APA boss Mick McCormack’s parting shot at politics

Gas pipeline giant APA has called for a bipartisan approach to climate and energy policy ahead of Saturday’s federal election.

Mick McCormack, APA Group’s departing chief executive, left, and his replacement Rob Wheals. Picture: John Feder.

Gas pipeline giant APA has called for a bipartisan approach to climate and energy policy ahead of Saturday’s federal election, with retiring boss Mick McCormack slamming a decade of inaction and failed schemes on both sides of politics.

After APA transmission head Rob Wheals was named yesterday as his successor, the outspoken chief urged both sides of politics to move forward with settled policies on emissions and the transition to renewables to help build a stronger investment platform.

“Policymakers have to be upfront and realistic about what are the targets, what’s the transition timetable, who are the winners, who are the losers and what it’s going to cost people,” Mr McCormack told The Australian. “I don’t think its real hard but our politicians over the last decade have made it real hard.”

Australia needs stable and settled policy to ensure companies could remain internationally competitive, the APA chief said.

“We all want a cleaner energy future, and on a bipartisan basis,” Mr McCormack said. “Let’s all negotiate what the target is to be and then move forward.”

Malcolm Turnbull’s hopes that the National Energy Guarantee would end paralysis on energy and climate change issues was dashed last year, and the policy was subsequently dumped by Scott Morrison. Labor has outlined a plan to resurrect the NEG if elected this weekend.

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After 14 years in the top job, Mr McCormack also warned that high gas prices and a supply squeeze on Australia’s east coast would persist unless both federal and state governments such as NSW and Victoria worked to free up restrictions and ensure more ­reserves are opened up for supply.

“We want to see pricing at a level that isn’t hurting the Australian economy, and the best way to do that is to get more gas into the system. We can talk about long-range plans and about building pipelines from the Beetaloo or the Galilee,” he said, referring to the prospective Northern Territory and Queensland gas basins. “But they are five, 10 or 15 years away. Right now we have to get access to more gas closer to market, and that’s not helped by government moratoria and a go-slow ­approach on other potential gas-producing projects.”

When Mr Wheals takes over the top role on July 6, top of his to-do list will be assessing APA’s ambitious yet undelivered plan to shell out up to $4 billion for a US gas infrastructure business.

But he would face a big test if APA pursued such a large international expansion, Sydney fund manager Vertium Asset Management said.

“It’s a new geography, new jurisdiction and new regulatory landscape, and my advice for any company is it’s always a danger sign if you try and go in with a big bang,” Vertium chief investment officer Jason Teh said.

“There are always miscalculated steps and you want to make sure that you’ve controlled the capital you do deploy so you can build out a stronger base and then it’s easier to grow.”

APA is conducting due diligence of the North American gas infrastructure sector with a focus on acquiring a business with a business risk profile similar to or lower than its own.

But Mr McCormack admits it will only proceed if it finds the “ideal” target, and a deal is ­unlikely to emerge in his remaining seven weeks at the company.

“The US will play out but it has to be ideal for us. It’s the first one so it has to be right.”