By Jo Nova

Surprise: Government fixes price, and gas supply gets paralyzed

Now that the Australian government has played the Command Economy Joker Card, the gas industry has accidentally frozen. The old rules that set prices competitively have been set on fire, and the new rules are written in government jello. No one wants to set up new long term contracts when the government could change their mind any day, and the industry may either miss out on huge profits a year from now, or be in breach of “goodwill” and “reasonable price” provisions that are the legal equivalent of Ebola.

For some reason ordering people to have goodwill “or else”, just means everyone hires more lawyers, no one knows what they can “reasonably” charge, investors run for the hills, and production shrinks. It’s almost as if the free market turned into a Soviet economy… if the government decides the price, it’s almost like the government owns the industry, yeah?

h/t to Eric Worrall, via RicDre

Australian energy users call gas industry ‘a bunch of bullies’ amid claims of supply shortages

Peter Hannam, The Guardian

Samantha McCulloch, the chief executive of the Australian Petroleum Production […]