sydney Morning Herald, 9/10/2007, p. 9

Fuel price increases were a trigger issue: Heads of government departments earned $US14 a month until late 2005, when the Government increased salaries tenfold to stem dissent about the move to a new capital, Naypyidaw, in central Burma. The tenuous economic position of most Burmese families had made fuel a trigger issue. The unrest dated back to August 15, when the military junta increased the official price of fuel by up to 500 per cent without warning; prices of compressed natural gas increased 500 percent, diesel doubled and petrol rose 67 per cent – leading to protests by pro-democracy activists. They had been arrested and the monks had taken over, at first calling for relief for the people from economic hardship, only later for greater democratic freedoms.

Iniquitous quota system prevailing: The taxi driver who queued each day in Rangoon had a receipt book that allowed him nine litres a day (270 litres a month). In Mandalay, the next-biggest city, the quota was smaller, at only 27 litres a week. A government official got 13.5 litres a day. Down at the military depot, the Rangoon regional commander received a quota of 400,000 litres a month. “Regional commanders get rich because they sell their quotas,” an economic analyst in Rangoon had said.

The Sydney Morning Herald, 9/10/2007, p. 9

Military outsourcing in Iraq described as an addiction: The US had effectively outsourced much of the occupation and security of Iraq. Brookings Institute scholar Peter Singer, in an open letter to US Defence Secretary Rober Gates, described the military outsourcing as “an addiction”. “The blunt truth is that while contractors are carrying out valuable roles, their overall effect has been to undermine the Iraq mission and the wider fight against terrorism,” he wrote in The Washington Post. “Worst of all, we have outsourced the most important core function of our Government: to fight and win the nation’s wars. The US Government needs to go back to the drawing board on its use of private military contractors, especially regarding important armed roles in Iraq and future operations. These should again be handled by the Government. …Focused only on their contract, the private firms’ standard practices include driving their convoys up the wrong side of the road, ramming civilian vehicles, tossing smoke bombs and opening fire with machine-guns as warnings.”

Cowboy attitude making things worse: David Homer had first-hand experience of that cowboy attitude. He worked for Crescent Security Group, a company based in Kuwait City, and said that after being attacked with a roadside bomb in a town north of Baghdad, Crescent employees fired their automatic weapons pre-emptively whenever they passed through the town. “I know that I personally never saw anyone shoot at us, but we blazed through that town all the time,” said Homer, 55, a truck driver from California. “Personally I did not take aim at one person. But I don’t know what everybody else did. We’d come back at the end of the day, and a lot of times we were out of ammo.” Homer quit after one of Crescent’s Iraqi employees fired a machine-gun and hit what appeared to be two members of the Iraqi National Guard. “Let’s get the f— out of here,” Homer quoted the team leader as saying before the Crescent team drove off. “‘That was my last mission,” Homer said. “I wasn’t over there to wreck somebody’s life. There was too much cowboying going on. I really didn’t know if we had made things worse over there. More than likely we did; that was my feeling.”

The Advertiser, 11/10/2007, p. 13

Government pays people to attend rally: Tens of thousands of people had been taken to a junta-sponsored rally in Rangoon in a show of strength by the generals. The rally had denounced Western powers and foreign media, which the military regime accused of fomenting the recent protests. “Down with BBC. Down with VOA. Down with Radio Free Asia,” the crowds had chanted. Officials had said 120,000 people attended the event. Local officials said, on condition of anonymity, that they had been ordered by the government to round up delega­tions from around the city to attend, offering some payments of about 90c a person. Thousands of people remained incarcerated in four detention centres around Mandalay, con­trolled by the Burmese army’s 33rd division.

Power of Buddhist clergy broken: Army commanders had broken the political power of the 200 monasteries in Burma and shattered the Buddhist clergy as an organ­ised force. They had instituted the severest repression inflicted on the city for two decades. Troops had dragged dozens of people, most of them young, off the streets at gunpoint. Using counter-terrorist technology sup­plied by China, the security forces checked the registrations of motor­cycles against numbers captured from digital images of the protests that had unfolded from 23 September over five tumultuous days. In front of a foreign witness, they had hustled a youthful couple and half a dozen teenagers into an olive green truck with smacks and prods from the barrels of their automatic rifles. “I wish there were hundreds of foreign tourists here to see this,” had said a Burmese man, watching.

Monasteries under siege: The greatest monasteries in Burma, clustered in the southwest of the city, lay under siege. They appeared to be all but devoid of monks. The military had ordered everybody from venerable abbots to adolescent novices and nuns into trucks. They had been taken to one of the four detention centres. “The young monks were told to strip off their robes. They were hit and kicked and then sent home to their villages,” said a witness. “The older monks are kept in captivity. They are forcing the sayadaws (elders) to write confessions and promises to obey the government. Just a few monks have been allowed back to Mahamuni Paya. Most of the other monasteries are empty.” Within days, the monastic movement had been decimated. So the Burmese military defeated the only institution in a land of 51 million that had dared to pose as an alternative to its authority.

Desperate concern for students: There was desperate concern for about five students from Manda­lay’s medical university. The five — two girls and three boys — had been arrested by soldiers after demonstrations at the campus. All were from well-known, respectable families and were popu­lar figures among their peers. “Their families are fearful be­cause they have heard these kids will be charged with narcotics offences,” said an informant who had spoken to the youths’ rela­tives. This would mean that the students, instead of serving 40 days in detention for public order offences, could be sent to a notorious penal labour camp in the Hsu Kuang valley, in north­ern Burma.

The Australian, 15/10/2007, p. 10

Funding boost of $2.2 million: The bio-energy project had received a Federal Government funding boost on 10 October to the tune of $2.2 million when Deputy Prime Minister Mark Vaile was in town. The money would go towards a business plan and preparation of a prospectus, with the devel­opment application already with the local council. A massive 85 new direct jobs and 600 indirect jobs would be cre­ated in the long term, with as many as 400 jobs in the con­struction phase.

Safe grain-growing area major attraction: Managing director of Bio-En Australia, Craig Wilkinson, based in Tabulam, had said what made the North Coast plant different from other proposed plants around the country was the safe and underdeveloped grain-growing potential of the region. “The strong beef, dairy and pork industries in this region will also provide a ready-made market for the byproducts of ethanol production, another critical driver of the success of such proposals.” About 170,000 tonnes of wet distiller’s grain would be produced per annum for livestock feed while, at a later stage, biomass would be supplied as a fuel for an onsite co-generation plant, which would produce green electricity to be sold back to the State grid.

Other primary industries will not suffer: While production of grains was already increasing in the area, Wilkinson had said it was unlike­ly other primary industries would suffer as a result. The funding had been made avail­able under the Sustainable Reg­ions program, which helped reg­ional communities facing eco­nomic, social and environmen­tal change.

The Land, 11/10/2007, p. 6

Mayor Churchill candidate for Flynn: The prime target for the Nationals was Flynn, the newly created central Queensland seat that ran from west of Longreach to the coastal town of Gladstone. The Nationals’ candidate, Glenn Churchill, was also the mayor of the local Banana Shire, providing him with a solid base from which to criticise the state Labor Government’s con­tentious council amalgamation scheme.

Optimism in NSW: Another key area for the Nationals would be the north-western region of NSW, where the boundaries of federal seats were radically redrawn in a recent redistri­bution that abolished Gwydir, the seat of former Nationals’ leader John Anderson. The party was optimistic that candidate Chris Gulaptis could hold on to the NSW seat of Page, which had been vacated by the retirement of fellow National Ian Causley. Mark Coulton would contest Parkes. The former Parkes MP, National John Cobb, would run in Calare, a seat vacated by the retirement of Independent Peter Andren. Senior Nationals sources said the party had set its sights on winning Flynn and regaining Richmond on the Queensland-NSW border to make up for the loss of Gwydir.

Leichhardt, Capricornia hard to call: Other “dark horse” seats included Leichhardt in north Queensland, where Liberal Char­lie McKillop and the Nationals candidate Ian Crossland would fight a three-cornered contest for the seat vacated by Liberal Warren Entsch, who was retiring. Capricornia was another seat on the Nationals’ agenda, with Robert Mills taking on Labor MP Kirsten Livermore in a seat that had undergone dramatic changes since the last election, with strong growth within the mining community.

The Australian, 15/10/2007

$40 million in cash available: The directors of the Westralia trust were betting on the potential of agricultural property as an invest­ment class and they expected it to perform strongly in the long term due to structural changes in demand and supply. “Rural land supply is tightening globally as a result of increased demand for biofuel feedstock pro­duction, resistance to deforestation and the introduction of refores­tation,” Westralia’s Peter Zachert said. He said the trust had about $40 million in cash available to fund the land purchases, with the remain­ing finance to come from one of Australia’s major banks.

Buying land across Australia: The land would be sourced from the Futuris-owned company Integrated Tree Cropping, Australia’s largest hardwood timber processor, which controlled 150,000 hectares of timber­land across the country. The trust intended to buy land across Australia, including in south-­western areas of Western Australia such as Esperance and Albany, as well as land in Queensland and the Green Triangle covering south-eastern South Australia and south-western Victoria.

The Australian Financial Review, 15/10/2007, p. 62

CO2 ‘industrial waste’: ” … when the 1996 Protocol enters into force, it will supersede the London Convention as between parties to the 1996 Protocol which are also parties to the London Convention. However, Australia will continue to be bound by the London Convention in relation to nation-states that do not fall into this category. Accordingly, the application of both the London Convention and the 1996 Protocol to CCS is considered below. With respect to the London Convention, some commentators have suggested that carbon dioxide would likely be categorised as industrial waste, which is defined in the Convention as ‘waste materials generated by manufacturing or processing operations’ (Annex 1).

Restricting disposal: “If this is the case, the London Convention is likely to restrict the opportunities for the ‘disposal’ of carbon dioxide under the seabed. However, such views are not definitive, and it remains unclear whether carbon dioxide would be considered a waste for the purposes of the Convention. In addition, as previously mentioned, it is unclear whether the London Convention covers sub-seabed disposal of wastes (this is not an issue under the 1996 Protocol). In contrast, the 1996 Protocol does not contain the prohibition on ‘industrial waste’. Nevertheless, the reverse-list of allowable materials, which is essentially identical to the list contained in the London Convention, would likely mean that the same restrictions would apply when addressing the Protocol,” the report added.

Reference: Carbon Capture and Storage Section 6 – “A Report to the Australian Greenhouse Office on Property Rights and Associated Liability Issues, 2005″, p.113.

Contact: The Communications Director, Australian Greenhouse Office, Department of the Environment and Heritage, GPO Box 787, Canberra ACT 2601. Email: communications@greenhouse.gov.au

http://www.greenhouse.gov.au/publications

Erisk Net, 8/8/2006