Is the Coalition's gas nirvana just an attempt to have its fossil fuel cake and eat it too?
Ten years ago, when Australia’s climate and energy botch-up was still in its infancy, politicians and their advisers used to talk up the virtues of gas as a transitional fuel, and they used to talk about carbon capture and storage (CCS) as technology that governments needed to invest in to drive the transition to low-emissions economies.
The great botch-up is now well past infancy, and Australia’s record on climate and energy is a disaster so profound it’s still traumatising backstage protagonists years after the stadium rock wreckers have left the crime scene.
Yet people in power are still talking within the same parameters. Gas. CCS. As if these might be new discoveries – as if the economics of the transition have remained immutable in the decade we spent watching the political class execute inter-generational failure at our expense.
Just in case you’ve missed the Morrison government warming up the talking points about Australia’s great gasled recovery from the economic shock of Covid-19, allow me to bring this winter marketing offensive to your attention. The prime minister, several ministers, and some prominent corporate advisers, like the former Fortescue boss Nev Power, are out, banging that drum.
We are told cheap gas will help restart an economy hit for six by coronavirus. Cheap gas will boost flagging growth, create jobs, and make projects considered uneconomic five minutes ago suddenly economic.
It is gas nirvana, as far as the eye can see – except it is unclear to me where this cheap gas will come from. Gas prices have fallen recently, but will these falls be sustained? Are falling gas prices really the environment in which companies will pursue new investments?
Won’t they worry about stranded assets? Won’t they worry about carbon risk – that being a real thing. Ask the Reserve Bank. Or the banking regulator. Or the corporate regulator. Australia’s gas industry needs to be able to extract and sell the resource at a rate of return that justifies any new investments accompanying the opening up of new supply. That’s a basic rule of business, unless there’s some undisclosed fine print.
Unless, of course, the real story is taxpayers are going to be saddled with the risks of marginal investments, which makes gas nirvana sound more like a billion-dollar boondoggle dreamed up by a kitchen cabinet of vested interests.
But that doesn’t sound nearly as exciting, does it?
Just while we are on this, gas nirvana also has another dimension. It is being invoked, in part, to justify the reworking the miserable suite of alleged emissions reduction policies that the Coalition has kept on life support since the Abbott era. If the future is gas and
CCS, then the policies will need another tweak to make them fit for purpose, because low emissions are just a matter of definition.
The government says we need to look at CCS because all the sensible people are technologically neutral, not ideological. The goal should be emissions reduction, never mind the means.
Fine as far as it goes, except that parable lacks some context. The real story is this: Australia has failed to take meaningful action to reduce emissions, because the Coalition has wrecked progress at every turn for more than 10 years.
The truth is the Liberal and National parties have blown the critical decade. That failure is now an implicit justification for more taxpayer support for CCS, because the need may become so pressing that all options will have to be on the table to try and stave off the worst-case scenario – not that the arguments will ever be framed in such frank terms. The talking point says this: Australia can sequester emissions, we can have our fossil fuel cake and eat it too. Cue applause track.
I need to make a couple of things clear because the climate and energy debate has become so toxic and so polarised that all nuance has departed the stage.
I have no profound objection to gas as a transitional fuel – the operative word being transitional. If we pursue gas peaking to firm renewables, that’s one thing. If we bolt gas into the system as a permanent substitute for coal, and justify that substitution on the basis that gas is marginally less emissionsintensive, that’s quite another.
I also don’t object to CCS, because as I flagged a minute ago, we might actually need it. If Donald Trump somehow manages to convince Americans to re-elect him in November despite the fact the president represents a clear and present danger to his own citizens, we are going to need a whole lot more than CCS to get the world out of the climate hole it will fall into because of the sustained absence of US leadership.
What I’m saying today is two things: resources are finite, and the government has options. Let’s call them option A and option B.
Option A sees the Morrison government choose not to make a mockery of the international climate commitments it signed up to, voluntarily, in 2015. It can use the economic recovery from Covid-19 as an opportunity to drive a low-emissions transition, which will drive sustainable jobs and growth. The government can choose to set Australia up for half a century, not another election cycle. Plenty of smart people think that’s a viable option.
Then there’s option B. The government can use the recovery from Covid-19 as cover to lock in fossil fuels for another couple of decades. It can dress up the gas-led recovery as an act of enlightened national sovereignty, a downpayment on enhancing strategic capability, knowing that concept will resonate at a time when Australians are feeling insecure about their economic prospects.
Morrison and his ministers and advisers can gamble that a majority of Australians will care more about having a job today than saving the planet tomorrow – and the worst of it is, that’s not much of a gamble.
This sensibility broadly reflects community sentiment. This is how a majority of Australians have voted at every federal election since 2013 – and that was before we all endured the greatest economic shock since the great depression – before a global pandemic rendered communityminded activism a second-order issue, a luxury that might be resumed in due course.
To be clear: right now, on current indications, the Coalition is limbering up for option B, and trying to make a virtue of it.