May 21, 2020



FRAN KELLY, HOST: As I mentioned, we heard earlier from Angus Taylor. The Government has launched its discussion paper focusing on new and emerging technologies to cut carbon emissions. The Government says its priority is technology not taxes and the technology road map it says will include a range of energy sources.
ANGUS TAYLOR (recording):  We’ve made very clear that we want many horses in this race. Any horse that can win the race we want it in there. We will be putting out technology statements on particular technologies later in the year. We’ve already made very clear that hydrogen, for instance, is a priority technology. We set a target getting the hydrogen cost of production down to below $2kg, which makes it competitive with gas. We know that if we achieve those economic outcomes then businesses and households will choose these technologies because it reduces their cost of living and allows them to invest and employ and strengthens the economy.
KELLY: That is the Energy Minister Angus Taylor speaking to us earlier. Mark Butler is Labor’s Shadow Minister for Climate Change and Energy. Mark Butler welcome back to breakfast.    
KELLY: The Coalition has listed this draft program I suppose, on their technology roadmap. It’s a discussion paper it canvases 140 technologies. We will end up with a technology roadmap perhaps around September this year, well before the world’s next climate talks anyway. Have you had a look at this, does it look like a plan that will lead Australia to a net zero emissions economy?    
BUTLER: I haven’t had a look at it yet, I’m not sure it has been released. I’ve read some of the reports that have been dropped to the newspapers overnight. I’m losing count, but I’m pretty sure this will be about the Government’s 19th energy policy and not one yet has stuck the landing. But we will obviously look at this very closely once it is released sometime today.  
I certainly hope there is a fair bit in there that we can agree with, so that some confidence can return to the energy sector where investment has collapsed. It collapsed even before the COVID-19 pandemic by as much, in renewable energy the Reserve Bank says, as 50 per cent last year. There is no question we need a national energy policy to get the investment going to replace our ageing gas and coal-fired generators.
KELLY: The Government’s policy stress, as you head again in that grab from the Minister, is always about reducing emissions without harming the economy. Should that be the number one priority? Of course no one wants to harm the economy but it is misleading to talk about reducing emissions, especially if we are talking about zero emissions, without any cost to the economy? Can it be cost free?
BUTLER: We are going to have to replace our electricity infrastructure and that is going to be at a cost, it doesn’t come free, but it is also not a choice we have. Our existing electricity infrastructure - much of it is already operating beyond its design life and even without a climate change imperative we are at a point in our economic history where we have to invest in new electricity infrastructure. What is clear is the cheapest way, let alone the cleanest, the most effective way to renew our electricity infrastructure is with firmed up renewable energy. I hope that that is at the centre of this technology roadmap.
It is not for Government to pick winners in this, it is for the market to decide. But what I don’t understand about this Government is why it seems so determined to continue to pick losers.   
KELLY: What do you mean, how does it pick losers?
BUTLER: As I understand it the Minister is still focused on trying to build new coal-fired power stations. This is in spite of the fact investors and regulators have said that that is not a long-term investment.
KELLY: Well that’s not part of this plan, it is possible within the terms, page 32, apparently the Minister told me in this document allows for that but the Government is certainly not going to prioritise any kind of high-efficiency low-emissions coal plant?  
BUTLER: Well they are still intending to back the construction of a new coal-fired power plant in Queensland. If this road map closes the door on that investment that would expose taxpayers to an indemnity of as much as $17 billion according to the Australian Industry Group – well that is all well and good. But we just need to resolve the contradictions in this Government. At the end of the day they have a choice between pursuing a path that investors and regulators have said is the best economic path and the path consistent with dealing with climate change on the one hand -   
KELLY: What’s that path?
BUTLER: That’s very clearly a path that has clean energy, renewable energy, firmed up by batteries, pumped hydro, and for the time being at least some gas-fired generation as well. That is the path being pursued by countries all around the world and the path recommended by key regulators and bodies like the CSIRO and the Energy Industry itself. On the other hand they have the choice of continuing to pander to the extremists in their party room that insist on clinging to the past rather than looking to the future.

KELLY: Is there something in between that though? The Minister is not denying that renewables are the future but they are not there yet in terms of that firmed up technology that you are talking about, and we will get to gas in a moment. But the Minister says let’s have all horses run in this race and see where the race can be run and it might not just be solar, wind, with battery storage and pumped hydro, it might be hydrogen. The Government is investing heavily in hydrogen. It might be any number of technologies and we should let evidence based policy decide that not ideology or favourites. What do you think of that?   
BUTLER: First of all it is not a black and white choice in the sense that this will be a transition over time. But it is clear that the best new investment in electricity generation is renewable energy firmed up by those technologies we talked about. It is not in new coal-fired generation. It is certainly not in very expensive nuclear power generation that I understand is also in this paper.
KELLY: Yes it is.
BUTLER: We very much embrace the idea of hydrogen. We took a very ambitious hydrogen policy to the last election and the Government described it as “snake oil”. Of course that is a very important part of Australia’s energy future. It is not about electricity generation, but it is going to be very important for industry. It is going to be very important for transport and it is going to be a great export industry for Australia potentially. We very much support that and I hope it is at the centre of the technology roadmap.
KELLY: I mentioned gas, gas is also one of the leading energies proposed by this plan from the Minister and the Minister himself has said it will be a gas-led recovery. Does Labor support, you’ve talked there about we need firmed up capacity for renewables in the short-term and gas peaking plants can certainly provide that. But what level of investment should the nation be making at the moment? Gas prices have dropped and manufacturers will certainly appreciate that – that will help during a recession no doubt about it.
BUTLER: We’ve always said that gas is an important transition fuel as we move to a clean energy system. Quite how long gas plays an essential part in the system will depend on, for example, the cost of competing technologies like batteries and pumped hydro, and the cost of gas itself. What we have seen over the last several years is gas in the eastern states particularly skyrocket. They’ve tripled in price as we found ourselves exporting so much of our affordable, reliable gas supply overseas instead of keeping it here for Australian businesses and Australian households. While we think there is an important role for gas, both in electricity but also for industries that use it as a feed stock, there are a range of questions that I think the Government needs to answer about where they are going to get vast amounts of cheap gas in Australia. The gas industry tells us that a lot of the cheap gas that they relied upon over the past decades, for example in the Bass Strait, is largely depleted. The gas we have onshore now is relatively expensive, it is not $4 to get out of the ground - it is more like $6 or $7 or $8. There is strong community opposition in lots of areas of Australia to that. There are lots of questions for the Government to answer about this.             
KELLY: Should the Government be looking at getting investment in a pipeline, a gas pipeline from west coat to east coast? Is that the sort of infrastructure we should be looking at? Gas ultimately is not zero emissions is that an issue in the long-term?
BUTLER: Well of course it is and advice from all of the large investors here and around the world, advice from regulators, APRA, ASIC, the Reserve Bank and others is that investment needs to take account of future carbon risk. Particularly long-term investment - talking about multi-decades investments like gas pipelines - needs to take account of the fact that the economy here in Australia and globally will decarbonise over the coming decades and there is a very serious risk of stranded assets that will leave taxpayers footing the bill.  
In terms of that pipeline, it is really for the Government to answer some of these questions. It was only two years ago when Josh Frydenberg received a feasibility study which said that pipeline simply didn’t stack up and the WA Government doesn’t support it. What is the cost? What are the carbon risks that our independent regulators have warned about? These are questions that the Government is not answering here.  
KELLY: Before we run out of time, the King Review that is the review of the Government’s $2 billion Climate Solutions Fund. Grant King who is the Chair of that said on RN Drive last night that the fund is good value for money, it is achieving carbon abatement at around $12/tonne and it also recommended carbon capture and storage could be part of the remit of government policies. What is your view on carbon capture and storage? Is there room for more investment in it?
BUTLER: The Chief Scientist Alan Finkel, the International Energy Agency and others have said that carbon capture and storage should be one of the suite of options to deal with climate change. I don’t think it stacks up in electricity generation, but I accept the advice of experts and scientists more broadly. I have always taken that approach on climate change policy. So if the experts can show that this stacks up as a technology then let’s see how it goes. As I understand it, what the Government is proposing is for the panel of experts that we set up in Government to have a look at whether a methodology can be developed to allow carbon capture and storage to operate. We are very happy to see what the experts come up with on that.
But really when I hear Angus Taylor time and time again punch out these fatuous three-word slogans like “technology not taxes” frankly it is pretty rich coming from a Government whose only climate policy is to throw billions and billions of taxpayer dollars, not private dollars, taxpayer dollars at technologies like this. I think industry should be paying for this sort of thing, not taxpayers.
KELLY: The Minister also said this morning that the technology road map will ultimately not just be good for Australia but be good for the world because it will be testing technologies that will help deliver cleaner fuels for the world. Is that a change in priority and should that be a priority for Australia?
BUTLER: There are some areas where Australia should be leading the world. We have the best natural resources in the world, we certainly have some of the best scientists. There are very few solar panels in the world that don’t have intellectual property, intellectual grunt that comes from Australian universities, particularly the University of New South Wales and others. We can lead the world in these areas. In hydrogen we should be a world leader. There are other areas where we will probably be technology takers – for example electric vehicles. It is about recognising our comparative advantage and if this Government finally is willing to come to the table and work with us, work with industry on some of those things we will welcome that.       
KELLY: Just finally, this year marks one year since the last federal election. Labor has recommitted to net zero emissions by 2050, we still don’t know the plan to get there. When will we have a 2030 emissions reduction target from Labor?
BUTLER: We are working on this over the course of this term of Parliament so that voters have a very clear choice. I think your listeners will wonder quite frankly at the double standards of a Government that, on the one hand, accepts and follows the advice of our medical scientists around COVID-19, including very substantial economic lockdowns, as they should. But on the other hand repeatedly rejects the advice of Australia’s climate scientists like the CSIRO and the Australian Academy of Science that we must be a net zero emissions economy by the middle of the century - and, indeed, that that will lead to better wages and higher economic growth. I hope that the Government finally comes around to being consistent about the way in which it treats independent, expert, scientific advice.  
KELLY: Okay well that wasn’t exactly an answer to when we will get Labor’s target though?
BUTLER: I said over the course of this term of Parliament and well before voters go to the election they will have a clear, detailed climate change policy from the alternative government.   
KELLY: Mark Butler thank you very much for joining us.
BUTLER: Thanks Fran.