Albanese’s ‘visionary’ gas policy rejected by Labor a decade ago

The Albanese Government is facing a new clamour about energy prices and demands to increase domestic gas supply. Picture: Getty Images

Just ten years ago the then Labor government rejected outright the very proposal to preserve 15 per cent of Australian gas production for domestic use on the eastern seaboard which is now being considered as part of an emergency answer to apocalyptic gas shortages.

Last Friday Anthony Albanese said on Perth radio that the Western Australian policy of reserving 15 per cent of gas production, which WA Labor Premier, Alan Carpenter introduced in 2006, was “visionary”.

The Prime Minister also said Labor “did argue for the capacity of a domestic gas reservation for a period of a long period of time”.

Albanese said the former Coalition government rejected the idea but “then eventually put in place a trigger” to temporarily limit exports and increase domestic supply.

“But that trigger, if it was fired off, if you like today, it wouldn‘t change anything until at least January next year’, he said.

The new Labor government is now considering pulling the trigger on the gas supply mechanism to limit exports. It is meeting State and Territory energy ministers on Tuesday and has left open the option of introducing a limit on gas being exported to preserve gas for the domestic market.

But in August 2012 the then Gillard Labor government rejected a proposal from its own task force into how to protect jobs by maximising Australia’s natural advantages with a domestic gas preservation scheme based on the WA model.

Of the senior Labor leadership in 2012 when domestic gas preservation was rejected there are now 13 who were then in Cabinet or the outer ministry, including Albanese, Chris Bowen, Tony Burke, Penny Wong, Richard Marles and Bill Shorten, and the new Treasurer, Jim Chalmers, was the chief of staff to the then Treasurer and Deputy Prime Minister, Wayne Swan.

After a decade of growing antagonism against gas as an energy source among the renewable lobby, the Greens, the new Climate 200 independents and sections of the ALP itself these newly-minted government ministers face huge political and policy decisions which may not go anywhere near satisfying the election promises of lowering electricity prices.

On Sunday in Perth Albanese said: “We had nine years of neglect from a government. Remember they used to talk about the gas-led recovery? They talked about that for years. Well, where is it? This is a government that sat on their hands, they had 22 different energy policies and didn‘t deliver one”.

The Gillard government’s 2012 manufacturing task force called Smarter Manufacturing for a Smarter Australia, included business and union representatives and recommended that “the government take action to ensure Australian industry has access to natural gas for the domestic market at fair and competitive prices”.

The task force cited the WA policy as a positive example, showed supporting evidence from industry and economists and also recommended a Nordic style sovereign wealth fund using revenue from gas production.

Carpenter said the WA system was needed to ensure gas as an energy source and had underpinned the export gas industry since the early 1980s.

After receiving the report then Prime Minister Julia Gillard welcomed in principle many of the recommendations but rejected the gas proposals.

“The government does not support recommendations in the report to further investigate a sovereign wealth fund and a domestic reservation policy for gas,“ she said.

Gillard also said the Australian economy was strong, with solid growth, low unemployment, contained inflation and a record pipeline of investment including more than $175 billion in LNG projects.

Domestic gas suppliers, consumer groups and unions were dismayed by the rejection of the domestic gas perseveration policy – which former WA Premier Alan Carpenter described on the weekend as “political idiocy”.

Gas prices at the time were $10 a gigajoule but spot prices for wholesale gas jumped to $800 a gigajoule last month and were capped, for the time, at $40 a gigajoule until later this week.

The gas industry argued, and still argues, that Australian LNG projects can’t go ahead without exports, that preservation doesn’t assist supply and crises, such as the oil price rise during the GFC, coal-fired power station failures or the Russian war on Ukraine, will still drive up prices.

Climate Change and Energy Minister Chris Bowen, Albanese as Prime Minister and Jim Chalmers as Treasurer all have said there is no quick fix or short-term solution and that even “pulling the trigger” on the export mechanism would not address the question of price.

In 2012 the Labor had been at war with the resources sector since 2009 when Kevin Rudd and Wayne Swan disastrously failed with a new mining tax aimed to raise $10 billion a year and in 2010 Gillard introduced a carbon tax.

The Albanese government is facing a new clamour about energy prices and demands to increase domestic gas supply and reduce prices and more than half the cabinet is going to have to revisit the issue of domestic gas preservation a decade on since the Gillard government rejected it and in a completely new global energy and political environment.