Paul Kelly today:
In his speech yesterday, Deputy Prime Minister Joyce said a “conclusion” from Finkel was vital. He called for compromise all around, from the Nationals, the Liberals and Labor. He said policy must bring renewables forward as well as coal and gas in baseload power. The central task, Joyce said, was to secure investor confidence, whether for photovoltaic, wind, high-efficiency coal, gas or hydro. In passing, he praised the role of renewable energy in his own electorate.
Second, Turnbull needs to retain credibility on coal with his partyroom and much of the wider Coalition constituency. Joyce signalled the likely trade-off on a recent Sunday Agenda appearance on Sky News: he will back the CET scheme provided that the way lies open to a new coal-fired power station, and he endorsed the principle of government finance for such a coal project.
…There are two ways of managing the coal issue — in a gesture to the partyroom to give coal an option in the CET mix if investors are ready to back it or, alternatively, be more upfront, pledge to build a new coal-fired power station as policy in its own right and, since private investors are unlikely to finance coal, specify government financial support by hitting taxpayers.
…Turnbull needs a strategy that empowers him to attack Labor for compromising the economy, undermining our competitiveness and risking excessive price consequences with its ambitious 50 per cent renewables target and 45 per cent emissions reduction target. The Finkel report warned about the price to pay for targets beyond the Coalition’s 26-28 per cent. In truth, there is still plenty of product discrimination between Turnbull and Labor.
…But those conservatives who live in the rosy nostalgia from 2009 to 2013 are fooling themselves. Those politics are dead and buried. The easy options of walking away from renewables, repudiating the Paris Agreement and pretending coal is the key to immediate lower prices are long gone. This is grand delusion. Listen to Barnaby. He speaks now as a realist who wants a solution, not an Abbott-led crusade.
Turnbull and Frydenberg have put together a basket of measures: redirecting gas from export markets, initiating the new Snowy project, pressuring the states on gas exploration bans and authorising 49 out of 50 Finkel recommendations. What they need above all, though, is a grand bargain — that means the investment community as well as the partyroom.
The Turnbull government’s ability to run an effective campaign against Labor on energy pricing depends on the prior first step — getting a policy framework in place.
Thinking the politics can work short of a tenable yet compromise policy is truly delusional.
Does it really need to be all politics all the time, Paul? Is there no room at all for the national interest in your Coalition-marinated brain? None of the above, none of it, will lower energy costs for multiple years:
- the gas reservation mechanism is too slow and shallow. It let Santos off the hook because it did not force the Horizon contract into the domestic market;
- Snowy is an untested joke. No feasibility study, just a brain fart from an ABC comedy. It may never come and will be a decade at least if it does;
- embracing coal and Finkel? Make sure you embrace a child/adult, in the cellar/attic from the back/front going up/down as you turn left/right while you’re at it, and
- states are not going to frack, the people they represent don’t want it. NSW is a Coalition state.
The only way to fix energy is to break the east coast gas cartel. Gas sets the marginal cost of electricity in NEM. That is all there is. Electricity prices track gas, not renewables nor coal.
Yet your man, Malcolm, is off dining with three key leaders of the gas cartel begging for donations for the Coalition today.
The outcome will be that the further energy market adjustment needed will transpire via demand destruction. Households and businesses will lower consumption. If they can’t then they’ll close.
As volumes drop, the cartel will hike prices further to cover the shortfall.
That’s the only story that matters, Paul. Not whether to Coalition can blow enough smoke to blame Labor.
You’re as deluded as they are.
