It’s a persuasive bundle of truths. Gas is far more popular than nuclear. Gas will be the essential factor in firming up renewable power generation for years to come. Nuclear power, if it comes, is a story for the 2030s but really for the 2040s. Labor is divided about gas but united against nuclear.
Where do those truths lead? They lead to gas. The Peter Dutton-led team needs to reposition on energy and run on a combined nuclear-gas policy or, even better still, on a gas-nuclear policy, in that order with that priority. That’s a big change from present Coalition thinking, but it’s essential for the Coalition in the release of its energy policy.
Beware the politics concealing the reality. Australia is heading into a huge political conflict over nuclear – but in the near-term run to 2030, Labor policy focused on renewables is floundering amid inadequate renewables investment, rollout problems, system reliability dangers and emission reduction targets seemingly falling short.
Despite assurances, it’s a mess. The regulators are warning. The Albanese government is now highly vulnerable on energy – from attack by the left and right. It has recently done a pro-gas realignment driven by Resources Minister Madeleine King, an essential but telling effort to bring realism to the present crisis. But the initiative has sparked a backlash from the political left, showing that gas is politically anathema across the Greens, teals, activists and Labor Left.
But Labor is united knowing one thing. It wants a debate on nuclear. Indeed, Labor can hardly wait. Its only dread is that the Opposition Leader will retreat. But Australia risks getting itself into an artificial ideological contest – renewables versus nuclear – at the next election. That contest is not about now. The long run is important but the nuclear debate has no relevance for the 2030 targets.
There are two realities about nuclear: there will be no private capital devoted to a civil nuclear industry without political bipartisanship, and there will be no nuclear industry in this country without state government authorisation since on-the-ground energy policy is run by the states. Think about those limits.
The nation deserves a debate on nuclear. The ban on nuclear is the act of a dumb nation that puts ideological prejudice before rationality. Labor brands itself by backing the ban. In this growing climate of hysteria, anti-nuclear is becoming a renewed Labor faith, hollow inside but aggressive outside.
Anthony Albanese and Energy Minister Chris Bowen can hardly wait for the starter’s gun. For the Prime Minister, this is familiar territory. Bowen told these pages on Tuesday morning the next election “will in no small part be a referendum on nuclear power”. He wants to kill the Coalition’s policy before its release.
Labor’s attack, as Bowen signals, will focus on economics and location. His mantra is that nuclear is financially untenable. Labor thinks the Coalition is fooling itself about the extent of public support for nuclear once the contest becomes a renewables versus nuclear binary campaign.
Opposition energy spokesman Ted O’Brien is undeterred. The Coalition intends to roll out a massive transformation in Australia’s long-run energy policy leading to net zero at 2050. Replying to Bowen, O’Brien told this column: “The facts are on our side. When nuclear is part of a balanced energy mix, then energy prices come down. This is the experience the world over and there is no reason to think it won’t happen in Australia.”
The Coalition’s present thinking is for nuclear sites to be located at closed coal-fired stations. The truth, however, is that government support for nuclear will be essential – just as the renewables industry has grown off the back of huge public subsidies.
The Grattan Institute warns that Labor’s target of 82 per cent renewables by 2030 “looks unachievable”. It says the national electricity market “is operating closer to the reliability edge, more often”. In an act of ineptitude our leaders have promoted renewables making coal-fired power non-viable, forcing the decline of coal-fired stations, thereby creating reliability problems in the system, consequently necessitating a rethink to keep coal open and reprioritise gas.
Got it? The blundering is massive. Policy is now split between realism and ideology. Witness the reversal by NSW Labor to keep open for a further two years the Eraring coal-fired power station at a potential cost to taxpayers of up to $450m, with Premier Chris Minns saying it guaranteed “certainty for households and businesses”.
Enter King’s initiative a few weeks ago. King has tied Labor’s Future Made in Australia, reviving manufacturing and the imperative for energy reliability, to a “medium and long-term strategy” to expand the role of gas. This is a correction – to repair the anti-gas ideology that engulfed the Albanese government and the ALP for most of its first two years.
But this ideology can’t be purged; witness ALP politics in Victoria. Labor is split on gas depending on the state and territory, Victoria and the ACT being the anti-gas spearheads.
King said “gas will be needed to support our economy’s transition to net zero” at 2050. She said the government, for the first time, had done the work to sort out “the role of gas” in the future. Gas would be fundamental in helping to reach the 82 per cent renewables target while keeping system reliability. She was emphatic: “New sources of gas supply are needed to meet demand during the economy-wide transition.”
King told this column the new policy was based on “facts and reality”. What does this say about the critics, many in the caucus? Asked if it was hard to get cabinet on board, King said: “I don’t want to go into cabinet discussions. But this is a sensible, pragmatic government. The gas strategy is based on a lot of research. This government is guided by the science, the industrial need and for consumers to have affordable gas.
“Extreme views are never helpful,” King said. She attacked both the previous government’s slogan of a “gas-led recovery” and the climate activists’ chant of “no new gas”, saying “they are as equally unhelpful as one another”.
King said: “No new gas is easy to say but would be impossible to achieve in an economy that does, in fact, need this fuel. It is also impossible to achieve when you have the third or fourth largest economy in the world that relies on that gas. I, for one, am not willing to stand by and see great cities like Tokyo going dark because of a slogan that’s ill thought out and oversimplistic.”
She said the gas industry had an obligation to reduce its own emissions but hailed the industry as “one of our country’s great economic successes”. How politically tenable is King’s stance? Her new policy has been openly attacked by a conga line of Labor MPs in acts of public defiance. The chasm between this policy and the Victorian government is vast.
The Albanese government, moreover, just did a deal with the Greens to secure the petroleum resource rent tax, but by deferring draft laws to speed up offshore gas projects. Greens leader Adam Bandt boasted coal and gas giants could expect “more blows to their climate-destroying expansion”.
“This is just the beginning,” Bandt said. The centre-left of politics is riven on gas policy. Do senior ministers really believed in King’s strategy?
Asked about gas, O’Brien gave a revealing answer: “We will continue to embrace renewables and other forms of technology as part of a balanced energy mix. But nothing is more important in the short term than putting more gas into the energy system. For the Coalition, all roads lead to gas.”
It’s surely a signal – wait for the Coalition to run far harder on gas.
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