Is the gas deal just hot air?
Natural gas is not the main game in the new energy agreement, writes Sharri Markson.
Opinion
Don't miss out on the headlines from Opinion. Followed categories will be added to My News.
It would have been a potentially awkward situation, the Prime Minister standing side-by-side with Matt Kean, the minister no one has heard of, to announce a $2 billion energy deal for NSW.
So instead the energy ministers who cut the deal — Kean and his federal counterpart Angus Taylor — were sidelined, and the PM and Premier Gladys Berejiklian shared the spotlight.
Things are testy enough between these two after the horror bushfire season.
But it’s nothing compared to how the PM views Kean, the leader of the moderate faction in NSW.
After Kean’s interview on my Sky program, where he said on-air that federal Liberals wanted more action on climate change, the PM was far from pleased.
He rang the Premier livid over Kean’s comments.
And Berejiklian, after agreeing with Morrison, then phoned Kean telling him she was not annoyed at him but that the PM was upset and he needed to lay low for a while. In other words, stop giving media interviews which annoy the PM.
And he kept his word. Well, until this column, that is.
It now turns out that Morrison not only dropped the energy ministers from Friday’s big announcement but he also changed the nature of the $2 billion spend, pitching it as all about increasing gas supply in NSW to lower electricity bills.
Kean says that gas actually has very little to do with the deal, which he says is designed to lower emissions in NSW to deal with climate change, while also creating jobs and making energy more affordable.
He says the deal does not include any action on gas that NSW is not already taking. Gas, according to Kean, is tangential.
“The exciting thing is that $3 billion will be spent on green infrastructure in NSW, and the commitment to gas doesn’t involve any money,” Kean said when I phoned him.
Despite Morrison’s big gas pitch, no funding is going towards gas, according to the NSW Energy Minister. Not a single dollar.
How can this be?
The agreement states that the NSW government has to develop options to increase gas supply and has a new target to inject an additional 70 petajoules of gas per year into the market.
The NSW government is likely to give the go-ahead for the Narrabri Project, along with the green light for a new import terminal which the private sector will build.
But if Narrabri or the new import terminal don’t proceed or the 70 petajoules of gas isn’t injected into the market by 2022, the agreement, which hasn’t been publicly released, states that the NSW government will conduct a “gas market review” to address gas market supply.
So the only consequence of the NSW government not meeting its additional gas target, when the PM is so eager to get more gas into the NSW market, is a review. Yes, a review. This leaves the question, where is the $2 billion announced by Morrison and Berejiklian going?
“Now, NSW will see the biggest investment in green energy in the nation,” Kean told me.
“They’ve just funded and backed our plan to deal with climate change.”
The money is expected to go towards projects like hydrogen technology, electric vehicle infrastructure, towards farmers and primary industry to commercialise lower emissions technology, to energy efficiency programs and to invest in and build more renewable energy technology and new income streams.
It will set up NSW to deliver a 35 per cent emissions reduction target by 2030.
This target and a detailed plan about the projects that will be funded will be announced in the next couple of weeks with input from the NSW chief scientist and chief economist.
Despite Morrison’s gas pitch, Kean said he is excited a peace deal has been struck within the Coalition on emissions and energy policy.
“Angus and I have been working on this for six months,” he says.
“He was brilliant.
“He understood our concerns about wanting to take strong action on climate change and I understood his concerns about the NEG which are that the party room won’t support it.
“We found a pragmatic way through which has landed this deal which is one that lowers carbon emissions while still driving economic growth.”
Friday’s energy announcement had been ready to go for months and was originally slated for late last year but was delayed and put off.
Initially, insiders say it stalled because Morrison didn’t want to stand up at a press conference beside Angus Taylor when he was under siege over forged documents sent to Clover Moore’s office.
The scandals have kept on rolling for the federal government this summer.
The sports-rorts affair is now dragging into its fourth week and stealing oxygen from the government’s message.
By the time you’re reading this column on Saturday, Phil Gaetjens will have handed his report into the matter to Scott Morrison.
Bridget McKenzie has been confident that she can survive but if the report comes back with a negative finding on ministerial standards and conflict of interest, she will step down from her role as deputy Nationals leader and minister.
Her exit will not be for pork barrelling, which is as old as politics itself.
What most people fail to realise is that it’s the Nationals themselves, both MPs and staff, who want to tear McKenzie down and who are giving this scandal more life with continuous leaks.
A large faction in the Nationals have been salivating at the chance to destroy her, given the exciting opportunity her carcass presents for them to further their own careers, egos and ambitions.