Everyone can breathe a sigh of relief. The threat of bipartisan energy policy in Australia has been averted. The Morrison Government has converted its COVID-19 Co-ordination Commission into a political stalking horse to create a new and deeply satisfying political divide around gas.
Gas can be a climate solution or protagonist, depending on what you do with it. Switching from coal to gas fired generation was the first big driver of major emissions reductions in Europe and the US.
Gas is more flexible than coal, making it much better suited to firm intermittent renewables like wind and solar. during his review of the reliability of the National Electricity Market the Chief Scientist Alan Finkel pointed out that gas was likely to play a critical role in enabling increased uptake of renewable generation in the short to medium term.
Major energy companies like AGL are switching out of coal fired generation and older gas fuelled steam generators (like Torrens Island Power Station A) into renewables and very fast start gas reciprocating engines like its new generator at Barkers Inlet in South Australia.
Companies like Jemena are exploring how to reduce the emissions from the existing gas network by blending in renewable biomethane into its gas networks. The idea being that an increased blend of biome thane and hydrogen could eventually replace conventional fossil fuel methane.
Framed like this, gas is a key transition fuel to a low emissions, renewables based energy system.
The Morrison Government’s National COVID-19 Commission has been leaking draft documents promoting a gas-led economic recovery since May. Its various big ideas include building a $6 billion west-east gas pipeline to bring west-coast gas into the eastern market, domestic gas reservation policy, subsidised gas prices for manufacturing and Federal Government underwriting for new gas pipelines.
While the NCC chair Nev Power continues to make claims then back away from them, the political intent of the task force has become clear. Former Labor frontbencher and ACTU boss Greg Combet politely excused himself from its ranks at the start of July. Starting a political war is a prestigious line of work with a long and glorious tradition.
The Federal Government has now started to move in behind the gas smokescreen, announcing it was developing a gas plan to drive economic growth post-pandemic. Prime Minister Scott Morrison hinted this would include multi-billion dollar infrastructure investment.
Labor has taken the bait, indicating it would oppose the gas-led recovery approach, saying the money should be invested in renewable infrastructure instead. The announcement broke an uneasy silence. Labor had been gently backing away from carbon pricing as it appeared possible that both major parties might align on new national programs to fund energy infrastructure.
But not now. It’s a return to the traditional positions on energy: jobs, growth and prices versus a clean and green future. Of course gas is part of both narratives. but it’s how you say it.