Welcome to Futility Island
Australia’s role as the Global Renewables Crash Test Dummy continues.
Having installed more renewables per capita than anywhere on Earth, our PM declared that the decade of doing nothing was over. It was time to crash faster, or something.
So, the revamped Australian carbon tax called the Safeguard Mechanism does everything it isn’t supposed to. Gas and electricity prices will rise, climate targets will be harder to reach, the grid will get more unstable, and investors will run a mile now that new gas fields have to be “net zero” — meaning presumably they will have to buy carbon credits before they sell their first cubic meter of gas. The field of ineptitude even reaches overseas — with less gas for sale — our trading partners will just buy more coal.
Australia will spend even more billions to win a fashion contest at UN dinner parties and cool the world by 0.0 degrees C.
The Australian Electricity market melted down last winter, and stopped trading, because we didn’t have enough gas for the artificial “transition”. Even the hard-left AEMO — our climate activist electricity grid manager — says we need to unlock more gas fields. Instead, the government ignored the experts, and has just locked more gas fields away.
Australia was the world’s fifth largest gas producer and the world’s largest LNG exporter in 2021. All our competitors will be happy. Russia says “thank you” Anthony Albanese. (Australia’s PM)
Click to enlarge Source Statista
Caved to the Greens:
The Labor government boasted that they did not give in to the Greens’ demands to ban new gas and coal projects. But they effectively banned many of them anyway with the rule that all new gas entrants will be required to have net-zero carbon emissions from the first day of operation.
Without cheap gas to keep the lights on, grids will have to keep coal plants running longer and slow the “roll out” of unreliable generators. And the new rule applies to export gas fields too. Without export income and royalties from new gas fields, soon the government will run out of cash to buy batteries, build 10,000km transmission lines to solar white elephants, and dig out drill rigs stuck in Snowy Hydro tunnels to nowhere.
It’s like we just put a tariff on our own exports?
Other nations put tariffs on imports to help their own industry. Australia adds costs on our exporters…
By blocking gas exports we may speed up the brain drain
The free market, such as it exists, will find another way. Presumably Australian oil and gas experts will be more likely to explore overseas, register their companies in the Caribbean and sell direct to Tokyo, Seoul and Beijing without all the carbon frappery.
The greens are making Anthony Albanese look silly
Our PM is claiming he hasn’t banned old and gas, but the Greens are claiming they have. Who is running the country?
Our genius PM found a tricky word-salad so he could comply with the Greens while pretending not to:
Safeguard mechanism deal threatens power prices, says oil and gas industry
Jess Malcolm, and Geoff Chambers, The Australian
“You will note that the demands that were placed on us of ruling out future projects are ones that we said we wouldn’t agree with, and we haven’t.” — [The Prime Minister said].
“We have had discussions … not just with people in this building, but people outside this building, whether it be the manufacturing sector or whether it be the gas industry,” the Prime Minister said.
While the PM spoke to people “outside the building” it didn’t include most of the gas industry who are not happy:
The peak oil and gas lobby group attacked the Labor-Greens deal…
The gas industry on Monday warned that the Prime Minister’s signature climate policy, forcing 215 big-emitters to slash emissions by nearly 5 per cent each year out to 2030, could drive up costs for households and businesses if new gas supply is restricted.
What looks, smells, and acts like fascism…
The “Safeguard Mechanism” is not about reducing CO2, — if that was the point, Labor and the Greens would build nuclear power plants. Instead, apparently, it’s about targeting particular industries, giving them an impossible task, and then making them dependent on government handouts or “special treatment”.
See how this works:
Nuts and bolts of new safeguard mechanism
Jess Malcolm, The Australian
Labor struck a deal with the Greens to amend the safeguard mechanism and impose a “hard cap” in the scheme targeting coal and gas projects.
What happens if emissions rise?
In the event that real emissions do rise above the cap, the government will work with facilities to help them reduce emissions by either reducing their baseline rates or through more funding from Labor’s Powering the Regions fund, or amend the cap.
Amid concern that hard-to-abate industries will struggle under the scheme, Labor committed $1bn in funding for manufacturing and trade-exposed industries to decarbonise, which included an extra $400m for critical industries such as steel, cement and aluminium.
So the government will give a special loophole for friends and donors. Or taxpayers will pay for the gas industry to achieve the impossible, but the costs will be laundered through general government coffers — effectively making the gas industry partly “owned” by the government gatekeepers. What gas corporate will dare speak out against unfashionable policies lest the government take away their “support” to meet the impossible target.
And of course, consumers will pay through higher bills, and then the government will give them some of their own money back, or their childrens money and call it a rebate. Vote for us!
Now the gas industry says they want “science”?
To some extent the gas industry got what it deserved — for years they played along with the climate game, assuming the greens were after the coal and oil industries and the “cleaner” gas industry would benefit. It’s a bit late now to cry “science”: Woodside, after all, wouldn’t even let me speak at a Christmas event for geologists — presumably worried I might lead vulnerable 50 year old drilling experts astray with “misinformation”.
Australian Petroleum Production & Exploration Association chief executive Samantha McCulloch – representing gas giants including Santos, Shell and Woodside – said: “We can’t let politics and ideology get in the way of sensible, evidence-based climate and energy policy.”
Where’s she been for the last thirty years? The sensible policy in 1993 would have been to get the science right, not to throw half a billion years of geology on the rocks and let parasitic, unaudited foreign committees and 16 year old girls design your energy policy.
Increasing carbon emissions and actual pollution overseas
The Green-Labor plan will damage other nations carbon targets too as they will increasingly forced to buy coal and gas off nations with longer transport lines, and lower quality coal. Our PM might get some calls from the leaders of Japan, South Korea, China and India, the people who need our gas and coal. He should ask them if they would prefer to be a thousandth of a degree cooler sometime after they die, or would they rather get cheaper gas now?
I mean, should we export cheap gas to help fertilize the fields of Sri Lanka and Bangladesh, or take a punt on slowing their storms in 2100 instead?
Labor kept telling us we needed certainty, but as soon as we got it, energy shares fell:
Energy shares were the worst sector performer, falling 2.3 per cent.
The “Safeguard Mechanism” reform legislation, set to take effect on July 1, is key to the Labor government’s pledge to lower emissions 43 per cent by 2030. Under the revised legislation, projects such as the Browse field that Woodside Energy wants to develop would have to include carbon capture and storage to achieve net zero.
Woodside shares fell 3.4 per cent to $31.47, setting them on course for a slump of more than 12 per cent in March, the biggest monthly decline since 2020.
Tamboran Resources, which is looking to develop a project in the Beetaloo, plunged 6.7 per cent to 21¢. Beach Energy receded 3 per cent to $1.285 and Santos shed 1.6 per cent to $6.74.
It’s all about power and money…