Energy bosses demand action from Angus Taylor
Energy company chief executives have pushed back at Energy Minister Angus Taylor’s decision not to revive the National Energy Guarantee challenging him to explain how Australia will meets its international climate targets.
While Mr Taylor said the NEG was “dead” and Coalition had a mandate for their energy policies, including the topped-up Climate Solutions Fund, energy bosses said the minister needed to integrate emissions reduction into energy policy.
It comes as Queensland and Victorian Labor governments said they would “go it alone” on pursuing their ambitious renewable energy policies, in the absence of any federal leadership on climate policy.
Origin Energy chief executive Frank Calabria said industry, which had promoted the NEG as the bipartisan approach to energy policy, needed to move on from former prime minister Malcolm Turnbull’s abandoned policy.
But he said there were still many unanswered questions about the Coalition’s national energy policy, especially on emissions reduction.
“We can continue to discuss what we prefer but if the reality is it [the NEG] is off the table, then we will work with government on how we bring reliability obligations and emissions reduction together,” Mr Calabria said at the APPEA conference in Brisbane on Tuesday.
“I still think we need to work out how we bring all that together.”
Mr Calabria’s call for a national approach on emissions was backed by Santos chief executive Kevin Gallagher, Woodside Petroleum chief executive Peter Coleman and Shell Shell’s head in Australia Zoe Yujnovich.
Mr Gallagher underscored the need for clear energy policy that would help manage the transition to lower-emissions supply, if the NEG wasn’t going to be revived.
“I think it’s still very important that we get a clear energy policy from the federal government,” Mr Gallagher told reporters.
“We want to take the view that industry should work with government and government should work with industries and collaborate and consult and get something that we can get bipartisan support for. I think that’s absolutely critical.”
Mr Calabria said he was also concerned about the Coalition’s “big stick” divestment policy, which has yet to pass through Parliament.
“If it’s designed to actually break-up energy companies, I just don’t think that’s the way to go about bringing about lower prices for customers,” he said.
Labor – which is still shell-shocked after the recent electoral defeat – has yet to decide whether or how it will overhaul its national energy policy.
Labor had promised to reactivate the NEG and pursue a more ambitious emissions reduction target of 45 per cent by 2030, well above the Coalition’s 26 per cent to 28 per cent by 2030 target, as well as use electric vehicles to bring down industrial emissions.
The Coalition took a “small target” energy policy to the election, keeping the Climate Solutions Fund (formerly the Emissions Reduction Fund) and the so-called safeguard mechanism as the centrepiece of its climate policy but with thresholds not forcing big polluters to change their behaviour.
It also targeted keeping energy prices down through its policies on default market offers and the threat to break-up big energy companies.
The Morrison government said Australia would easily reach their international climate targets, including through the use of “carry-over” credits from the Tokyo agreement.
Mr Calabria said Australia still needed to ensure a smooth transition away from coal-fired power with the influx of cheaper, renewable energy.
“We are clearly interested in making sure this occurs in an orderly way otherwise what we will see is the price volatility and what we have seen over the last 18 months,” he said.
Mr Gallagher said Santos was leading a $50 million project on carbon reinjection in the Cooper Basin for long-term storage, a project that offered the potential to inject millions of tonnes a year of CO2, which would help towards emissions reductions targets.
“What we are looking for is policy that gives us the framework to incentivise that type of development and motivate others to participate in those sorts of things,” he said.
Woodside’s Mr Coleman said it was incumbent on both state and federal governments to give clear guidance to their regulators on carbon requirements and called again for national policy on emissions.
“At a federal level … what we want to see is consistency in approach as we go around the states. What we don’t want to see is the states sort of leapfrogging each other,” Mr Coleman said.
“I need some stability with respect to government policy and a clear articulation of what does Paris mean, in a very practical sense … so that industry and government can work together around ensuring that the community … can feel proud of the products that we produce.”
Shell’s Ms Yujnovich named climate change as the No.1 policy priority for the gas industry, pointing to the risks of deterring investment.
“We need a joined-up national energy policy that is consistent with our national climate change goals, helps to remove barriers to supply and reduces sovereign risk,” said Ms Yujnovich, speaking as chairman of the APPEA oil and gas industry association.
“We need to achieve this because poor or disjointed policy reduces investment attraction,” she said.
She said the “new political environment” brought about by the Coalition’s re-election “presents the best opportunity in a decade to deliver genuine policy reforms, including on energy and climate change”.
But Labor state governments were less than enthusiastic about Mr Taylor’s call for a bipartisan approach to national energy policy.
“It’s hard to get a bipartisan approach for a national energy policy when you haven’t got a national energy policy,” Queensland’s Energy Minister Anthony Lynham said.
“I think a bipartisan approach would be to revisit the NEG. Let’s go back and look at proper emissions reduction policy, look at proper retail reliability obligations.”
Dr Lynham said Queensland’s 50 per cent renewable energy target by 2030 was “set in stone”.
“And we are well on the way to getting there. We are doing the heavy lifting. Victoria and South Australia previously and WA, we are doing the heavy lifting on behalf of the nation,” he said.
Western Australian Premier Mark McGowan also called on the federal government to take some proper leadership on emissions reductions to help avert the problems that have arisen with the WA Environmental Protection Authority going it alone with its own carbon guidelines.
Mr McGowan said the lack of a national approach was evident in meetings he had held with LNG producers in February-March over the EPA’s proposal to set a zero-carbon rule for large new resources projects.
The EPA was forced by the government to scrap the guideline but is preparing to consult on tougher rules in the near future.
“It would be far better if there was a national Commonwealth approach to these issues that had a set of rules that were consistent across all of the states and the Commonwealth took the lead on these matters,” Mr McGowan told an APPEA members’ lunch.
“Unfortunately it appears at this point that hasn’t happened but I would hope there might be a change of heart on that nationally, there might be a greater effort to have some leadership on this issue nationally in coming months and years.”
Victorian Energy, Environment and Climate Change Minister Lily D’Ambrosio said they were not waiting around for the Morrison government to show leadership on energy policy.
“Australia can’t afford another three years of energy policy chaos in Canberra – it hurts jobs, increases power prices and does nothing to tackle climate change,” she said.
“We’re happy to look at proposals from the Morrison government but we’re not holding our breath – we’re driving investment in renewable energy through our ambitious targets and putting solar on 770,000 homes across Victoria.”