Archive for November, 2013

D-day for energy

Federal Industry Minister Ian Macfarlane is pulling together his State and Territory energy counterparts on 13 December for critical talks focussed on electricity and gas issues.

In a televised interview with the “KGB” of “Business Spectator” – Alan Kohler, Stephen Bartholomeusz and Bob Gottliesbsen – Macfarlane said that he is going to include industry representatives in the discussions as well.

“We need more reform,” he said in an interview where he was blunt about the future for domestic gas prices and the federal government’s continuing rejection of manufacturing calls for reservation of supplies.

Macfarlane’s view is that, for gas users, the east coast reality for the next decade is “prices north of $6 per gigajoule.”

In fact, he argued in the interview, reality is prices of $7 to $8, if not more.

(And this assumes that more coal seam gas is brought in to the market through developments in New South Wales as well as some expansion of conventional supplies, for example from Bass Strait.)

At $3.50 per gigajoule, the average domestic wholesale price in recent years, Macfarlane said, coal seam gas will “stay in the ground,” pointing out that the rules and regulations now imposed on the producers alone add $3/GJ to their costs “and the cost of getting it out of the ground is around $5.”

Manufacturing, he said, will “have to adjust to using gas a a higher price” while acknowledging that “obviously industries based around low-cost gas are going to find this very difficult.”

Macfarlane told the “KGB” that the biggest issue in the resources segment of his wide-ranging industry portfolio is securing gas supply for New South Wales.

“No-one,” he said, “ now argues (against) New South Wales facing a gas crisis in perhaps 18 months.”

The current challenge, he added, is to ensure that Santos and AGL Energy are able to bring on their CSG projects in the State, starting with the former’s Pillaga Forest project.

(“Pilliga is not exactly prime agricultural land,” Macfarlane said in an aside. “Even the goannas carry water bottles there.”)

He emphasized that the federal government is not trying to persuade Barry O’Farrell’s State government to relax the conditions it has imposed on the gas industry in terms of intruding on communities and farms. “Beyond (these areas), there is still ample opportunity to provide gas,” he said.

Macfarlane, a Queenslander who also farms, again urged New South Wales rural communities to consider the benefits accruing to their fellow farmers in his home State.

“I have not seen anything make such a positive contribution (to farmers) in regional Queensland as CSG,” he said. “We need to transpose the Queensland scenario to New South Wales.”

In passing, he also dismissed criticism that the east coast LNG developments are the cause of the region’s gas problems. “Without the LNG industry, coal seam gas would still be sitting in the ground,” he said.

However, he pointed out, CSG is “an extremely expensive way to access gas” compared with conventional natural gas operations.

On electricity, Macfarlane said the costs imposed by more than $40 billion worth of network development over the past five years cannot be unwound. “What we need to do is make the industry more competitive.”

Part of this process, he added, is to encourage further privatisation of the power sector (in New South Wales and Queensland), part is to make the Australian Energy Regulator more effective and part is to pursue technology developments to enable networks to avoid expensive further outlays in dealing with peak power demands.

His comments contained a strong hint that the federal government is leaning towards separating the AER from the Australian Competition & Consumer Commission (a move both the regulator and the ACCC oppose but Coalition State governments support.)

Most of the media coverage of Macfarlane’s portfolio activity since the Coalition returned to government has been focussed on manufacturing issues and, in particular, the future of the automotive industry.

The “KGB” interview is only the second occasion he has spoken out on energy supply issues since then; the first was when he talked to media at the New South Wales government “energy summit” in late September.

In an important respect, what he had to say to the “KGB” jibes with a Mining Day speech he made on 22 November.

Dealing with the carbon tax repeal issue, he said then: “We want to see power bills, gas bills and other bills go down to relieve households and businesses of cost pressures.”

Domestic gas prices at the levels he discussed with the “KGB” will add more to household bills than abolition of the carbon tax will take away – and will place more than a few manufacturers further on the input cost knife edge.

Which is not to say that his “KGB” comments are wrong – just that, like others in the new government, he needs to pay careful attention to the rhetoric.

The early lesson to be drawn from the performance of the Abbott government is that it at best is getting a “C” for communications and that is dangerous for it in a media environment where the ABC and the Fairfax media in particular have been out to paint it in a bad light from the get-go.

Macfarlane’s comments about the timing of a New South Wales gas crisis – “in perhaps 18 months” – serve to further underline a point I keep making: 2015 is a politically dangerous year for the O’Farrell and Newman governments as well as the Coalition in Canberra.

Perhaps the analogy that should be drawn is the 1998 federal election, where John Howard’s massive 1996 majority, was cut down to a dozen seats and the political outfall colored his activities over the following years.

If the network privatisation process that Macfarlane and others are promoting is to come to fruition, O’Farrell and Newman have to take it to the polls in March 2014 (NSW) and not long thereafter (Queensland) – they are pledged to do so – and by then we will know the electricity network charges outlook for 2015-19 and be living in the new gas price paradigm. We should also be dealing with the smart metering and time-of-use tariff implementation issues, both also politically sensitive.

Along with others, I go on a lot about trust between the community and politicians and energy suppliers.

The bedrock of trust is understanding and it’s the Harbor Bridge to a brick that the politicians and the providers have yet to do a good enough job of engendering understanding about the energy future fast approaching.

Perhaps Macfarlane and the other ministers could make a little time to discuss this point on 13 December.

Seeking public trust

If you read to page 18 of AGL Energy’s new annual sustainability report you will find a somewhat eye-opening statistic and a highly germane observation on the current state of play in electricity supply.

First to the stat: Over the next 10 years, the company says, the Australian power sector will need to spend $30 billion on new renewable generation assets in order to meet the target of existing RET and, on current customer numbers, AGL will need to shell out $5.1 billion to meet its share of the mandated scheme.

For me, this raises the question of what exactly in terms of carbon emissions abatement will be achieved over these 10 years by this level of expenditure and what, taking every factor in to account, will be the cumulative cost to customers, business as well as householders?

None of the work undertaken by the Rudd/Gillard government during its term in office genuinely addressed this.

None of the current to-ing and fro-ing in the media about the cost of the RET is genuinely informative either.

The very least the review the Abbott government is proposing should deliver is a fully-fledged exposition of the costs, not only in terms of capital outlays and costs per megawatt hour for consumers but also in terms of the cost per tonne of emissions abatement – and, I would hope, some comparison with the abatement costs for other technologies.

As to the second point of note (for me) in the AGL Report sums up the investment situation like this:

“For all renewable assets, revenue is partly dependent on the value of large-scale generation certificates and partly on the wholesale ‘NEM’ price. Higher returns are possible where investor costs are lower than (those) associated with the marginal project required to meet the target.

“Through early site selection, AGL has sourced some of the best sites for wind development in the country, allowing for potentially greater returns over the long term.

“ (However), policy uncertainty regarding the RET scheme has meant it is unclear what return would be achievable on future renewable projects. For this reason AGL has deferred future wind farm developments until there is greater certainty.”

This comment can be read in the context of the latest RepuTex remark that at least 800 megawatts of new large-scale renewable capacity needs to be built each year from 2014-15 to 2019-20 to meet the current RET requirement – but the consultants think this is a “tall order” and they expect the rate of building to actually slow in mid-decade, “potentially leading to a sizable shortfall” against the target.

Factors in Reputex’s thinking are the proposed abolition of the carbon price and the widespread expectation that east coast gas prices will rise substantially.

The outcome, according to the consultants, is likely to be an increase in coal generators’ share of the “NEM” consumption from 76 per cent now to 81 per cent at the decade’s’end, with gas plant output halving from its present level – and wind power’s share of the market, now five per cent, not hitting 12 per cent as had been forecast, but around 7.5 per cent.

In its sustainability report, AGL sums up the overall situation quite well, I think: “The challenge is to ensure the orderly entry of new clean and lower-emission generation and the orderly exit of older, inefficient and high-emitting power stations to enable a smooth transition to a low-emission future.”

To which it is also necessary to factor in, as the company says elsewhere, that “peak demand is likely to grow in excess of underlying energy demand” and, if you buy the mainstream modelling claims of the science community (where there is a strong bias to the green side), we could be looking at average temperatures rising by 0.6 to 1.5 degrees Celsius by 2030 (a trend on which AGL says it is basing its strategy scenarios), increasing the need for back-up generation when wind and solar can’t cope.

The point at issue here is that companies like AGL are engaged in business, not a social welfare program nor a campaign to “save the planet.”

AGL says its goal is to enhance its quality of earnings and to “deliver a satisfactory return to shareholders” while, of course, meeting the needs of 3.5 million eastern seaboard customers.

The same can be said of EnergyAustralia, Origin Energy, ERM Power and other firms of this ilk.

How they achieve this goal is influenced by carbon policies, the RET, commercialisation of technologies and the supply/demand dynamics of the “NEM,” in turn affected by consumer reactions to prices and subsidies (eg the solar feed-in tariffs), local community attitudes with respect to both new build projects and the operations of existing plants and, by no means least, the vagaries of regulation and the kneejerking of political leaders.

The caricatures of these issues and developments so frequently presented in the media are just that.

The media habit of personalising so much of what it covers is info-tainment, but that, too, creates its own environment.

This stuff is far from irrelevant because of the impact it can have on the supply industry and individual firms, but its strongly distracts from a real appreciation of the business environment.

The fact that it takes a company like AGL 109 pages to canvass all the aspects of its “sustainability” speaks volumes for the complexity of this environment and makes at least some of us ever more conscious of the uncertainty factors at play and their inter-action with the trust challenges now bearing more strongly than ever before on the business community and the mainstream body politic.

By the way, on the subject of trust, what should one think about today’s flurry of coverage by the Fairfax Media of their Nielsen Poll that claims Labor under Bill Shorten has “stormed ahead” without the papers also acknowledging that the Essential Report poll for 19 November shows the Coalition with 44 per cent of the primary vote versus Labor with 35 per cent and the Greens with nine per cent, the latter running behind the independents with 11 per cent?

The 2-party preferred estimates offered by these polls are a nonsense because they are using 2010 federal election outcomes.

Given all the noise about the Warsaw climate change conference, this is also notable: Essential Media found, in asking who respondents trusted to manage the issue, that Labor got 19 per cent versus 23 per cent for the Liberals, 31 per cent for the Greens and a rather large 31 per cent saying “don’t know.”

Perhaps rather more germane to the top line outcome, Essential Report found that 47 per cent trusted the Coalition on management of the economy versus 21 per cent for Labor.

Companies like AGL produce sustainability reports to support their efforts to be trusted; we have to rely on elections to establish who the community trusts in government but there’s ample evidence that a majority don’t trust the media – and the “storming ahead” stuff without context is yet another reason why.

Wobbling away from Warsaw

You could read more than 1,850 media stories on Google News right now about the 19th version of the UN negotiations on climate change policy – or you could save yourselves the effort by reading just one in the “New York Times” from reporter David Jolly (headlined “Deals at climate meeting advance global effort.”)

In less than 1,000 words Jolly (a) tells us all we need to know about the actual outcome and (b) gives the lie to the concerted effort on the ABC here, in the Fairfax media and via various greenwashing electronic websites to portray Australia as a prominent villain of the piece.

There is not a syllable in Jolly’s copy about Australia, although he points to the “thorny dispute” at the forum over a key proposal by developing nations to create a “loss and damage mechanism,” a trillion dollar a decade slush fund to be financed by developed nations for the benefit of developing countries – which he points out was opposed by the United States, the European Union and other developed nations.

Follow the ABC, Fairfax and the greenwash media here and you could only form the view that the Australia was a major “dinosaur” at the conference, a “land of coal blocking climate action.“

Something of a give-away on this greenie game can be found by going to coverage of the Canadian role in their media sympathetic to the environmentalist cause – where the same language is used to paint Canada as a villain of the piece, “blocking an international framework in the face of increasing climate-charged extreme weather events like Super-Typhoon Haiyan.”

Shameless does not begin to describe this stuff.

(In passing, looking at the global coverage, I also note that the hullabaloo here in some quarters because two of our negotiating team dared to wear T-shirts to a session sits rather oddly with a photograph published around the world of a Middle European representative swathed in a balaclava, a sloppy joe and a kapok jacket – which makes one wonder how our pair got by in thin tops?

(And also in passing, you must forgive an old newshound if he turns up his nose at Reuters no less using the term “around 200 countries” in describing an event attended by 194 – a nitpick, yes, but a testimony to the sloppiness that is evident almost everywhere in today’s 24/7 media.)

The leading Indian newspaper, “The Hindu,” is covering the outcome of the negotiations by noting that the participating countries are “locking themselves in to a compromised agreement with a low level of ambition to fight climate change.”

It adds: “A rather loose road-map was drawn up for mobilising monies towards the $100 billion annually (for the compensation fund) by 2020.”

While it suits the greens movement and its fellow travellers to assert that the “coal industry cast a shadow over the event,” the real shadow remains the unwillingness of major, growing emitters like China and India to commit to abatement targets and the ongoing US inability (because the Congress will never support the move) to make a commitment while they don’t.

Not so much an elephant in the room but a very large mammoth, which will turn up again next December and beyond as the talks wobble past their 20th anniversary.

Meanwhile, in scanning all this stuff, I spotted a lovely piece from Toronto where the “Financial Post” newspaper really got stuck in to Ontario Premier Kathleen Wynne (think Kristina Keneally as the Liberals, their Labor Party, stagger towards the next provincial poll) for a confected meeting with Al Gore to celebrate success in using wind and solar power to achieve a major cut in emissions.

The only problem, said the “Post,” is that the reduction is to do with bringing nuclear energy back in to the Ontario mix, not building renewable generation.

Back in the 1990s, when my ESAA duties took me to Toronto a number of times, the province had annual electricity-related emissions of about 16 million tonnes thanks to dominant use of nuclear and hydro power.

Then, for a range of operational, financial and political reasons, the nuclear reactors were shuttered, coal generation took over the heavy lifting and the province’s emissions peaked at 42 Mt in 2001.

Now, thanks to the return of 4,250 megawatts of reactors to the mix and a political decision to close down the coal plants, Ontario emissions are down again to just 13 Mt per year.

However, the rush to subsidised renewable energy (which has pushed hydro power aside, not coal) and higher network costs have seen Ontarian household electricity tariffs double.

Premier Wynne and Gore wanted to celebrate “a precedent-setting climate achievement,” using the Warsaw conference as a convenient peg, but the claims are a sham and the posturing essentially a lie, as the “Post” called it.

A metaphor for our times, some may think.

As for Warsaw, the Australian environmental movement is coming back  to tell us that “there is no way Australia can quietly or secretly backslide” on abatement targets and to argue they should rise to 20 per cent, not the present five per cent, by 2020.

You can expect to hear much more of this on a rising key through the first eight months of 2014 because the real news story (from our perspective) is that Tony Abbott will need to front the global government leaders’ conference being called in New York next September by UN Secretary-General Ban Ki-Moon in an effort to prepare the ground for the end-2015 climate change negotiations in Paris where a daughter-of-Kyoto treaty is supposedly to be agreed.

This 2014 event is going to more-or-less coincide with the production of a new energy white paper in Australia and to follow whatever decision is made to amend our RET and whatever is the outcome of the carbon price abolition moves in federal parliament once the new Senate is in place on 1 July.

Punctuating this run-up period is the near certainty of a fresh Senate election in Western Australia and the by-election in Brisbane to replace Kevin Rudd.

Spinning in the wake of the wobbly Warsaw talkfest is going to reach a new pitch here in the next 6-8 months and its focus will be on the Prime Minister ahead of the Paris meeting.

Which is why every fib and fabulation of the local green brigade needs to be held up for scrutiny – and why the Coalition really needs to get its energy and environment act together.

Reith Report reaction

The Napthine government’s decision not to make a decision about the recommendations of Peter Reith’s task force on Victoria’s gas outlook is entirely predictable.

Stuck on a knife edge in State parliament and facing an election in November 2014 – if not earlier should the wheels fall off the present parliamentary cart – Denis Napthine was always going to do what most political “leaders” habitually do these days: duck and weave and delay.

His first move is to set up an 18-month consultation process with farmers, environment groups and community bodies while maintaining a moratorium on coal seam gas activity in the State.

The Australian Petroleum Production & Exploration Association is right to describe this approach as “fuelled by political imperatives rather than policy outcomes.”

“The message is crystal clear,” APPEA adds. “The Victorian government is paying more attention to short-term politics than science-based evidence and is not focussing on attracting investment and building the economy nor on the consequences of failing to do so.”

Just like Napthine’s neighbour, Barry O’Farrell, in New South Wales in fact.

Just two more examples of why trust in political leadership in this country is at a low ebb.

True to form, the Greens have labeled the Reith Report “a sham” while no doubt secretly welcoming it because it will provide a platform for their campaigning in the next election – where they could hope to replicate the Gillard years by holding the balance of power in the next Victorian Legislative Assembly.

Now that the Victorian Premier’s political knee has jerked, the real interest lies in reading the Reith Report details – an interesting document put together by a task force also involving Craig Arnold of Dow Chemicals, David Byers of the APPEA, Frank Calabria of Origin Energy, Cheryl Cartwright of the Australian Pipeline Industry Association, Mark Collette of Energy Australia, Angus Taylor of Port Jackson Partners (now a federal Liberal MP) and Innes Willox of the Australian Industry Group.

(That’s a make-up that has the Greens howling with indignation, too.)

The task force product is not one but two reports – one giving advice to the State government and another providing a wide-ranging background commentary.

(Both are to be found on the Victorian government website.)

A starting point is that Victoria has a lot of skin in the gas game: it is the largest consumer in the east coast domestic market, using 270 petajoules a year, close to double the demand of NSW.

Of this, 100 PJ a year is used by 1.8 million Victorian householders, the largest residential demand in the country.

The rest goes to the manufacturing sector, power generators and the myriad of small businesses (like restaurants) for whom the fuel is an essential resource.

Reith is blunt in his foreword to the report: “Victorians should be under no illusions. Rising gas prices will have a negative impact on the State’s manufacturing base. Jobs and investment are at risk. Costs of living will rise and could rise for longer if (the gas supply issue) is not addressed.”

The task force finds that residential prices in Victoria are likely to be 30 per cent higher in 2015, about 20 per cent higher than today. The annual average bill for householders this year is $1,200.

In the medium to long term, the report asserts, supply and demand on the east coast can “regain equilibrium” and lead to a stabilisation of gas prices, so long as we all understand that these costs are “likely to reflect international, in particular Asian, prices that are higher than the historical eastern Australian (levels).”

The “only sensible course of action,” Reith argues, is for the State government and other regimes on the east coast to promote the production of additional supplies.

Victoria, he says, can choose to benefit from its own resources “or it can follow NSW, where gas prices will most likely be the highest in Australia.”

It seems to me that the only possible construction one can place on Premier Napthine’s response is that pursuit of political salvation by masterly inactivity is a risk he is willing to take with the consumers’ welfare.

Thousands of words are devoted in the report to the community and environmental issues in Victoria that a development path requires to be addressed.

A very shorthand version of the Reith Report is “It can be done.”

Reith says: “the task force has made recommendations for rigorous environmental processes, to engage independent advice on key issues like water (effects) and to ensure a fair go for farmers and regional communities.”

The report also proposes appointment of an independent gas commissioner.

Another key recommendation is that the State sorts out its legislative and regulatory mess affecting resource development.

The task force points out that there are more than 50 Victorian bills, regulations, policies and administrative arrangements impacting on potential coal seam gas operations.

This, it adds somewhat drily, “creates uncertainty, delays and confusion.”

And this, I would add, comes after Ted Baillieu and Napthine have had more than adequate time to sort things out in terms of slashing red and green tape.

Clearly, they are adherents to my high school motto “Festina lente” – “make haste slowly,” the guiding light for Sir Humphreys everywhere.

The Reith task force suggests, instead, that there needs to be a greater sense of urgency to sort out the eastern gas market, a statement of the blindingly obvious really, but one that clearly is politically too hard to swallow.

The context here is another statement buried deep in the supplementary report: “There is a long lead time from discovery to production. Any onshore gas resources discovered today are not likely to be available by 2017, the time the predicted supply shortfall in the eastern market peaks.”

And 11 pages on, the task force adds this: “If the price were to rise significantly, it is possible some large industrial users may become unviable, resulting in closures. If prices rise to a short-term peak, this may have the effect of closing some industries which could otherwise be viable in the long term but are unable to remain (so) during the transition.”

And “it is clear that the manufactoring sector considers rising gas prices constitute a significant risk.”

There’s a thought for mainstream party political leaders to ponder as they go to the Christmas break.

Remember, we are looking at a Victorian election next year, a NSW poll in March 2015, a Queensland one no later than June 2015 and the next federal election in 2016 (sans the much-discussed double dissolution).

A matter of context

If you are Joe (or Jo) Citizen, one of the problems of the public electricity debate is that all the vested interests have factoids they want to throw at you and, not surprisingly, many consumers just tune out.

I saw a fine example of the genre in a newspaper report from Melbourne that “one in five households have given their electricity retailer a blast,” using a poll of 600 consumers undertaken by Newspoll.

This came with a headline “Fed-up consumers switch off electricity companies,” a pretty piece of PR for retailer Powershop, which kicked off its entry recently in to Victoria by firing a blast at “crusty utilities operating at a glacial pace and with a fetish for complexity and technical jargon.”

I grinned when I read this because Powershop is an offspring of one of New Zealand’s largest and oldest utilities, Meridian Energy, which has maintained a presence in Australia for years, being most recently in the news here when it sold its share of the billion dollar Macarthur wind farm (built in partnership with AGL Energy) to Malaysian interests.

Right at the moment Meridian is starting to produce energy at its Mt Mercer wind farm in Victoria – which, when fully commissioned, will bring the company’s wind developments here to 201 MW – and is using the development to promote Powershop’s entry in to the crowded State retail market.

Meridian’s origins go back to a real “crusty,” the Electricity Commission of New Zealand, broken up in 1999 as the Kiwis followed the example of the Victorians in disaggregating their power system.

Now, don’t get me wrong. I am all in favour of the animal spirits of the energy world competing vigorously with each other: businesses like Powershop are helping to encourage householders and small firms to tackle their electricity supply issues and that’s a Good Thing – it’s just that I struggle a bit with the hyperbole and the factoids.

That Newspoll survey, commissioned by Powershop, you see, can be contrasted with one undertaken independently in New South Wales by the Australian Energy Market Commission as part of the push towards deregulation of retail pricing in that state.

The AEMC survey, conducted by Newgate Research, found that “most respondents are satisfied with the quality of service provided by their retailers” in New South Wales.

Seventy-one per cent of those polled rated their power company “good” or “excellent.”

The catch in this case is that a large number of households, as every politician knows, are less than amused by the years of power price rises – in the case of New South Wales, these spikes have sent average bills up from $1,100 when Kevin Rudd was assuming running of the nation in 2007 to $2,300 now as he departs centre stage.

Not surprisingly, the AEMC survey found that only 48 per cent of those polled thought the service was value for money while 37 per cent thought it was “fair” and 13 per cent said “poor.”

Nine out of 10 electricity consumers in New South Wales know that they can shop around for a better offer and six out of 10 of them have done so, the carrot, as the AEMC notes, being that,if you pay the bill on time, retailers are now offering savings of $300 to $400 a year.

The point, of course, is that “three-quarters of power users quite happy (or not unhappy) with supplier” makes a lousy headline if you are in the tabloid media business.

In the same way, it is now a media ritual to make much of the annual ombudsman reports that show 20,000 to 30,000 consumers in large load centres like urban New South Wales or Victoria have been sufficiently hassled by problems to seek help.

This is always good for a loud headline, but never with the context that it is 30,000 out of two million households (Victoria) and three million homes in New South Wales.

The AEMC report throws up that complaints to ombudsmen about electricity supply are 5.5 per 1,000 customers in New South Wales, 18.7 in Victoria and 9.5 in South Australia. That 1.87 per cent of customers in Victoria, by the way.

The Victorian numbers are probably inflated by the hassles EnergyAustralia has been having with its billing IT system.

Perfect this situation ain’t but a genuine source for national anguish and hand-wringing it ain’t either.

The ombudsman service is an excellent one for those in the community who are over-hassled by their power supply issues but using their numbers, as the media habitually do, to convey an impression that there is turmoil in power supply is, to resort to an old-fashioned word, tripe.

The upside of the past few years’ much greater public focus on power supply, in fact, is that customers are more energised to seek better deals in this service sector than others: about half the people the commission surveyed report switching supplier in the past two years versus just seven per cent for health insurance, eight per cent for banks, 12 per cent for home insurance, 13 per cent for home phones, 21 per cent for mobile phones and 21 per cent for car insurance.

The upside also for the likes of Powershop and others in the energy sales business is that there is a market worth chasing – because there’s a buck to be made.

Part of the game is to goad the 30 to 40 per cent of customers who don’t “churn” to do so and this is where the hyperbole comes in.

“Electricity was always pretty boring but now it has become scary because power bills now occupy a significant proportion of the typical household budget,” says the Powershop propaganda.

Well, actually, power bills as a proportion of average household disposable income have been stuck around the 2.5 per cent mark, for an typical residential customer, for years and years.

Lines like “electricity price increases are pushing many households below the poverty line” are hype, although not remotely funny for the relatively few thousands who experience this plight and not fun either for perhaps several hundred thousand who struggle to balance their budgets, especially those on fixed incomes.

The real target for the sellers of cost-cutting services are not the poor, but the relatively affluent Australian middle class – that’s why large sums are being outlayed on TV adverts for cheaper insurance and the like.

Which is all fair enough, but the media, I reckon, have an obligation to provide context, not least because things like annoyance about power bills feed in to the political arena and help to decide who governs us.

Walking between extremes

This morning more than 200 people listened intently at a breakfast forum in Brisbane while the electricity hassles of a far-off land were explained to them.

The venue was the final Energy Exchange meeting for 2013 presented by the University of Queensland, Rio Tinto and the Energy Policy Institute of Australia.

The speaker was Markus Kerber, chief executive of the Federation of German Industries (BDI), which represents 38 industry sectors and more than 100,000 large, medium and small companies employing about eight million people.

Kerber’s focus was Germany’s much-discussed “energiewende” – which is frequently touted in Australia as a big example of the boldness with which our political leaders should set out to transform local power supply.

This was a view from someone who represents an increasingly beleagured manufacturing sector as well as energy technology companies (like Siemens) that stand to benefit big-time from Angela Merkel’s power revolution.

The size of this potential prize, as Kerber pointed out, is that these latter firms could double their annual revenue to 70 billion euros annually in global markets by 2030.

This upside is not surprisingly promoted vigorously by those who stand to gain and their PR efforts are represented regularly here in media coverage of the German program, especially in those outlets strongly in favor of a radical green agenda.

As an example, last June 19 more than 60 per cent of German power demand was met by solar and wind generation – an event played up in some quarters here for all it was worth – but we have heard virtually nothing about March 25 when, Kerber pointed out, the lack of sun and adequate wind put not just Germany but a slew of neighbouring countries on the brink of a full-scale blackout that would have cost the European economy 600 million euros an hour.

(Some fast generation footwork by power suppliers in Austria came to the rescue.)

Kerber’s core point in Brisbane was that Germany is “walking between extremes” with “energiewende.”

Today the country is meeting 25 per cent of its annual power consumption via renewable energy while it works to close down its zero-emissions nuclear industry and dreams of achieving 60 per cent renewables supply by mid-century.

The price tag is huge.

Kerber’s BDI estimates that 200 billion euros will need to be spent on “energiewende” technologies by 2030 and 370 billion euros in total in transforming the German power sector, about a sixth of this on transmission systems needed to transport green supplies from where they are generated to the country’s south, home to most of its industry and much of its electricity load.

The German export business, which is the lifeblood of the country’s economy, is both high quality products from the transportation sector, machinery and equipment and the electronics sector and also the output of metal products and chemicals, roughly half and half.

The latter are less labor intensive but very energy intensive – and increasingly worried about both security of power supply and its cost.

“Rising energy costs and possibly less reliable infrastructure pose a potential threat to industrial competitiveness as our power prices are already among the highest in Europe,” Kerber told the Brisbane forum.

And he added, and could have been speaking about Australia too: “The tricky thing now is to get the correct level of government interference.”

Currently, he said, “it is like witnessing an academic case study of economics,” citing Goethe’s famous tale of the sorcerer’s apprentice: “Spirits that I’ve cited, my commands ignore!”

Germane to our own debate, he pointed to the “much too quick” investment in solar capacity, with German farmers in the vanguard, cashing in on a new “crop.”

The feed-in tariff program there has seen more than 20 billion euros annually being paid by consumers to renewable energy producers – “a massive rent-seeking system.”

A key problem, Kerber said, is that government can’t move fast be enough to clean up what it has allowed to get out of control. (Ditto here.)

Politics, he added, have created vested interests who now resist being cut back – something with which we are only too familiar here.

“Too many people have got used to state-guaranteed transfers across the whole political spectrum,” again something also haunting our own economy.

Americans, Kerber observed, tend to believe people should look out for themselves while Australians believe you should look after your mates and the Brits that you should look after those in your club – while Germans in the renewables business believe that it is the government’s job to look after them.

The result today, he said, is that there is increasing concern in Germany about the future for gas-powered plants, a growing number of which now get to run on average eight hours a year.

“More and more power plants are not even earning their marginal costs any more,” he said. “We are running the risk of ending up with two power systems of the same size – one a nice and renewable system we use during the day and the other an ugly, conventional one that is run at night and in emergencies.”

The BDI view is that a solution can be found in a more market-based system where mature green generation needs to find buyers for itself and only gets a premium for its product not guaranteed returns.

The organisation wants a “giant overhaul” of the present power policy and Kerber is hopeful that the post-election negotiations Angela Merkel has had to pursue to form a new government (now in their fourth week) will result in a change of tack.

Beyond this, BDI wants to see an integrated energy market in western Europe where, for example, power can be shifted between Bavaria, a major load centre, and northern Italy, home to that country’s manufacturing,” obviating the need to over-spend substantially on capacity over the next two decades.

(We, of course, lack all those useful neighbours.)

Kerber was careful today to point out that BDI is not arguing for the abandonment of “energiewende” but for a major effort to get the policy fit for the real purpose of power supply.

In another echo of the hassles we have here, he noted that there are 17 governments in Germany (one federal and 16 “lander” or states) and the EU system has to be taken in to account as well.

Sitting on the forum panel after he spoke, my contribution was to observe that the central theme from Kerber’s presentation and our own current experience is that it is dangerous to meld energy and carbon policies without a cohesive design and, most importantly, a comprehensive assessment of the real costs involved in pursuing renewables programs.

In a phrase Kerber used the other day in an interview back home, the government approach there and here over the past five years has not been joined up.

Given how hard it is to get this message across at a local level, it is more than useful to have someone with Kerber’s experience of an even bigger green experiment to reinforce it.

With the Abbott government on the verge of launching its version of an energy white paper inquiry – it is said that the issues paper for the exercise is complete – we need such reinforcement.

A very big challenge

I recommend reading Tony Wood’s presentation to a Deakin University forum in the middle of last week.

Wood, who runs the energy activities of the Grattan Institute, took a tour of the Australian gas horizon that had four key themes:

First, by 2017-18 this country could be the world’s biggest gas exporter, obtaining more than $53 billion a year in LNG export earnings.

(This is not a small thing, but there is no national sense of its value, not least because most of the media are committed to highlighting the negatives about the “mining boom.”)

Second, this is occuring in an environment where unconventional gas (coal seam methane here and shale gas in America) is “creating a global energy revolution.”

(The media coverage of energy is dominated by worshipping renewables and demonising coal in environment where the real geo-political game-changer is gas.)

Third, strong Asian demand and high prices internationally mean local homes and business will be confronted by export parity prices and there is a “serious risk” of a shortage of supply on the east coast, especially in New South Wales.

(This price perspective is treated almost universally as a bad thing to be avoided rather than a new fact of life to be managed.)

Fourth, the long-awaited local dash for gas by power generators isn’t happening – falling electricity demand, rising gas price prices and the pressure on the market created by the renewable energy target means “no new gas-fired electricity is required for at least the next decade.”

(The implications of this for electricity supply in the ‘Twenties remain one of the least-discussed issues in the energy debate, even in the supply sector, but reliance on aging coal-burners and intermittent wind farms is, as the economists say, a non-trivial issue in the longer term.)

In this last respect, Wood points to gas demand by generators nationally having peaked at just over 200 petajoules a year in 2009 and predicted today to slump to around 70 PJ annually by 2016 before halving again by the middle of the ‘Twenties.

(In terms of a reversal of expectations, this is in a class of its own in the local energy space in recent memory. I can only think of the extra-ordinary slump in the international price of oil in the ‘Eighties — it fell to $8 a barrel and took the upstream petroleum industry totally by surprise.)

I’ll be rather surprised if the federal government’s east coast review, commissioned by Gary Gray last May and ordered for delivery next month, differs in any marked respect from this synopsis by Wood, however it is dressed up for public consumption.

As Wood said at Deakin University, the fall-out from this situation is that households will see gas price increases and, for some businesses, the spikes will be “a very big deal.”

This involves millions of customers and is as unlikely to be brushed aside in the media and political arenas as the impacts of network charges and green schemes on electricity price have been during the past 2-3 years.

Wood’s views and the impending federal report will provide an excellent prelude for the second Australian Domestic Gas Outlook conference that Quest Events and I are presenting in Sydney on 26 and 27 February.

Wood has been a member of the conference panel I have chaired.

Our fellow panellists have been Paul Balfe, ACIL Allen Consulting executive director, Ralph Craven, a director of Senex Energy, Sarak Kok, commercial manager (gas) of ERM Power, Cameron O’Reilly, CEO of the Energy Retailers Association and Hugh Outhred, a senior visiting fellow at the University of New South Wales.

Germane to the agenda devised by Quest and this panel are the summary points Wood presented to the Deakin University forum:

Top of mind, an investment of more than $160 billion in the gas business is good for the economy.

“Governments,” he argued. “should resist self-interested calls to cap prices or reserve gas for the domestic market.”

However, he pointed out, “unconventional gas brings conventional problems and an unusual alliance.”

Governments, he urged, must end the CSG impasse in New South Wales and, more broadly, they must create a more transparent and efficient gas market.

The latter task, Wood said, must include establishing new trading hubs and see the establishment of a gas price index, pipeline capacity trading and elimination of joint gas marketing.

“Industry,” he said, “must get the gas to market and commercial deals should get done.”

The fundamental point, he summed up, is that there is no shortage of gas here or overseas.

Globally, there is more than 200 years of supply, Wood said. “This is great news for energy users, but possibly very bad long-term news for climate change.”

Australia’s proven and probably reserves – the much-touted “2P” resources being quite different from inferred reserves so frequently quoted in the media – are enough for 70 years of current production, Wood added, pointing out that the anticipated CSG and shale gas resources could quadruple this coverage.

This talk is another useful contribution to the efforts to get the community at large, and the body politic in particular, to understand that, while gas represents one of the biggest economic opportunities in our history, getting the environment right, to quote Wood, is “a very big challenge.”

Just how much of a challenge was being yet again underlined in Sydney on the same day Wood was speaking at Deakin University.

Even as the upstream petroleum industry was welcoming the day’s news that the federal and NSW environment ministers will negotiate a single process for CSG project approvals, the State government was making it known that there is no prospect for watering down its regulations and the Greens were out and about asserting that any such deal will “gut national environmental protection for NSW.”

Greens senator Larissa Waters couldn’t resist adding “if the States had such powers in the past, the Great Barrier Reef would be littered with oil rigs.”

Finally, you find Wood’s powerpoint presentation on the Grattan Institute website.

Telling it as it is

Sensibly, five energy industry associations have banded together to give the Abbott government a plain Jane submission on repeal of the Gillard carbon price agenda.

They are the Energy Supply Association, the National Generators Forum, the Energy Retailers Association, the Energy Networks Association and the Pipeline Industry Association.

In a joint letter this week to Greg Hunt’s task force taking views on the abolition process, the quintet makes the sensible point that successful delivery of the Coalition policy should be pursued focussing on how carbon costs are passed through the energy supply chain.

There is no quick fix here – any more than there was in implementing the Gillard policy.

“The time taken to implement the carbon price,” the associations note, “provides some indication as to the time required to fully unwind it.”

I have lost track of how many times over the past 20 years or so I have made the point to politicians and their advisors that electricity and gas reach consumers along a supply chain – if you mess with one part without due attention to the ripple effect, you are looking for trouble.

The associations point out that the Gillard carbon tax has varying impacts, depending on region, supplier, retailer and, in many cases, individual contracts.

For electricity, the key point of impact of the policy is when it is generated. For gas, it is when consumers burn it.

And they warn that it is impossible to quantify precisely the extent to which the Gillard tax has increased wholesale power prices as this will vary according to the changing mix of generation output.

“In a competitive market,” they point out, “price discovery is dynamic and participants’ ability to recover carbon costs will vary.”

What’s more wind farmers and hydro-power generators benefit from carbon-influenced higher market prices even though their own output doesn’t attract the tax.

And it’s hard to attribute a carbon cost at the point of power trading because of the complexities of forward contract arrangements.

All that said, as the quintet assert, the Gillard regime has had a significant impact on the cost of generating electricity – bearing in mind that wholesale costs forming about 30 per cent of the bill the consumers see.

I recall a minister asking me grumpily during my 12-year stint running ESAA whether there was anything about my damned industry that was simple and being unamused to be told “No.”

This point is neatly made again by the associations when they note that, as the price for renewable energy certificates is influenced by wholesale energy prices, when the carbon cost is removed and wholesale prices fall, the price of the RECs may well rise, impacting in turn on retail bills………….

What’s more, the solar feed-in tariffs in most States are benchmarked against wholesale energy prices and, as a result, payments can be expected to go down when the carbon tax is repealed.

(But there is also the “legacy effect” of the much-too-generous feed-in tariffs initially offered by Labor State governments – which continue to roll on in the bills of households not using PVs; in Queensland, the cost of Anna Bligh’s madcap scheme will reach a peak only in 2015-16. The higher solar costs will offset any reductions consumers in Queensland may see from repealing the carbon tax.)

In short, it is silly for Hunt and Tony Abbott to try to portray the result of their abolition move in exact percentage terms for bills.

The associations quintet says: “It is difficult to specify exactly how much prices will fall.”

Changes will also vary between States, between classes of customers and between suppliers – which is why the energy industry is twitchy about Hunt allocating a new watchdog role to the Australian Competition & Consumer Commission in his draft repeal legislation.

The associations argue that such new powers could interfere with the energy markets and that they aren’t needed anyway because of the existing ability of State governments to monitor and regulate retail charges.

They also fear that, just as they are gaining traction in getting State price regulation removed, although the process is tortoise-like and accompanied by much skittishness in Brisbane and Sydney, a new federal government is aiming to re-impose it on a national level under the guise of carbon price monitoring.

And, in Queensland and New South Wales, home to half the residential and small business customers in the country, State regulators have used future wholesale costs to determine 2013-14 prices, meaning, say the Energy Five, that “the carbon component cannot be accurately identified and removed.”

Given how long Hunt has had to take soundings about his abolition plan, you would think he might have got his head around this stuff.

The associations also don’t want him to under-estimate the communications task involved when (if) the Abbott government finally gets its way on this issue.

“Communicating the changes to millions of customers is a non-trivial exercise,” they say. (An economist penned that sentence!)

“When the carbon price was implemented, there were bill messages, bill inserts and briefings of call centre staff to field increased volumes of calls. This required extensive review to ensure representations were correct.”

Their point is that, when everything is taken in to account, the industry will find it difficult to provide a minimum time frame in which it can guarantee all savings will reach all customers.

This is an effort to ward off political populism and tabloid media screeching about how customers X, Y and Z have been cheated of their rights when all the change comes to pass – an outcome that is as predictable as the sun coming up tomorrow, only in this case, under Hunt’s plan, the suppliers will have to deal with Rod Sims and his ACCC stick as accompaniment to the media’s tunes.

The associations argue that the “NEM” works and its arrangements will ensure efficient pass-through to customers of any moves that lower industry costs.

Good luck with selling this in the political arena in the present environment.

As the associations see it, the new government and its advisors believe an analogy can be drawn with the introduction of the GST.

The problem, they say, is that the carbon regime is far more complicated than that for the GST.

A better example, they argue, is payroll tax where there is an impact on underlying costs flowing to consumer prices but it varies, depending on staffing arrangements.

“If you repealed payroll tax,” they explain, “it would take some time for the impact to flow through the supply chain to consumers. The exact impact on final prices would be difficult to predict.”

The bottom line, folks, is that, whatever government is in office, our political leaders have an instinct for action that lacks an essential ingredient – a full understanding of what it is they are trying to fix – and, having over-complicated things, they always reach for the regulatory stick to thwack their way out of the weeds they have sown.

It’s not too late for Hunt and Abbott to get their act together in this situation, but the portents already are a bit of a worry.

As that epigram says, “the more it changes, the more it’s the same thing.”

Seeking the Middle Kingdom

I have been thinking about the middle ground a bit since chairing trade union leader Paul Howes at the Eastern Australian Energy Market Outlook conference in late October and listening to his condemnation of his own Labor Party in New South Wales in particular for abandoning this segment of the national mindset on the coal seam gas issue.

Now it’s a truism that your view of the middle ground depends on where you are standing.

I judge from Howes’s comments that, in his mind, it is the territory between the extremists from the left and right on energy issues (and specifically between the Greens, “Lock the Gate” et al on the left and the likes of Alan Jones on the right on coal seam gas development).

It also needs to be said that, on some issues, there can be no middle ground.

Taking an example from my own life in South Africa in the 1950s and 1960s, there was no middle ground between embracing apartheid and believing that race and skin color should have absolutely nothing to do with a person’s value or rights.

Despite the ranting from the Greens and their ilk, I don’t accept that this absolute view can be applied to energy policy – ie all fossil fuels are bad by definition because of fears about the climate apocalypse. Or that use of nuclear power must be avoided at all costs even if you have concerns about global warming.

Forests of trees have been felled in the US over the decades in argument about who (politically) represents Middle America and the Americans themselves have shifted ground more than once in concluding which of Republicans or Democrats represents their middle ground.

Ever since 1964 I have enjoyed repeating the Democrat riposte to conservative Barry Goldwater’s slogan in a presidential election. “In your heart, you know I’m right,” he told Americans. “In your guts, you know he’s nuts,” retorted the Democrats en route to victory.

Down Under, I think there is a middle mindset and it has dictated over the four decades I’ve lived here (for most of the time) who has held sway in the federal political arena.

I found it interesting over the past weekend – when I was not occupied accompanying my 10-year-old middle grandson on a pilgrimage to his grand passion, the dinosaur exhibition in Sydney’s Australian Museum – to trawl back through the Essential Report polls since we all returned from last summer’s holidays in search of our Middle Kingdom.

In passing, reading these weekly surveys of around 2,000 Australians, I was struck by the fact that the majority made up its mind about the fate of federal Labor when Julia Gillard made her peculiar announcement of a marathon election campaign and really didn’t deviate from this view, even when Labor’s caucus abandoned her – plus also that only eight to nine per cent of the respondents to these polls showed up as Greens supporters and that’s the way the real poll turned out.

The Middle Kingdom tuned out Gillard from early 2011 and that’s how it stayed.

And its inhabitants remain largely unimpressed with the Greens – and became still more so when Christine Milne took over the leadership from Bob Brown.

Finding the middle ground is not necessarily easy.

For example, the most recent Essential Report poll (29 October) shows 31 per cent of respondents think the carbon tax should be dumped and not replaced, 21 per cent would like to see it replaced with an emissions trading scheme, 15 per cent prefer Abbott’s “Direct Action” concept and 15 per cent support the current regime. (And, yes, that leaves 18 per cent who don’t know what to think or don’t care to say.)

Consistently over the year the poll has thrown up that 52 per cent of respondents believe that climate change is happening and is caused by human activity – most of them buy the view that the current bushfires are somehow linked to global warming – versus 36 per cent who think we may just be witnessing a normal fluctuation. (And around 12 per cent who sit on the fence.)

Us Outdoors like the concept of renewable energy, though – perhaps less so the nearer a wind farm comes to your home or, in the case of the ACT, a solar farm to your suburb – and the polling throws up that more than seven out of 10 support a 20 per cent RET for 2020 or want it to be even higher.

And, specifically, three-quarters of us like the notion of wind power (and are oblivious to the cost and supply security issues inherent in going further and further down this path, I suggest.)

Given that population growth is a key factor in any energy strategy, it is also worth mentioning that 45 per cent of respondents think population is rising too fast here – and there are more Coalition voters who answered yes to this than Greens.

So where is the political middle ground here?

Perhaps it can be found in responses to Essential Report polls in which those questioned think the management of the economy and of the health system are three to four times more important than “addressing climate change.”

Ten out of the 15 issues chosen by the pollsters as “important” are considered more necessary of political action than the “moral issue of our times.”

Incidentally, on the issue of privatisation of public services owned by governments, 58 per cent of respondents think it is bad idea, an outcome weighted by 64 per cent opposition by Labor supporters and 70 per cent by Greens. Only 22 per cent think it is a good idea.

Perhaps it is also worth mentioning that, in New South Wales and Queensland, where the Coalition governments are under pressure from various quarters to sell these assets, support in a poll in mid-year stood at 26 per cent and 15 per cent respectively.

Another interesting sidelight of the public mindset, and rather contrary to the view that most of us are “switched off” politics, is that between four and six in 10 respondents acknowledge following the election competitors and the issues on radio and TV or in newspapers.

The surveys throw up, too, that 30 per cent of those aged under 35 read about politics in newspapers versus 57 per cent of us aged over 55 – and the ratios for television are 42 per cent and 71 per cent.

Incidentally, one of the noteworthy responses to these polls, with the benefit of hindsight, given the “oddball” outcome of the Senate election (as the mainstream media describe it frequently) is that voters were signalling back in June that one in three of them were up for differentiating between their support in the lower and upper houses.

So, where is all this going?

It seems to me that the answer is not pursuit of what is common currency in the middle ground but rather our political leaders need to take well-informed decisions on key issues and then undertake highly effective sales pitches in the Middle Kingdom.

This would certainly apply to both the coal seam gas debate and the nuclear question.

Are our political leaders up to doing this?

Well, you’ll have your owns views. Maybe I should undertake a poll?

Avoiding a trap

It says something about the state of the energy debate in Australia at present that, in roughly a week, we have seen a leading trade unionist make a passionate call for the mainstream political parties to embrace the middle ground to see off extremists and the new leader of the federal Labor Party produce a kneejerk negative reaction to suggestions from a member of his own front bench for a new debate on nuclear power at a time when the Climate Change Authority, a Gillard government invention at the behest of the Greens which the Coalition wants to abolish, is calling for a far higher carbon abatement target than today’s bipartisan goal.

Shall I run that past you again?

Never mind, I guess that it really is par for course on this playing field and it wouldn’t be hard to come up with other Kafka-esque examples of the surreal nature of the argument.

As it happens all of the above was happening as the University of Queensland Global Change Institute was publishing a new paper on the Australian power system that, in a sentence, argues it is important for us to pursue a strategy of diversity in power generation technologies and energy sources to keep our options open in initiating global warming mitigation measures.

The UQ paper comments: “A coherent long-term policy framework must focus on a managed transition to a more resilient power system at the lowest possible cost rather than a revolution.”

Notably, in the context of “Electricity Bill” Shorten’s rejection of even consideration of the role of nuclear energy, the UQ researchers suggest the middle ground could include deployment of reactors because “(negative) public perceptions could change quickly if the consequences of global warming assume significance.”

They add: “To retain all options (for the generation mix), it is important to invest in skills, knowledge and research in to the safe provision of nuclear power.”

This is not a million kilometres away from the comment by Gary Gray, until 7 September federal Resources & Energy Minister and now Shorten’s spokesman on the portfolio, who believes “it is completely reasonable that nuclear options should be able to be considered.”

What Gray and Labor senators Mark Bishop and Alex Gallacher want to see is inclusion of the use of nuclear power and expansion of uranium mining in the upcoming, post-election review of party policies.

To which Shorten, via a spokeswoman, snapped that there are “no plans to shift our position because the prohibitive cost alone of creating a nuclear industry in this country makes it untenable.”

To which the Australian Uranium Association promptly responded: “Ah, so it’s only about price?”

The AUA added that claims that nuclear power is high cost and high risk are exactly the sort of assertions that need to be challenged and tested.

As it happens, my friend Jon Stanford, director of Insight Economics and a former senior federal public servant, speaking on a panel about the nuclear question at the Eastern Australia Energy Market Outlook conference, explained that, using the CSIRO “eFuture” technology cost model, he had found that, while the east coast generation mix without nuclear power, would be 50 per cent fossil-fuelled in 2050, bringing in reactors from 2030 could “displace fossil fuels rather than renewables and completely wipe out the need for carbon capture and storage.”

On Stanford’s reckoning, use of nuclear allows 85 per cent of carbon abatement from the electricity sector by mid-century (versus 65 per cent under the model Federal Treasury produced for the Gillard government) and would hold the “NEM” average wholesale price 35 per cent below the level it would reach if reactors remained banned.

Stanford reckons we need three main steps to facilitate use of nuclear:

First, a policy directed towards decarbonising electricity supply.

Second, a high gas price.

Third, a direct action approach by government to underwrite private sector investment in first-of-a-kind nuclear generation, which is what the UK is now doing.

“An optimist might argue that we are nearly there,” he quipped.

A pessimist, on the other hand, might say that, until the mainstream parties take up the call by Paul Howes for Labor and the Coalition to move forcefully to occup the energy policy middle ground – he was focussing on the coal seam gas imbroglio but the point applies more generally – then the Kafka-esque environment will continue to hold sway.

Or, as the University of Queensland researchers put it, “Australia needs a technological portfolio strategy that keeps its options open and avoids the trap of an energy impasse.”

“Electricity Bill” should take time out to read their report, as should the rest of the mainstream body politic.