When did energy go in the Federal budget?

Federal Budget’s aren’t supposed to include energy. Energy policy is the responsibility of the states, while Canberra has jurisdiction for setting climate policy to deliver Australia’s commitments to international deals, like the Kyoto Protocol and the Paris Agreement.

So when energy gets $1.8 billion in a Federal budget, that’s political. It means the Government wants to be seen spending money in specific locations and on specific energy technologies, to reinforce its broader political messaging ahead of an election likely by the end of 2021.

The theme of the 2021-22 Federal Budget spending on energy is really just an amplification of the Government’s existing political narrative. This is: climate change will be solved by pushing new technologies, not constraining emissions, so that no one gets impacted in Australia.

So look: here is $1.2 billion to reduce emissions not by constraining anything, but by spending $639 million on a new offset scheme where we give money to poorer countries in our region to offset our emissions for us. It’s like getting your car washed.

Then there is $275 million to build more clean hydrogen export hubs, as apparently all the existing ones are going so well. In reality they don’t exist or hardly exist. We aren’t exporting any hydrogen at all.

There is another $280 million to capture and store more carbon from conventional fuels by capturing it, compressing it and pumping it underground. Sounds new. That’s because it is. We don’t actually do this, just talk about it and fund it. This has been going on now for more than 20 years. CCS works for sure, but it’s expensive. We cant keep pretending on tis: either push the technology along (unlikely) or let it go.

There is also $280 million to fund a below baseline crediting mechanism under the emissions reduction fund (ERF). Basically if a business has been given a generous allocation of emissions under the original ERF scheme, it can cash this in now. No emissions constraint, just more money going out!

There are the more obvious handouts: $30 million for Fortescue billionaire Andrew “Twiggy” Forrest to build another gas generator at Port Kembla. $76 million to subsidise Victoria’s Portland aluminium smelter to stay on until 2026. A microgrid in the (seat of Leichhardt) far north of Queensland. $25 million for C&I energy efficiency.

ARENA will get another $50 million for clean tech financing, which begs the question: what have they been doing up until now?

The bigger point is that the latest “budget” spend just reinforces the scale of government intervention in Australia’s ailing energy markets. Energy has become a political catwalk where governments strut up and down showing off their latest designs rather than supporting the efficient, low carbon operation of one of the biggest machines on earth.