Self-interest fuels Big Energy calls

Gas price cap makes sense, ignore the criticism, writes Charles Wooley

Greed. I have reported for so long and in so many places, I thought neither human cruelty not corporate greed could shock me again. I was wrong.

I was completely blindsided last week by the brazen greed and selfinterest of the energy sector in its reaction to the Australian government’s legislation to cap the price Australians must pay for their own gas when purchased in the local market.

To me, and most people I have asked, it seemed like an eminently reasonable proposition.

Profiteering energy companies have been making huge windfalls on the back of the war in Ukraine while blithely ignoring how soaring prices in Australia are pushing small an middle-sized local industries to the wall.

Neither did the energy moguls pay any heed to the plight of Australian families impoverished by soaring energy bills.

You could hardly expect any sympathetic understanding from Big Energy executives who obviously live in a different world from the rest of us.

Typical of their reactions was an attack on the government’s energy relief bill by Santos chief executive Kevin Gallagher, who declared, “This Soviet-style policy is a form of nationalisation”.

Mr Gallagher, who is paid $US6.34m a year, hails from Scotland.

He lives in Adelaide and loves a once-a-month breakfast treat of haggis, black pudding and poached eggs.

“I recommend it to anyone,” he recently told the Financial Review. “You’ll be feeling great by Saturday lunchtime.”

My old Scottish father loved his black pudding, which he also declared was “good for you” because it contained lots of protein and iron.

But some people report that the heart-clogging concoction of fat, cereal, onion and pigs blood stuffed in an animal intestine can have immediate unpleasant side-effects. It can cause gas.

Though, even after Albo’s $12-agigajoule gas price cap, it should still make for a profitable breakfast.

Speaking of wind, the outraged, largely foreign-owned energy sector should be relieved the government didn’t introduce a windfall profit tax as the Conservative government in the UK has done.

The Tories copped a plastering from the energy companies, but not from the voters.

And I didn’t see any references to nationalisation or to “Soviet-style” communism.

The Brit gas industry remained largely rational, arguing that the tax would undermine its ability to reinvest profits in further development.

But here’s the thing.

While the assemblies of nations are responding to climate change and working towards phasing out fossil fuels, the energy companies are arguing for further growth.

It really is as if there is no fuel like an old fuel and the more you can charge the better it gets.

Given their incredible salaries and bonuses there is just a chance that the company execs have flying saucers parked out the back of their mansions, in case things get too hot down here on Earth.

Albo pointed out that the energy sector should be grateful for avoiding a UK-style windfall profits tax.

Anywhere but in the mahogany boardrooms of Santos, Shell and Woodside, Labor’s deal might seem pretty good, given the nation’s present financial circumstances.

The companies get to continue selling the majority of Australian gas overseas at absurdly high prices while still receiving a fair price for what is reserved for Australians.

Last week the Prime Minister said, “If Australia was a good place to invest in 2021, when the average price was $9.70, it’s a pretty good place to invest in 2023 when there is a twelvemonth limit of $12”.

Given the hardship Australians are experiencing right now that would seem a fair and reasonable proposition, unless you are a mining company executive or a shareholder.

But to repeat the point, Big Energy executives live in a different world.

The Albanese Labor government, much like the cash-strapped Rishi Sunak Conservative government in the UK, operates in a consensual and modern 21st century democratic societies.

The apparently old-style capitalists in the corporate towers of Energy seem mentally to be back in the late 1700s where brutal economic doctrine insisted government had no place in the economy and the marketplace.

No matter how much the human suffering.

The Opposition also went back down the time tunnel this week.

“Defying the laws of supply and demand will always end badly,” said Opposition treasurer Angus Taylor, warning that, “Labor’s diabolical energy initiatives ignore Economics 101 with an appalling policy that will end in tears”.

This week in federal parliament the Opposition argued that the

This comes not from some green leftie but from a fiercely free enterprise miner whose business heart is as hard as his hat. CHARLES WOOLEY

government was corrupting the market and the economic skies would fall in.

The same argument was used to prevent the reduction of corn prices to feed the starving Irish during the Potato Famine.

The same argument was used to maintain slavery in the plantations of the American South and of the Caribbean.

The same argument was used to maintain child labour in mines and to send children up chimneys.

“It you interfere you will destroy the market.”

In the context of a world consensus that we must, as soon as possible, phase out our use of fossil fuels, we can only wonder, is the destruction of this particular market to be seen as a threat or a promise?

Australia’s wealthiest man, Andrew Forrest, has just invested more than $4bn to become our largest owner of renewable energy assets. Twiggy declared, “We are happy to take the initial risk.

“We look forward to bringing long-term investors, like industry funds and super funds.”

This comes not from some green leftie but from a fiercely free enterprise miner whose business heart is as hard as his hat.

Forrest has seen the future. By comparison the outraged roaring this week from the gas companies looks like the flailing death throes of some ancient behemoth whose time is fast running out.