When Scott Morrison was challenged on Insiders about not having an energy plan, he indignantly launched into what was obviously a prepared comeback.
PROBYN: You haven’t got a policy, there’s no energy policy.
MORRISON: No, no, five things. If you said we don’t have a policy, here’s five things. First, keep gas in Australia for domestic use. B, ensure that retail providers are given Australians the best deal. Three, ensure that the regulatory arrangement, particularly around things like the limited merits review, are outlawed so you don’t have regulations driving up prices. Four, invest billions of dollars in lower emissions and new technologies, and five invest in production, storage –
PROBYN: You’ve got no investment mechanism –
MORRISON: Hang on, I haven’t finished the five points yet Andrew, you said we didn’t have a policy. And five, on storage, transmission, new investment in new power sources, the biggest investment in storage we have seen in the Southern Hemisphere and the biggest one we’ve seen in Snowy 2.0. Now that’s a 5 point plan.
PROBYN: Investment mechanism, Treasurer?
MORRISON: Exactly. That’s part of the fifth point I was just talking about and we seeking to land that. I tell you who’s standing in the way of landing something on a new investment framework – and that’s the Labor Party because they are putting in a no coal ban effectively on landing an agreement. So we’re looking to land an agreement here, but if Labor are going to remain steadfastly about any – any – any concession towards coal, then what they’re doing is putting higher prices on the Australian people.
So let’s have a look at their five point plan.
On reserving gas for domestic use, there has been a lot of talk but nothing achieved.
On 24 July 2017 the then Minister for Resources and Northern Australia issued a Notification of his intention to consider whether to determine 2018 as a domestic shortfall year.
The Minister for Resources and Northern Australia will consult with producers and other stakeholders such as the Australian Energy Market Operator, the Australian Consumer and Competition Commission and major gas users. The Minister for Resources and Northern Australia is expected to make a decision about whether to make a determination by the end of October 2017.
The Queensland government, on the other hand, announced in January the release of 58sq km of exploration ground in the onshore Surat Basin with the “strict” condition that any gas produced must be used in Australia.
On Morrison’s second point of ensuring consumers get the best deal, all they have achieved is for electricity providers to inform you when your contract is coming to a close. That does give you the opportunity to compare deals if you have the time and can wade through what they mean, an opportunity you already have if you have the energy (so to speak).
Morrison’s assertion that regulations drive up prices is hard to accept. On one hand, Turnbull is saying how huge the gas companies’ profits are and indicating that he wants to intervene in both the gas and coal power markets. On the other, Morrison is implying that we should deregulate even further because the cost of any compliance must be passed on.
The ACCC, in investigating the gas companies, found cartel-like behaviour in pricing, overcharging for use of pipelines, and the diversion of gas that was intended for domestic use to the spot market for sale above and beyond export contractual obligations. Obviously we need more regulation, not less.
The treasurer then said they are investing billions of dollars in lower emissions and new technology.
The billions they have spent on Direct Action have resulted in emissions rising significantly.
The removal of the carbon price combined with continued attacks on the renewable energy target and wind farms, and the uncertainty caused by their ongoing support for coal, has seen us lose billions in investment in renewables which could have been up and running before the coal plants started to wear out.
ARENA, the Clean Energy Finance Corporation and the Northern Australia Investment Fund have all been asked to consider funding further investment in coal infrastructure – something that no private company shows any interest in unless it comes with huge government subsidies.
As the Nationals call for a halt to any subsidies or investment incentives to renewables, the government announced another $90 million to subsidise onshore unconventional gas exploration.
“Federal Resources Minister Matt Canavan is not only espousing a A$1 billion taxpayer leg-up for Indian coal magnate Gautam Adani to build a rail line but has now called for public money to be deployed for gas exploration in southeast Australia.
It is not as if Exxon and BHP, which operate offshore gas rigs in the Gippsland basin, or other big gas players for that matter, need help from taxpayers for their exploration. But the minister wants to lend them a hand anyway.”
Let’s remember, Exxon, has paid almost no tax in three years on more than A$25 billion in revenues in Australia. Meanwhile, domestic gas prices have tripled.
Morrison’s last point was “the biggest investment in storage we have seen in the Southern Hemisphere” – Snowy 2.0. The government is proposing spending billions of dollars of public money on something that will take a long time to build, but we do not even have the results of the feasibility study so let’s not bank that one just yet. I don’t think government spending qualifies as an “investment mechanism” Scott (though it does give you a sugar hit in the quarterly figures).
In short, the government’s energy plan is to intervene in the fossil fuel market, possibly with some regulations we’re yet to see but definitely with huge subsidies and probably loans too. They want to remove incentives for private investment in renewables but spend a motza of public money on Malcolm’s romantic nation-building notion which will do nothing to help the short term energy crisis.
They want to force people to invest in something that the market has no appetite for whilst creating enormous uncertainty for real potential investors in renewables. They can’t even get the Clean Energy Target to be considered by their party room and there was no additional funding for Direct Action, or any action on climate change, in the budget.
That’s not a plan Scott. It’s more of the same that got us into this mess.