The always useful Andrew Liveras is back:
Top US-based executive Andrew Liveris has told America’s corporate bosses and Australian political leaders that paralysis over energy policy was a key deterrent to foreign investment in Australia.
During a private session last weekend in Washington, DC, involving leading US chief executives, visiting state and territory leaders and Prime Minister Malcolm Turnbull, the US-based Dow Dupont executive chairman called for the states and major parties in Australia to unify behind the Coalition’s proposed National Energy Guarantee.
He also browbeat NSW, Victoria and the Northern Territory over their moratoriums on onshore gas development, calling the bans “voodooism” and not science.
Mr Liveris, who acts as an informal manufacturing adviser to US President Donald Trump, told the round-table meeting in Washington that his company, Dow, wanted to invest in Australia “but needs a restoration of a competitive and reliable energy market”.
To this end, he said Dow supported the NEG and called on the federal and state governments “to get on and adopt it”.
“It is the best method for ending uncertainty and encouraging investment,” he said, according to a version of his comments provided to The Australian Financial Review.
Ideally, sure. But since nobody knows what the NEG is how can they get behind it? It doesn’t work in the wholesale market and has no emissions intensity setting so what’s the point?
Has Colin Barnett got a better idea? Via the AFR:
A $5 billion transcontinental gas pipeline could get off the ground with little or no taxpayer funding if government is able to strike the right policy settings, according to former West Australian premier Colin Barnett.
Mr Barnett will use a speech to the Australian Domestic Gas Outlook conference in Sydney today to spell out how federal and state governments could solve the east coast energy shortage by setting an appropriate framework for a pipeline.
Mr Barnett, who retired from state politics last month after 27 years in office, has been championing a plan for a pipeline that would connect WA’s large gasfields to the energy-hungry east coast market.
“It won’t be cheap gas from the west, but it will be affordable and it will be reliable,” Mr Barnett will say.
“The pipeline will provide security of supply and price, and can be built in a comparatively short period of time.
“What is required from government is a policy commitment to go ahead with the project and a determination to resolve all of the detailed issues that will inevitably arise. After all, it is our gas and our needs come first.”
Mr Barnett estimates the 3000km pipeline would cost about $5bn to build, and could feasibly charge a tariff of $3 per gigajoule of gas.
Wholesale east coast gas prices are trading between $9 and $12 a gigajoule, he said, compared with equivalent prices in WA of between $3.50 and $4 a gigajoule.
Potentially this could work if WA’s domestic reservation has capacity for it. WA production is roughly 3200Pj and the east coast shortage will grow to roughly 200Pj over a decade. So WA domestic reservation would need to expand 6%. I don’t know if WA has that kind of surplus such that prices would remain stable and dislocated from Asian prices. If it required more reservation to ensure price stability then why punish WA producers? Just do it QLD where the gas cartel so badly stuffed up.
And why privatise it? At $3Gj it’s expensive tolling. Government should build it and charge one third of that.
The boost to the east coast economy from reliably delivering wholesale gas at $5Gj would be huge. Moreover, it would instantly put Australian carbon transformation back on track with no need for more NEG fig leaves.
