Why Victoria’s Portland aluminium smelter won’t survive the decade
Governments throwing taxpayer money at heavy industries like refiners and car makers are delaying the inevitable.
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Does anyone seriously believe the Portland aluminium smelter in Victoria is going to survive the 2020s, despite the ‘hands-across-the-aisle’ Labor-Coalition big bucket of money to secure its future?
That’s, secure its future all the way until 2026.
As even the prime minister’s statement very honestly – if perhaps a tad unintentionally – stated it, and I quote: Alcoa will “keep the smelter operating until (my emphasis) 2026”.
Not “at least” 2026, but “until”.
Of course, we could always get another federal-state deal like this one to have it go another four or five years, just as indeed this deal follows one in 2017 to “secure its future” – as we now see, that was, until 2021.
Indeed, we could get exactly such a deal from a reversed ‘hands-across-the-aisle’ pairing – a federal Labor government and Victorian Liberal or Coalition government.
Actually, on second thoughts, nah.
While there’s every prospect of a Labor government in Canberra, counting down to 2026 – indeed, in my judgment its all-but a certainty after the 2022 election; there’s zero prospect of a Victorian Liberal (or Coalition) government after the state election, also in 2022.
Indeed, there’s precious little prospect of a Liberal/Coalition government in Victoria any time this side of 2030, and not much on the other side either.
It’s not just Portland. Does anyone seriously believe the other three aluminium smelters, which chow down electricity like a couple of former US presidents chowed down their Big Macs, are going to survive the 2020s?
And it’s not just aluminium smelters; think about oil refineries.
Not so long ago we used to have eight, supplying almost all our fuel and petrol needs apart from those pesky discounters – that’s, pesky to big oil – getting their refined product from Singapore.
Now we are down to four and two of those are officially headed for closure. Indeed, they’re the two of the four which are arguably more state-of-the-art efficient. The other two will follow.
Sure, governments can throw taxpayer money at them to delay the inevitable. It was interesting to see three different numbers tossed up in relation to the joint package for Portland – $150m, $155m and $160m.
They’re all around $300,000 to save the 500 jobs. I wonder how someone on JobSeeker, about to get the generously increased $620 – oh yes, and 80c – each fortnight, all of $16,140 a year – oh yes, and don’t forget the extra 80c – feels about that.
So, say goodbye to all the aluminium smelters and the oil refiners – and, let’s not forget all the coal-fired power stations. First Hazelwood in 2017, then Liddell in 2023 and then next cab off the rank Yallourn in 2028.
Now, it’s just a couple of weeks since we found out that Yallourn was going to close early, in 2028, instead of the previously signalled 2032.
Now, we’ve found out that it’s only going to stay open even until 2028 because the Victorian government has given it another big bucket of money.
And ‘found out’ is very much the operative two words; no way was the government – what’s that cute word? oh yes – ‘transparent’ about it.
It and Yallourn’s owner didn’t spell it out; and the government’s refusing to tell us how much it is spending because that’s “commercial-in-confidence”- which is now a handy catchphrase for “government stupidity” and “cheques to business”.
Now, I’ve also regarded Victorian treasurer Tim Pallas well, as someone who has his feet firmly on the ground, but he’s now allowing himself to be forced to preside over cascading fiscal insanities.
You have policies directly designed to close down coal-fired power stations. So you hand out big dollops of taxpayer cash to keep them open and to subsidise the big users of what can only come from coal-fired stations. Wind and solar ain’t going to power a smelter.
The truth of it, of course, is that wind and solar ain’t going to power anything else either. But that’s just the bigger insanity we are wallowing in.
An interesting feature of the Portland deal is the formal way the smelter is now going to be used as an indirect ‘big battery’. It’s going to be turned off when the electricity is needed elsewhere – in Victoria, but also right across the national grid.
It’s particularly interesting to me because I used to muse that if we had a string of smelters, we could not only generate a lot of value-added economic output and be the big, steady 24/7 customers to anchor modern coal-fired power stations, they could be used to in directly supply power into peak demand.
Well, that’s well and truly gone as both smelters and power stations close.
This has all got a taste of what happened with the car industry. Billions of dollars were thrown at it to offset other policies aimed at closing it down.
In the end the ‘other’ policies won.
Originally published as Why Victoria’s Portland aluminium smelter won’t survive the decade
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