Putin is using Ukraine to damage European energy security so are there implications for Australia?
Australia needs a diversity of energy sources and technologies, and it should begin by removing the proverbial Putin foot from its throat and repeal our ban on nuclear power.
After World War II, the Soviets put up the so-called “iron curtain”, pushing ahead with a Cold War and disrupting energy trade with the West.
The Cold War came to an end long ago but Russia’s aerial bombardment of Ukraine and its continuing occupation of just half of Ukraine’s territory has had the effect of guaranteeing Russia a seat at the negotiating table for the future resolution of Europe’s energy needs.
Putin has planted his foot on Europe’s energy throat. He doesn’t need to win any war in Ukraine. All he needs is to hold his present position.
Energy security mainly depends on diversity: diversity of technologies and diversity of participants.
After World War II, Western countries responded to the need for energy security by encouraging wide-ranging investments by their public and private sectors.
In the US, companies like Esso and Chevron played key roles.
In the UK, so did BP, British Gas and the Central Electricity Generating Board.
Global energy markets and international energy transport routes have always been vulnerable to interference.
The biggest interference came in 1973, when Arab oil producers embargoed US imports.
The responses did not take long. In 1974, the International Energy Agency (IEA) was formed at the instigation of Henry Kissinger but every importing country has had to develop its own response.
Australia imported oil but developed its indigenous resources as well,
Australia’s coal industry led the reliable supply of energy, drawing on vast coal reserves in the Hunter and Latrobe Valleys and out-competing oil and gas production from the Bass Strait and the North West Shelf.
Australia also discovered vast uranium resources. The Whitlam government nationalised the Ranger uranium project that had been discovered by Peko-Wallsend Ltd and EZ Industries in the Northern Territory.
Before the Ranger project could be developed, the Fraser government sold it to Energy Resources of Australia (ERA). The new company was listed on the ASX and brought in power utilities from Japan and Germany as major shareholders.
Policy developments in the energy sector have varied from country to country and have often occurred by happenstance.
The most recent global influence over energy policy has been the 1992 UN Framework Convention on Climate Change but, from its beginning, it was up to each country to set its own emissions targets and control its cross-border markets.
In 2023, participants at COP 28, the UN Climate Conference in Dubai, affirmed their commitment to achieve “net zero” greenhouse gas emissions by 2050.
But all countries, not just Australia, are struggling with how to control climate change.
Australia’s Climate and Energy Minister, Chris Bowen, told participants in Dubai that Australia would promote renewable energy to the exclusion of fossil fuels and nuclear energy.
Bowen emphasised Australia’s ambition to be a renewable energy “superpower”.
However, the choice of technologies is best left for investors to decide. Now is the time for Australia to promote all energy technologies in a neutral way.
Expansion of renewable energy production makes special sense in sunny Australia but the bulk supply of renewables needs to be backed up by storage and transportation, which imposes additional costs.
The longer the distance, the more costly the transportation and hence the energy becomes.
A total of 437 nuclear power reactors are now used for electricity generation in 32 countries and many others are planned.
The tripartite AUKUS initiative has guaranteed that Australia will use nuclear power for submarine propulsion. However, nuclear power can also be considered for local power generation. The earlier the better, because it will take some years to develop.
In the US, small-scale, mobile reactors are now at an advanced stage of development to back up onshore power supply and to supply the US military. These mobile reactors don’t need to be grid-connected.
Australia needs a diversity of energy sources and technologies. It should now evaluate the potential of mobile reactors to underpin its mining industry. It should start by removing the equivalent of Putin’s foot on its throat and repealing the ban on nuclear power.
The public are principally concerned about rising energy costs and keeping their jobs – more concerned than whether Australia could be a renewables ‘superpower’. The public will support reliable, affordable and clean sources of energy that are not prone to breakdown.
A diverse technology mix is the key to bridging the gap between the climate problem and the climate solution – it is the key to the very success of the Energy Transition.
Like Ukraine, Australia needs an open, diverse and innovative approach to both energy supply and emissions reduction. It doesn’t need the equivalent of Mr Putin’s foot on its throat.
Robert Pritchard is executive director of the Energy Policy Institute of Australia
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