Victoria’s gas backflip is an admission that net-zero talk is cheap
Victoria’s backdown on banning gas appliances is a rare show of common sense as well as an admission that the net-zero transition is easy to talk about but hard to deliver. Premier Jacinta Allan’s new emphasis on offshore storage and gas imports from overseas demonstrates the folly in the repeated demonisation of the fuel source that was always going to be needed as coal-fired generation was switched off. It is more gas production that is required.
Allowing households to keep cooking with gas recognises this is what many people want to do. It also limits the awkward politics of cutting people off gas for electricity at a time when the Australian Energy Market Operator is warning that electricity supplies in Victoria, NSW and South Australia might run short as early as this year. At least with gas, unhappy households can still boil the kettle for a cup of tea when the lights go out.
The bigger picture is overly ambitious claims about the speed with which energy-hungry states can wean themselves off fossil fuels are colliding with reality. Demand for gas recognises the limitations of renewable energy sources that cannot be relied upon to supply electricity on demand. It also is an admission that the Victorian road map, particularly a rollout of a large offshore wind industry, is not going to be as smooth or as quick as has been promised.
The delays are shared by all states and the commonwealth, which is leading to speculation that the Albanese government might not be ready or prepared to disclose its greenhouse gas cuts ambitions for 2035 before the federal election.
The Matt Kean-led Climate Change Authority has doubled down on the need to invest in wind, solar and batteries but says it is not ready to make a recommendation to government on future targets.
The scent of retreat comes as the Albanese government increasingly finds itself at war with miners and gas producers. Anthony Albanese on Monday told the mining sector not to “embrace conflict over co-operation” or the nation would miss the opportunities of the global transition to net zero. But industry is gearing up to push back against the federal government’s industrial relations laws, which threaten productivity and investment. The Australian Minerals Council has accused Labor of deliberately bringing conflict to every workplace and industry in the country through “reckless” industrial relations laws. Government actions lift sovereign risk and threaten future investment in energy resources and commodities. Resources Minister Madeleine King has been sending mixed signals since announcing the commonwealth’s new Future Gas Strategy in May. As reality starts to bite on the net-zero transition, fixing this mess must be the priority. The federal government must rethink its approach and stare down the Greens and reluctant state governments, and encourage companies to get on with it.