October 22, 2020

Scott Morrison’s power plan is nothing but a gas-fuelled calamity

The Coalition has royally stuffed up energy policy when Australia should be moving to fuels of the future

It really is remarkable, to have lived through the bushfire season at the start of this year, and emerge from that as a political leader stronger in your conviction that the answer is locking in more fossil fuels, for longer.

Mind-boggling, in truth.

But this is the point we’ve now arrived at. Scott Morrison’s gas-led recovery right now remains more like a plan for a plan than a concrete set of propositions. But that will change in the October budget, and the prime minister used a speech on Tuesday to make sure everybody understood that’s where he was heading.

Let’s be clear about why we have arrived here. We are here because Morrison’s corporate advisers, with backgrounds in the fossil fuel industry, are pushing for precisely this outcome.

The prime minister was refreshingly clear in his attribution on Tuesday. A key voice, he said, had been Andrew Liveris, a former Dow Chemical executive and current Saudi Aramco board member, who “sat down with me at Kirribilli” and said if “you want to change manufacturing in this country, you’ve got to deal with gas”.

Quelle surprise.

The second reason we’ve arrived at gas being great for humanity (apart from the need to project that the government has a plan for economic development post-Covid) is that when it comes to Australia’s toxic climate change politics, the Liberal party needs to creep very slowly away from coal without causing an internal conflagration.

In order to creep away from coal slowly (at a price of pumping yet more taxpayer money into carbon capture and storage – a technology that has somehow managed to be the next big thing at our expense for about 30 years) gas will be branded as the bridge to Australia’s low-emissions future.

Morrison will seek to be all things in all regions.

In the non-urban electorates where the Coalition is courting blue-collar votes to keep Labor out of government, the government will be fossil fuels to the eyeballs – the full-throated champions of workers in traditional industries. In the cities, in the safe seats, where the Liberals lost votes because of their wrecking on climate change, the Coalition will be the responsible government setting up the transition to renewables, with gas the firming agent.

Just before we move on, let’s deal with the argument that gas is the transition fuel of choice. That particular epiphany might have been relevant in a policy sense a decade or more ago. For those of us who have been cursed to cover this soul-eroding public policy car crash for as long as I have, it really begs the question why the Coalition repealed the carbon price back in 2013.

The carbon price (falsely badged a tax by Tony Abbott) was legislated to drive that precise transition, with gas the likely transition fuel. While we should all give the government a big hearty clap for finally catching up, Morrison’s current position is a creaking anachronism dressed up as a deep insight.

In any case, before I go off and scream impotently into a cupboard until I’m hoarse, let me run you through a few things, just so we are all clear about what is happening.

The policy Morrison is gesturing towards is not about setting up a rapid-fire transition to low-emissions energy and low-emissions manufacturing. Who could object to that transition? But Morrison’s plan isn’t that, it is about locking in gas for another 30 years.

Let’s be direct about what that means. It means that Australia’s climate and energy policies (both set by the same government) are directly at odds.

The climate policy says reduce emissions, and the energy policy says get more gas out of the ground. Gas causes pollution, and the process of extracting gas causes pollution. The government will counter that it produces less pollution than coal, so aren’t we enlightened? The honest answer to that question is no.

Tuesday’s speech from Morrison was pretty extraordinary in this respect. The prime minster signalled to anyone watching that the government would like more gas to be extracted, and more pipelines built to transport the gas, and more gas-fired power stations constructed.

Morrison declared if the market didn’t do what the government wanted it to do, the government would come in over the top and make sure that stuff got done. What the prime minister didn’t emphasise was that intervention would happen at taxpayer expense in one shape or form – that taxpayers would bear the risk of a set of propositions that have all the hallmarks of a boondoggle.

So to pull all these threads together, we now manage to find ourselves in this position: the Coalition repealed the carbon price, and hasn’t managed to settle a policy framework to replace it that anyone takes even remotely seriously, which has led to investment uncertainty for many years.

Given climate change isn’t waiting around patiently for the Australian government to get its act together, but manifesting uncomfortably in the lives of actual humans, that uncertainty has been accompanied by the rise of activist shareholders worried that fossil fuel companies are trading in what will become stranded assets when the world gets serious about decarbonisation. Regulatory players also now regularly warn corporates and governments about climate risk.

The Coalition has stuffed this all up royally, and the prime minister’s answer to all this is we know better: get about that gas-led recovery, or we’ll get about it for you.

This really is way out there stuff – but bear in mind that Morrison will also frame any opposition to his extraordinary position not as a rational response to the accumulated evidence, but as wild-eyed activism from people who have never taken a risk, never earned a dollar, never done anything other than taken to the streets with a tambourine. Bear in mind that is a schtick that has worked for the Coalition in several election contests, most recently 2019.

Also bear this in mind.

Australia has a choice. Australia could use the recovery from Covid-19 to lock in a genuine transition to the fuels of the future.

Australia could engage in a more sustainable form of energy nationalism, and job creation, because we have all the necessary attributes in this country in terms of people and resources to achieve that outcome.

Australia could choose not to wake up in a couple of decades wondering where our collective prosperity went because we continued to back the wrong horse in the face of all the evidence.

Our prime minister has a choice, and he’s making the wrong one.