Gassed Up: All-In Policy Brawl Over Renewables Driven Power Pricing & Supply Calamity
The adage that success has a thousand fathers, whereas failure’s an orphan applies to Australia’s self-inflicted renewable energy disaster, one that no one wants to own.
The Federal Coalition’s ‘plan’ to power Australia with gas-fired power plants it has yet to build, with gas supplies it does not have, sounds more like the ‘last rites’ than a cure for its renewables driven power pricing and supply calamity.
While the state of Western Australia is merrily exporting megajoules of gas from its offshore wells situated on the north-west coast, there is a distinct reticence amongst certain eastern states to exploit Australia’s gas reserves.
The People’s Republic of Victoria went so far as to ban the onshore exploration of gas, altogether. Back in March, Chairman Dan relaxed his moratorium to an extent: conventional gas exploration can commence in July 2021; but fracking and coal seam gas drilling have been banned in perpetuity.
In New South Wales, its Liberal government has been dragging its feet on the approval for dozens of gas projects for years, amounting to a tacit ban on gas exploration and a very real ban on exploitation.
Queensland has regulated the extraction of coal-seam gas to such an extent that it’s unable to fill promised export orders.
The result of which is that domestic gas supplies are tighter than a drum, such that local gas users (including power generators) suffer among the highest natural gas prices in the world.
The ACCC stated in its Gas Inquiry 2017-25: interim report, published in mid-August, that prices offered to domestic gas users in late 2019 and early 2020 ranged from A$8-11 per GJ.
That price compares pretty unfavourably with the price of natural gas in the USA – currently $2.13 USD per million British thermal units (MMBtu). Thanks to its shale gas and oil revolution, Americans have enjoyed natural gas prices of around $US3 per MMBtu over the last decade. This equates to about AUD $3.84 per GJ. So, the price of gas in the US is between one third to half the wholesale price in Australia.
In a nod to Soviet five year planning, the Federal government has been threatening to impose a domestic gas reservation policy, effectively withholding a substantial proportion of gas reserves which would otherwise be contracted for export.
Which brings us back to PM, Scott Morrison’s so-called Energy Roadmap.
To the uninitiated, the concept of employing gas-fired plants to replace coal-fired plants has a superficial attraction. One of them, The Australian’s Nick Cater is very excited about the prospect of using expensive gas – which is in short supply (see above) – as a substitute for coal – which is both cheap and abundant.
Turn off the bleating hot-air mob — time to turn up the gas
25 September 2020
Imagine the ancestors of the gas-phobic left, sitting around an uncooked carcass of a giant wombat, priding themselves on their refusal to rub two sticks together as they await the arrival of the next big thing — the thermo-sealed pyrotechnic oven.
Unrealistic expectations about the pace of technological evolution are embedded in the DNA of homo viridis, a people so impractical and preoccupied with sustainability that they would surely starve were it not for the subsidies they extract from the government.
Zero greenhouse gas emissions by 2050 has become their latest totem, a means of borrowing virtue from the future while remaining unaccountable when the project fails.
The real deadline for Australia is not 30 years hence but 30 months away. By then we will have made the decisions that will determine where we will find the additional 19 gigawatts of dispatchable power the market operator says we’ll need by 2040.
Fortunately, we are spoiled for choice.
Australia is home to 14 per cent of the world’s proven coal reserves and 30 per cent of known uranium resources, and has made the largest per capita investment in wind and solar generation.
Then there is natural gas, our third most abundant resource. In the great cavalcade of progress, the moment for gas has arrived. Breakthroughs in extraction methods combined with a revolution in bulk shipping give gas the potential to be more or less ubiquitous.
Until recently, at every stage of the evolution of energy supply — from wood to charcoal, and charcoal to coal and oil — denser sources of energy replaced more dilute fuels. Each transition reduced the impact on the landscape.
The forced adoption of wind and solar was a step in the opposite direction, from energy-dense fossils to energy dilute turbines and panels that make a greater impact on the landscape than proponents like to admit.
Whichever way you look at it, natural gas is preferable to coal. It can be cleanly extracted and invisibly transported through low-maintenance pipes. Gas generators require 25 to 50 times less water than those burning coal and emit up to 40 times less sulphur dioxide, less nitrous oxide and almost no mercury.
The transition from coal to natural gas began before the anxiety about climate change. It was the main reason total emissions peaked in the 1970s in the larger European economies. Technological advances that facilitated the large-scale extraction of gas from shale enabled US carbon emissions to fall by 13 per cent between 2005 and 2018.
On these facts, Scott Morrison’s endorsement of gas as an essential part of our energy mix should be chalked up as a win by the banish-carbon movement. But no.
Giles Parkinson, the excitable editor of Renew Economy, ranked the Prime Minister’s crimes alongside the US invasion of Iraq, the conquering of Britain by Julius Caesar “and just about every war in between”.
Parkinson has been in the beat-up business for a while. His credibility as the harbinger of the next great thing can be judged from the list of “hot Cleantech projects of 2012” he published a little more than eight years ago.
They included a 44MW solar booster project at the Kogan Creek coal-fired power station in Queensland, a project that had been granted $35m from the Renewable Energy Development Program and championed by Julia Gillard. The project proved impracticable and was abandoned by the Queensland government-owned CS Energy in 2016.
Then there was the plan to sequester carbon by growing algae. US-based company Aurora Algae was about to begin the construction of a 400ha plant near Karratha that could be in production by the end of the year, we were told.
The following year the company pulled out, blaming the cost of labour, the heat and the winds that covered the ponds with dust.
The Perth Wave Energy Project — a grid-connected, commercial wave-energy facility with a promised capacity of 2MW — also was declared hot.
The Australian Renewable Energy Agency took a shine to it, slipping a sly $13m to its developer, Carnegie Wave Energy. Another $10m in grant funding came from the West Australian government. The project never moved beyond the development stage, during which it delivered barely half of its capacity. The company has never reported a profit and narrowly avoided liquidation last year.
The faith that renewable energy advocates are willing to place in half-formed, untested ideas is constantly betrayed. Inevitably, their dreams are revealed as too expensive, too inefficient and brazenly underdeveloped, nailed to the perch with government subsidies and woke venture capital.
Even if they were to work, their boiler-plated capacity is barely worth noting compared with the size of the new capacity required.
Fixated on the perfect, the renewables lobby clutches at straws while rubbishing steady means of reducing emissions while powering the grid.
The lobby looks increasingly beleaguered as the reality dawns that wind and solar, the only scalable renewable technologies available, won’t cut it.
Quick-fired gas is the simplest, cheapest solution to the problem of intermittency. Increasing the availability of gas will increase the proportion of renewable energy in the mix. Perversely, the restrictions on the exploitation of onshore gas in Victoria led to higher emissions, forcing a reliance on coal and reducing the choice of back-up for renewables.
Practical, scalable and proven technology is anathema to the green intelligentsia, which prefers to beat the drum for technology always just around the corner.
The cleantech pipedream for 2020 is batteries, technology that we are told will let wind and solar generators sleep peacefully at night while the lights continue to glow. Right now, however, the biggest battery farm in Australia would hardly keep the Tomago smelter running for a bare 10 minutes. Unless the plant can start within three hours, it would effectively be dead, the damage too extensive to recommission.
While the starry-eyed, like Nick Cater, can wax lyrical about the future of gas, for Australia’s mining, mineral processing and manufacturing industries, the future started 20 years ago, when the Federal Government under Liberal PM, John Howard enacted his Renewable Energy Target.
In 2009, the ALP under Kevin Rudd extended and expanded the RET to colossal proportions, pouring subsidies worth more than $60 billion into chaotically intermittent wind and solar. Predictably enough, power prices rocketed and the grid is on life support, with routine power rationing occurring each summer in the states connected to the Eastern Grid, every time the sun sets and/or calm weather sets in.
The Labor Party – once revered as the ‘worker’s party’ is engaged in an almighty brawl over what its energy policy should be. Lunatics from its hard-left, like South Australia’s Mark Butler, harbour the delusion that we’re all a heartbeat away from an all wind and sun powered future (with a few thousand TWh worth of mythical mega-batteries thrown in, of course).
His own state – Australia’s wind and solar capital – is an economic backwater, suffering from the world’s highest power prices. But Butler is keen to visit the South Australian experience upon other members of the Commonwealth.
Labor’s gas stance ‘an insult to workers’
24 September 2020
Anthony Albanese’s staunchest union supporter has lashed energy spokesman Mark Butler for an anti-coal and gas speech labelled a “gratuitous insult” to blue-collared workers and regional communities.
CFMEU mining and energy national president Tony Maher, a longtime ally of the Opposition Leader, said Mr Butler “should know better” after calling coal and gas “fuels of the 20th century” that won’t underpin Australia’s future prosperity.
Mr Maher’s intervention will put pressure on Mr Albanese to distance Labor policy from Mr Butler’s proposals and accept more policy ideas of resources spokesman Joel Fitzgibbon.
“Mark Butler’s comments about coal and gas were a gratuitous insult to the workers and communities whose livelihoods depend on them. He should know better,” Mr Maher said.
“Disparaging remarks about industries that are so important to regional economies are not helpful to anyone.”
The Australian understands that Australian Workers Union national secretary Daniel Walton has been scathing of Mr Butler’s comments in conversations with Labor MPs and union officials.
In a speech to a climate change webinar on Wednesday, Mr Butler, a key Left faction ally of Mr Albanese, said coal and gas “come with a huge cost that to this day isn’t reflected in their price or in government policy”.
“We found ourselves with plentiful coal and gas in the 20th century, making us one of the most prosperous societies in human history on the back of these fossil fuels,” Mr Butler said.
“Now, 20 years into the 21st century, we know that coal and gas won’t underpin continued prosperity, whether for Australia or the rest of the world.
“The cost is the impact that these fuels have on our climate, and by extension on our health, our security, our safety and, of course, our continued prosperity.”
Nowhere did Mr Butler articulate Labor’s support of the coal and gas industries or say fossil fuels would be part of the nation’s energy mix for decades. Instead, he took aim at people who “cling to these fuels as if a future where their use winds down and eventually ends is also a world where our shared prosperity ends”.
Some Labor MPs were furious with the tone of the speech, one declaring “comments like this from Mark Butler is why it has become impossible for us to win in Queensland and Western Australia”.
Labor frontbencher Shayne Neumann said gas was “critical” to the economic future of Australia. “It is important for affordability of energy, it is important for manufacturing, it is important for households,” he said.
After coming under internal pressure over the contents of the speech, Mr Butler watered down his comments in an interview on Sky News when he said “gas is a critically important part of our economy and society here in Australia”.
“What I did say was not that it doesn’t play a role in our prosperity, it’s just that we’re not going to be able to base our prosperity entirely on fossil fuels in the way we did in the 20th century,” Mr Butler said.
Resources Minister Keith Pitt said a future Labor government would “result in the end of the coal, oil and gas industry in Australia”.