Mad King is not up to it

This is garbage from the new Resources Minister, Mad King:

The energy market is littered with phony solutions. Interviewed by this paper, King says it’s time post-election for Australian culture to move beyond ideological battles over energy sources. Asked if the climate wars are over, the new Resources Minister says: “I hope so. If they’re not, then we’re in another toxic mess.

“The climate wars, for want of a better term, over 15 or 20 years have led us to this point. We need a sensible plan of action that looks at all the energy mix. That will be a combination of fossil fuel energy, coal for the moment, certainly gas for some time, but importantly renewables and hydro. Pitting them against each other or turning this into a political football – which we have done for far too long – has led us to this situation.

“My starting point is that all of our energy mix must be in the plan for the future. As things fluctuate, you have outages. The question becomes: how do we back them up? It’s gas right now. Will it be renewables in the future? It will, provided there’s proper investment and the battery storage capacity is built up.

“I want to make it clear: this current crisis is not just about the gas companies. There are international factors at work, the Ukraine, but also the lack of coal-based energy transmission that is playing an enormous role in driving up the need for more gas.

“We need coal to be part of the immediate short-term answer. Manufacturers and consumers in NSW and Victoria need these coal power sources back online. Gas suppliers are already doing what they can. Gas is going to be a fundamental part of our transition to net zero. Labor has been saying this in opposition. We will continue to say it in government. Gas will be a very important part of our energy mix while we increase stability around renewables.”

King rejects talk of redirecting export gas contracts or pulling the so-called gas trigger – the Australian Domestic Gas Security Mechanism that forces gas exporters to divert supply to domestic users. The real value of the trigger lies not in its use but as a threat to bring all parties to the table and get concessions. Some gas has been redirected in recent days. The trigger has serious limitations and cannot be used until January 1.

“The Domestic Gas Security Mechanism is not the answer to the current problem,” King says. “I think everyone can now acknowledge that. In addition, it doesn’t matter how much gas you want to take from the export market if you don’t have the pipeline capacity to bring the gas south from Queensland.

“There are a number of gas developments that will increase supply for next winter but they still have to go through state-based approvals. The southern states of NSW, Victoria and South Australia need to have proximate gas sources. That just makes sense. I have no doubt their energy and resources ministers will be thinking about that issue.”

King says the gas sector in Australia is an international industry, from Gladstone and Curtis Island to Woodside’s Scarborough development. She says: “We need to respect our international partners and respect the role Australian gas will play in reducing the emissions of our regional neighbours and our partners like Japan and South Korea. Scarborough is enormously important. Woodside has international investors strong on their commitment to net zero at 2050 and they will need Australia’s gas and Scarborough’s gas to get there. Scarborough is the type of field Australia should be proud to make use of and contribute to the global push to net-zero emissions.”

Should the east coast duplicate the west’s gas reservation policy? King is unconvinced, given the east coast industry has been up and running for years. “It’s very difficult to reverse engineer a domestic gas reservation policy,” she says. “In hindsight, it might have been a better thing to do on the east coast, but reflecting on that doesn’t really help the current situation.”

All rubbish: there is no pipeline issue if you domestically reserve; the gas is mostly going to China not Japan and Korea; more local supply will not drop prices without blanket reservation to prevent portfolio arbitrage; more coal turbines will not drop power prices given coal prices.

You decide if Mad King is corrupt or just drowning.

The crisis is simple. A dozen or so war-profiteering energy firms – both gas and coal – are imposing insane international prices upon super cheap domestically produced energy.

Arguably, the Australian Government should confiscate all of these earnings via an export levy benchmarked to pre-Ukraine prices. That would crash local prices too, as well as pour scores of billions into the budget.

But, at the very, very least, the domestic price gouge must be stopped. To do that the government must break the link between global and local energy prices.

We only consume 5% of our own gas. We only consume 17% of our own black coal. These volumes can be sequestered from international prices using any number of mechanisms:

  • domestic reservation;
  • regulated pricing;
  • war profiteering levies and/or end-user subsidies;
  • nationalisation.

There are heaps of policy weapons to break the international price link. They just take balls.

The politics and national interest is equally simple. It is not a question of pipelines, stakeholders, complex systems or great transformations.

It is one simple calculation. Do you want to back a dozen or so blood-soaked firms making extreme profits or do you want to back the income and wealth of 28m voting Australians?

Houses and Holes
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Comments

  1. “We need to respect our international partners and respect the role Australian gas will play in reducing the emissions of our regional neighbours and our partners like Japan and South Korea.

    We do this by disrespecting the Australian citizen?

    Who do the resources of this country serve? Who does our parliament serve?

  2. Display NameMEMBER

    Can Labour stand up for the average tax payer? This may well set the tone for the rest of their stay in power. Giving money to consumers to further enrich the Cartel is the worst possible outcome.

      • bolstroodMEMBER

        There is only one thing that will turn King and Labor away from this maddness and that is the roar of anger from the people of Australia., and the earlier in the term of this government it happens the better the effect.
        You are doing fine work David keep going you are gaining support .

    • Yes, looking very likely King has already made up her mind & obviously doesn’t understand some key factors or the magnitude of the situation, she will turn me against them within a month of voting for them (well putting them ahead of LNP at least). The LNP will have a field day instead of Labor seizing this historic moment to put into place policies they are supposed to support ie ordinary peoples interests.

      • happy valleyMEMBER

        The LNP must be absolutely shvtty that the election couldn’t have been delayed another few months because they could have shown us their cajones on this matter, having screwed up over the previous 9 years.

  3. It is very complex, when it should be simple. We elect a local candidate, that candidate is given a large portfolio to manage. That is the system, the complexity is does that politican have the skills to analyse information and make forward thinking decisions, just because they were elected and appointed the portfolio doesn’t mean that have the necessary skills to drive positive outcomes for the country.

    • tuohyredMEMBER

      Frank, fearless and informed avice from APS is not available to her after LNP gutted & politicised APS.
      Also, why is non-alignd Andrew Leigh sidelined. Probably smartest person of ALP MPs.

  4. Because our partners, umm.., I mean, our opponents, because they didn’t do anything about this for the last 12 years, that means, we can’t do anything about it now.

  5. Grand Funk RailroadMEMBER

    Ah, King is a female ALP Minister

    There may be resistance to the idea she may have flaws

    • I think the cartel firms have offered briefs on the issue and they have won her over with charm, technical issues and bs. She has then recycled said bs to the media not knowing her error and not being picked up by an equally stupid media. That or she is corrupt.

  6. SoCalSurfCreeperMEMBER

    She comes across as naive. As a lawyer you would think she might have some negotiating chops. But no. She just laid down her hand for all to see. Even a credible threat to pull the trigger would bring them to the table.

    • I never understand why so many on the left do this, the gas cartel must be celebrating already. Like Biden saying he won’t supply arms that can reach deep into Russia to Ukraine, no you keep that as a threat to use as leverage.

      • It just seems that the LNP believe the same crap that the LNP believe – that intervention would ruin our reputation. But it won’t.

        Enacting reservation would be a once-off hit that the market would understand is done, once done, and we can all just get on with it.

      • The last time we stood up to the mining companies, Rudd got rolled.

        These companies don’t F around you know.

        “What do you mean saying its your gas?”

        We just need to recognise the truth. Maddy does.

        • I think it’s an inapt comparison.

          That was about some *waves hands* far off away issue (which is here now).

          I think most people understand the issue: our gas, taken offshore and not enough at a decent prize for the citizens. I think people’s compasses are finely tuned to big companies paying no tax, taking the gas all whilst granny freezes and manufacturers start sacking people.

          Or not.

          I guess my point is the imbroglio about the RPST != this.

          The govt has a clear response to mining squeals. “Well they’re taking our gas for $3, selling most of it offshore and our price is tied to the open market. If we do this, we keep it here and you pay less”

          • I think you’re overly optimistic.

            Have they drained the swamp already?

            Have all the evil, large & smelly creatures wandered along?

  7. RomulusMEMBER

    It’s like Labor want to repeat the mistakes of the Dems in the US. The longer they take to pull the trigger the more pain they are going to cause. Can just hear the LNP jingle getting replayed again – We told you it wouldn’t be easy under Albanese

    • Labor, like the Dems, are all part of the same party. This party is the same that the Repubs and Libs belong to as well, it is the party of the elites, and it blows my mind after all these years of evidence supporting this fact that people still think otherwise.

      Don’t expect labor, or any other major party to help anyone but the 1% in any meaningful way.

    • There’s a hole in your head dear Madeline dear Madeline.
      There’s a hole in your head dear Madeline dear Madeline

  8. Diogenes the CynicMEMBER

    My impression is that Ms King just isn’t that sharp. A huge mistake to have someone filling a seat when decision making is required.

    • She is the member for my seat. I’ve met her a couple of times, including at the booth I voted at 2 weeks ago.

      Brand is on the “ALP will never lose this seat”, and prob the only one in WA.

      She is the embodiment of a quota hire, and when reffering a quoote above “Yes, looking very likely King has already made up her mind”

      No, someone else has made up her mind for her.

      • This hardly inspires confidence:
        -Research Contracts Lawyer for the University of Western Australia from 2005 to 2008.
        -Chief of Staff for the University of Western Australia from 2008 to 2011.
        -Ministerial Adviser to the Hon. G Gray MP from 2011 to 2012.
        -Director of Centenary Celebrations and Principal Adviser of Strategic Projects at the University of Western Australia from 2012 to 2013.
        -Chief Operating Officer at the Perth USAsia Centre from 2012 to 2016.

        • Perth USAsia Centre: a leading thinktank for “FORGING STRONGER RELATIONSHIPS BETWEEN
          AUSTRALIA, THE INDO-PACIFIC AND THE U.S.”, with corporate sponsors including Chevron, Woodside, Rio Tinto and Inpex

        • This is the issue, would you ask a plumber to do brain surgery, of would you ask a brain surgen to plumbing in your new toilet.
          We ask those that have little knowledge and experience to be make large decisions.

  9. balestearMEMBER

    I am surprised at the article. At least you stopped short of nationalisation. Your consideration in trying to be balanced could also have included political risk and all the implications that go with this.
    I did not detect too many tears when the same profiteers were having to write-off billions of dollars. They did stand up and make the investment to extract and process the gas. Sometimes one gets few opportunities to recover investment and now, as soon as it occurs, you call for a tax to remove the rewards of risk taken. Are we a country where investors can count on certainty or will laws blow in the wind every time someone feels things are unfair. Do not support your view.

    • Display NameMEMBER

      They over committed their capital. They took a punt (read risk decision) that there would be enough gas and there is not without raiding the domestic “market”.

      They are big boys, multi nationals, pay no tax , pay almost no resource rents and employ very few people.

    • Well, when they discovered they didn’t have the coal bed methane resource out the back of Qld, why didn’t they take a financial hit. But now they just hoover up all gas along the Eastern seaboard and Bass Straight to ensure the over built (and over expensive) plants run at full capacity (minimal op cost). What a bunch of bogans this country is.

    • Ronin8317MEMBER

      You miss out on the part where they lied about ‘having enough gas for export and the domestic market’.

  10. reusachtigeMEMBER

    LOLOLOL! I love how in pain this is making you!! All free enterprise should be free to maximise their profits, always!!

  11. There absolutely is a pipeline issue. Westernhaul capacity of the SWQP is about 400TJ/d. We hit that earlier in the month. Either need to expand that capacity or NSW/Vic need to develop some gas in state.

  12. I sent this to my federal Labor member last week. – https://www.news.com.au/finance/economy/australian-economy/reason-china-is-getting-aussie-gas-cheaper-than-australians/news-story/6f09e40a5028688ae2e5ae50bc7d1977 – With a mention of their tax dodging angle.
    —————————
    The answer I received, on my Reps behalf…..
    Australian energy markets are facing a perfect storm. A number of factors are at play in the challenging situation with electricity and gas in particular.
    There’s the geopolitical situation around the world. We’re facing some power station outages and some flooding impacts on coal mines and an array of other factors.

    This challenging situation did not happen overnight, and there is not an overnight solution.
    Over the medium and long term – Labor’s Powering Australia plan – to get more cheap renewables, storage and transmission, is the key to protect Australian energy resilience and affordability.

    Over the short term – AEMO has already instituted the gas supply mechanism which will have some effect over coming days, they have instituted a price cap which is helping in the short term.

    Energy Minister Chris Bowen has spoken to all state and territory energy ministers, the market operator and regulator and is convening a meeting early next week to together assess chart a path forward.

    Importantly, the Treasurer has asked the ACCC to dial up monitoring and transparency of prices, investigate any concerns about misconduct or anti-competitive behaviour and take action where required, including advice on regulatory changes.

    I hope this helps to explain some of what Labor is doing to address this issue.
    —————————–
    I was underwhelmed by depth, breadth & substance, but maybe I expect too much.

    • There was a 2nd iteration of the D-Generation called “The late show”, and one of the regualr skits was Rob Sitch doing parody interviews. There was one in the midst of the 1993 election, and he was resembling John Hewson….

      The interviewer played by Tom Gleisner said something, the Hewson chatracter said “I’m more interested in the issues that effect real Australians and I challenge the Prime Minister, Ii challenge Paul Keating) to respond …”

      Gleisner hits back saying “Too respond to what?”

      And The Hewson character sits silent with a vacant look on his face, portraying not having the depth of intellect to understand what is or should be challenged, finishing with “To respond to my challenge”

      “Which is?

      “I don’t know.. just a general challenge”

      https://www.youtube.com/watch?v=NOQzp7BAF48

      Put that in email form, that is what you received.

      • Yeah. I was going to answer with more pointed questions, but thought it’d be a waste of time considering this vacuous answer…. so they won, already.

    • RomulusMEMBER

      I’d politely tell your MP – you completely understand that this problem did not happen overnight but they are in the ones in power now and they will own the state of the economy come the next election.
      If they do not act quickly on providing a significant short term relief they are going to cause significant damage via inflation, cost of living pressures, businesses going bust which will take many years to recover if ever.

      • Your angle is a good start…… inferior economic managers comes to mind as well……

  13. Jumping jack flash

    Once again we get people in charge of the business of private companies, who know nothing about the business or mechanisms of the private companies or sector they’re put in charge of, and the wool gets pulled.

    Every time.

    If the government’s appointed people don’t know anything about the jobs they’re given, then either train them, or replace them with people that do know enough to break through the obfuscation. This is fundamentally the same problem we’ve had with our leaders for decades and because of that, nothing ever gets done. Its either that, or corruption I guess.

  14. Tangent, I know, but why is Geothermal not a much bigger thing than it is?
    You can literally pick anywhere on earth and if you dig a deep enough hole, you can make steam.
    Some places are better than others, but either way, you just dig the damn hole and enjoy decades of energy.

    • The best geothermal resources in Australia are billions of dollars worth of transmission away from where the electricity demand is.
      My first go on the ASX was buying into a company called Geodynamics, which burnt through tens of millions to get a 1MW demonstration system up and running in the Cooper Basin then found out that the cost of the electricity wasn’t competitive even before factoring in the cost of transmission to get it to the national grid.
      Fully did my dough on that one, but it was exciting at the time as they were at the frontier of deep drilling in Australia with what was then the largest rig in the country and going over 4km deep.

      • There’s a natural hot spring in Mornington, Melbourne.
        Surely that’s a prime location to build one. Close to transmission, and it’s obviously shallow. Maybe a k or so before you hit the good stuff. Wonder why no one has?

  15. The trigger has serious limitations and cannot be used until January 1

    You are in government now. Pass your own law that avoids those limitations and that CAN be used immediately.