Via the AFR comes Australia’s BCA head and chief energy wrecker, Grant King:
“In the last four terms of parliament, two under Labor and two under Coalition governments, we have lurched from one extreme to the other in terms of policy outcomes,” Mr King said on Monday night.
“The most recent idea from government has been an idea the ACCC itself called ‘extreme’ and warned against – breaking up electricity companies.
“This ignores all the other actions and recommendations recommended by the government’s own experts that could be done now to help drive down electricity bills.”
Now look, there’s not a lot of point in constantly reminding ourselves that it was Grant King’s Origin Energy that helped create the east coast gas cartel which is the primary energy wrecking ball in Australian decarbonisation.
Or perhaps there is. I mean, here he is enjoying a lobbying sinecure which he uses to lecture the nation about policy failure when the truth is he was shoved out of ORG for his great gas malinvestment and was blocked from joining the BHP board because of the damage he’d done to the ORG share price.
Yet the business identity state has recycled him as some business and policy guru, simply because that’s what it does, not because he is actually worth listening to.
So, one more time for the dummies. Grant King helped build the Curtis Island LNG export cartel which is the ONLY reason that Australia’s gas and power prices have gone through the roof in the past few years.
After creating an artificial shortage of gas on Australia’s east coast, King’s ORG mercilessly gouged everyone, applying discriminatory prices roughly 700% times higher than historical rates for gas. It was only stopped when the Turnbull Government applied domestic reservation to it which halved prices.
As we know, gas generation sets the marginal cost of electricity in Australia so King’s gouge also sent power prices to the sky.
Has there been policy failure since? Absolutely. But the only failure of substance has been to not bring the cartel fully to heal. Current gas prices are still 350% higher than historical averages. And that means that gas peaking plants, which offset renewable intermittency, can only operate at extreme prices which sets the marginal cost of power higher.
It’s not that government intervention was not needed to fix Grant King’s mess. It was. It’s just been applied in the wrong place to downstream electricity firms, instead of upstream gas firms.
That’s the irony. If the government had directly targeted Grant King’s energy wreckage legacy, it would now be enjoying collapsing energy prices and smooth decarbonisation.