Energy prices the key to Turnbull’s chances
BY failing to get agreement on their so-called national energy guarantee at Friday’s energy ministers’ meeting, the Turnbull government might just have kept their political prospects alive, as well as our chance to make the best use of Australia’s abundant natural resources to secure our economic future.
Not that this was planned of course. Malcolm Turnbull believes his energy plan, the policy that’s supposed to reduce prices, end blackouts and cut emissions, is an absolute winner.
For the rest of us, it’s a sure-fire path to the deindustrialisation of our economy and self-harm, on a colossal scale, for no environmental benefit when we’re reminded Australia makes up less than 1.5 per cent of global emissions.
It’s just as well decisions were pushed off to August because anything that satisfies the Labor states and territories is unlikely to please the Coalition party room. Despite the minister’s assurances that the NEG has the full support of his colleagues, the reality is that his Canberra colleagues have only had a briefing about the plan in abstract form. The Coalition party room is yet to see any detail about the settings for the NEG and as always, it’s the devil in the detail that matters.
The stakes here are high. If Josh Frydenberg and Malcolm Turnbull can’t keep the party room onside, the legislation is unlikely to pass through the House of Representatives and the government will be in diabolical trouble: either defeated on the floor of parliament or without an energy policy at a time when this is the most important cost of living issue facing the country.
The basic policy problem is that the government is trying to do what’s nearly impossible. You can’t reduce prices without maintaining the place of coal in Australia’s power supply — because coal is by far the cheapest form of reliable baseload power.
And you can’t reduce emissions and avoid blackouts without putting prices up because the extra wind and solar needed to get emissions down requires backup generation for when the wind doesn’t blow and the sun doesn’t shine. It’s either gas, which is already in short supply and more expensive than coal, or it’s diesel, which is expensive and self-defeatingly emissions intensive.
I know some push batteries, but they’re expensive and, at current technology, just not up to the task. So too is the PM’s pumped hydro, which is wildly over-hyped, expensive and requires the use of more power than it actually generates. I kid you not.
The Prime Minister continues to claim that you can square this particular circle but many in the party room have serious doubts. The basic problem is that both Turnbull and his minister think that reducing emissions is a critical priority but the party room thinks that keeping prices as low as possible is what really counts.
And heading into an election, it’s their constituents, not climate change, that have their focus. So where to now? As I see it, no one will want the government to have a big brawl over energy policy in Budget week or its immediate aftermath lest they blight the sales job … but it would be a big mistake for Turnbull and Frydenberg to stitch up a deal with the Labor states and present this to the party room on a take it or leave it basis. You see, Labor has decided that it wants to be the party of lower emissions — hence its even higher Paris targets and its 50 per cent renewable energy target. But by far the Coalition’s best chance of clawing back in the polls, and possibly even winning the next election, is for it to be the party of lower power prices — and the closer the election gets, the less likely the party room is to surrender this chance to be different from Labor, and pitch to swinging voters.
Knowing Malcolm Turnbull, I suspect his instinct will be to demand the party room accept a COAG deal, on what he will say are national interest grounds. He could then say that not only did his prime ministership deliver same-sex marriage, it also delivered a carbonconstrained future. In a vanity sense, he would finally have achieved in energy policy what he couldn’t get done back in 2009: namely bipartisanship with Labor on climate change. Hardly the mark of a centreright government, is it?
Rather than trying to find a consensus, the government should make the next election a fight between cutting prices or cutting emissions. As a climate change warrior, the Prime Minister won’t like it but it’s now becoming a choice between his legacy or Australia’s national interest.