By Eric Worrall – Re-Blogged From WUWT
Q+A sees Australia’s gas energy future questioned, Matt Canavan defends call to leave Paris Climate Accord
By Paul Johnson
Australia should be wary of a gas-fired energy future which would be shunned by investors and could leave it struggling to find export markets, Q+A was told on Monday night.
- Panellists discussed Australia’s energy future and the move to renewables
- Concerns were raised that investors may not get on board and back Australian gas
- Nationals MP Matt Canavan defended his calls for Australia to exit the Paris Agreement
Zoe Whitton, from the Investor Group on Climate Change, sounded the alarm during an episode dedicated to Australia’s energy policy.
Asked if gas was “our way out of this downturn” by host Hamish Macdonald, Ms Whitton said she “deeply doubted” investors would pay for the sort of investment in gas envisioned by the government body charged with charting Australia’s economic recovery from COVID-19.
“But … we don’t want to get ourselves to a point where we’ve made a really big investment in gas and then, in 10 or 15 years’ time, no-one wants to buy.”
Ms Whitton, who also works on energy policy for investment bank Citi, said gas was making investors nervous.
“Investors are very uncertain and hesitant about it. That’s the gas that we already have in the ASX. That’s not talking about a gas-driven, domestic expansion, recovery-type scenario. So they’re already anxious about it, and they’re already questioning it,” she said.
Queensland Nationals senator Matt Canavan questioned Ms Whitton’s assessment, and talked up the chances of a global gas boom.
“I don’t know what market Zoe is looking at,” Senator Canavan said.
“She’s saying that investors aren’t investing in gas right now — we’ve had the biggest boom in gas in the world’s history. In fact, the biggest boom in oil as well, on the back of the shale revolution in the United States.
“Where is all that money coming from, Zoe?
“Investors are piling into gas. They’re not piling into our gas, because there is a fundamental problem with our gas, it’s at the higher end of the cost curve. That’s an issue of geology, not of climate politics.”
Australia may have also frightened off investors with surprise moratoria on exploration and fracking.
For example, the Victorian state government, which is pushing hard for coal plants to be closed, only grudgingly lifted its onshore exploration ban in March. Coal seam gas and fracking are still banned – a ban on fracking is being written into the State constitution. Victoria is one of Australia’s premier manufacturing centres.
Victoria lifts moratorium on onshore gas, but permanently bans fracking
The Andrews Labor government in Victoria has announced it will lift a moratorium on the exploration of onshore conventional gas reserves, but will enshrine a permanent ban on fracking and coal seam gas exploration in the state’s constitution.
The Victorian government will introduce two bills to parliament, with one effectively lifting a moratorium and allowing for a restart of onshore conventional gas exploration from 1 July 2021.
The second bill will seek to amend the Victorian state constitution, enshrining a permanent ban on fracking and coal seam gas exploration. Such amendments can be passed by the Victorian parliament, and it may not be necessary to be put to a vote by Victorian electors.
In lifting the moratorium, Victorian premier Daniel Andrews said his government is responding to scientific findings, as well as delivering on an election promise to include fracking ban into the state’s constitution.
“We’re backing the science to create jobs, boost energy supply and support regional communities across the state,” Andrews said in a statement.
“We promised to enshrine our historic ban on fracking in the constitution and we’re delivering – to protect farming communities, and our huge food and fibre sector.”
Imagine you were an energy investor, or an industrialist looking for a location to build a new factory.
The Australian government attempted to switch from coal to gas, while at the same time state governments banned or heavily restricted exploration and cost efficient gas extraction. They taxed coal plants into the ground, then offered subsidies when coal plant operators started closing.
To add to the fun, Australia’s chief scientist is off on his own tangent, pushing for Australia to ditch coal and gas, and focus on a hydrogen export economy, on the evidence free claim that there is huge demand for expensive green hydrogen produced using renewable Energy. But for some reason the new hydrogen economy needs lots of government support, even though its a hugely profitable opportunity.
Don’t forget, The Australian Government is keen to revive heavy manufacturing, to boost jobs and prosperity. But if anyone falls for the sales pitch, they might discover Australia has an expensive carbon emissions trading scheme, which only applies to large emitters, which they keep so quiet even Australians are mostly unaware it exists.
I think it is fair to say the policy position Australia’s governments present to international investors is a little incoherent.