This time they are front and centre of the debate, with the election falling just as millions of households and small businesses are starting to receive their (higher) electricity and gas bills at the end of winter.

Which is why there will be quite a lot of political interest in the 2013 Australian Petroleum Production & Exploration Association conference taking place in Brisbane at the end of the month.

And some four dozen journalists will be on hand over three days to convey the debate to national newspaper, radio and television audiences.

There’s no doubting the continuing pulling power of this event: with a week to go, it has attracted 3,000 delegates from 30 countries and 850 companies – plus 200 service and supply companies and agencies participating in an exhibition covering 12,000 square metres at the Brisbane Convention Centre.

The attendees will be crowding in to attend an opening morning that has the federal government’s and Coalition’s energy spokesmen going head to head.

The first session features APPEA’s feisty chairman, David Knox, MD of Santos, followed by the new federal Minister for Resources & Energy, Gary Gray, who worked as a Woodside executive for a time, and the Coalition’s energy spokesman, Ian Macfarlane, the last holder of the portfolio in the Howard government.

The Tuesday plenary session kicks off with a presentation from the New South Wales Resources & Energy Minister, Chris Hartcher, whose government is wallowing in a swamp of problems relating to development of coal seam gas in the State as existing conventional gas contracts from interstate start to roll off, rural and green activist opposition to CSG development continues at a high pace and the first of what is expected to be a series of gas price hikes is set to be introduced by the State regulator.

On the final day, proceedings start with a presentation from the Queensland Deputy Premier, Jeff Seeney, whose government is wrestling with rolling issues related to the major CSG-fuelled LNG export projects at Gladstone while also dealing with ongoing power pricing pressures: the State regulator proposes to increase electricity bills by a whopping 21 per cent for 2013-14.

The Newman government in Queensland has a lot at stake in ensuring the success of the LNG developments it inherited from the Bligh Labor regime.

The first cab off the rank in the export game, British-owned QGC, recently told a Senate committee that, at peak production, it expects to be contributing a billion dollars a year in taxes and royalties – enough, it pointed out, to fund 20 primary schools or 1,000 hospital beds annually.

The other two LNG developments will be shelling out similar sums to federal and State coffers. The trio are employing some 27,000 people on the projects.

QGC’s Australian operations managing director, Derek Fisher, will be speaking right after Seeney – as will John Cotter, chairman of the GasFields Commission the State government has set up to deal with rural community concerns.

The Brisbane conference is ideally placed for the upstream petroleum industry to ram home messages between last week’s federal budget and the forthcoming election.

APPEA’s media statement reacting to the budget Wayne Swan delivered on Tuesday took this route.

The oil and gas industry, pointed out association CEO David Byers,is responsible for more than 30 cents of every dollar of national private sector investment at present, highlighting the expectation of Treasury that (to quote the budget papers) “a substantial pick-up in LNG exports in the second half of the decade will support economic growth for years to come.”

The contribution, APPEA adds, includes up to $12 billion a year in tax revenue to Australian governments by 2025 if all the proposed developments go ahead.

This being the case, the association wants to know, why is the Gillard government pursuing “short-sighted” measures hampering gas developments by increasing the industry’s development costs?

The sector, says Byers, “faces challenges in competing in both the domestic and global markets” and decisions to put “further lead in the industry’s saddle-bags” will erode investor confidence.

This is a theme the association and its members can be expected to pursue allegro con brio (“fast and with spirit”) at the Brisbane conference.

They will not be dealing with a shrinking violet in Gary Gray, new to the portfolio but not the business.

Gray, who was national secretary of the Labor Party when Paul Keating was PM, spent six years as director of corporate affairs at Woodside before going back to Canberra as the Member for Brand on the winning side in the 2007 election.

I have been reading a speech he made in Houston in mid-April – the week of the Boston marathon bombings, which swept all else from media coverage – and he had some straightforward advice for the petroleum industry.

(The event was the Global LNG Conference, which will next be held in Perth in 2016.)

You may excel in technical areas, Gray told the LNG companies, but there is a need for better focus on areas such as community engagement, especially when activists are “about spreading fear and confusion.”

His message – likely to be repeated in Brisbane, I imagine – is that the industry has to take a stronger role in “the community politics of energy” and to “stand aside from commercial rivalties (to pursue) the common good.”

Gray said in Houston that “without industry getting this message, fewer and fewer politicians like me will be able to prosecute sensible, logical, science-based policy and sustainable regulatory solutions.”

Given just how cross APPEA and its CSG sector members are about the politically-motivated intervention of Gray’s colleague, Environment Minister Tony Burke, in amending the Environmental Protection & Biodiversity Act ahead of the election to stymie NSW gas development, it will be interesting, shall we say, to see how this sentiment will go down with the Brisbane audience.

In Houston, Gray declared that he “stood in awe” of the intellectual capacity of the oil and gas industry – the engineering, commercial, financial and management skills – and of the excitement it generates.

“You make our world go round,” he told the LNG-ers,” and you make it go round safely and sustainably.”

This month, speaking in Adelaide at a resources and energy conference, he took the point a little further, telling the sector its contribution “is genuinely a sustainable contribution to our society” which can’t be achieved without “productive processing, a vibrant exploration environment and opportunities for global marketing.”

That’s not what Lock the Gate and its ilk, nor the federal government’s Green and independent props in parliament, think or want to hear.

How it will all go down in Brisbane at APPEA, given all the other stuff the federal government has been pursuing, will be fascinating to observe.

One example is he and his department’s attitude to carbon capture and storage.

Two years ago they were hanging their hats, in looking at long-term power supply, on some 40 per cent of generation being coal and gas with CCS by mid-century.

Treasury modelling then said 2050 national carbon emissions would be 25 million tonnes higher without the technology.

This was still the time when the federal government had a $1.68 billion program to support CCS research and development.

It was when Julia Gillard (in July 2011) was telling the media that she believed CCS “will be a big part of the way we deal with energy in the future.”

She said her government would “continue to invest billions of dollars in working with firms to develop the technology of capturing carbon pollution and then storing it” even though at this point, under pressure from the Greens, she was excluding support for the technology from the $10 billion Clean Energy Finance Corporation agenda.

Come forward to tonight’s Budget and Swan, in a joint statement with Combet lauding the government’s “clean energy future” policies, gets round – 50 lines in to the spin – to announcing that $662 million of CCS funding will be “returned to the Budget.”

The Greens will cheer this but the resources sector is unamused.

In a Budget night statement the Minerals Council of Australia’s acting chief executive John Kunkel observes: “The government’s decision to slash funding for CCS is a worrying sign.

“With coal-fired power remaining the mainstay of Australia’s electricity generation, CCS will be a critical emissions reduction technology.

“Now is not the time to be reducing expenditure on the technology if you are serious about addressing the climate change challenge,” he tells a Treasurer, who has just informed Parliament that “You can’t be a first-world economy in the 21st century if you are not on the path to a clean energy future.”

The grab for CCS funds actually came as no surprise to the resources sector.

Anticipating it six days ago, Nikki Williams, CEO of the Australian Coal Association, warned that the move is “short-sighted and illogical.”

She pointed out that three-quarters of grid-connected power supply is coal-fired and the industry receives less than a billion dollars – and now a lot less – to address R&D for emissions abatement.

“Compare this,” she added, “to wind and solar technologies, which generate just three per cent of Australia’s electricity but receive $13 billion in direct subsidies and up to $50 billion in effective industry assistance through the renewable energy target.”

Hitting back at the Greens, who successfully urged Swan to target CCS in cutting clean energy research in this Budget, Williams also noted that less than six months ago an international group of leading environmental organisations, the ENGO Network, had urged governments to back CCS as “a vital technology for dramatically reducing emissions.”

The miners are not the only ones tonight to accuse Swan and the federal government of being short-sighted.

The upstream petroleum industry has used the same epithet to decry tax changes in the Budget affecting exploration costs.

The resources boom, says David Byers, CEO of the Australian Petroleum Production & Exploration Association, has been providing Canberra with windfall tax revenues for the past decade, totalling around $160 billion – and now Swan is hacking further in to investor confidence.

While acknowledging that the Budget has not moved on farm-in tax arrangements as had been feared in some quarters, Byers complains that, overall, steps affecting the industry will make it harder for explorers to invest here at a time when they are finding raising money on global markets increasingly difficult.

To which MCA’s Kunkel adds that changes to exploration tax arrangements “strike at the high-risk nursery of mining” and fly in the face of recommendations of the “Business Tax Working Group” the Gillard government set up last year with the usual noises to show how committed it is to consultation.

Kunkel also takes the opportunity to point out that the Treasury in tonight’s Budget papers is predicting that the carbon price will be $12 per tonne when Australia (on the Gillard government’s schedule) moves to a floating market in 2015 – but Gillard and Swan aim to cling to a price double this for the next two years, imposing, he complains, “a deadweight on our economy.”

While the resources sector, and others in business, are no doubt telling themselves that, assuming the opinion polls are right, this is the last Budget Swan will inflict on them, the situation he and the Gillard government are bequeathing the Coalition must leave them wondering how much cheer they will get from Joe Hockey’s first Budget this time next year?

Reading one local commentator jumping up and down on a “climate sceptic” this week like a Wigan football fan after the cup victory, one is inclined to also point out (yet again) that the most important Australian issue is the cost for end-users of any carbon-oriented transformation.

The two big electricity lessons of the past three years are that (1) there is a limit to the size of the power bill that householders (aka voters) will tolerate and (2) in an environment of high energy costs, high labor costs and an inflated dollar, the largest local user of electricity and a major employer, manufacturing, starts to go out backwards – with parallel bad impacts for the national economy and for power suppliers.

The Greens’ approach to the carbon issue for Australia – as overseas emissions continue to rise because major nations decline to go down this path – is to junk the existing fleet of fossil-fuelled generators.

This is a move that, no matter how the radicals wriggle and squirm, will require half a trillion dollars (at least) to be spent on moving to 100 per cent Australian renewable electricity supply.

In order to lay the ground for this move, the Greens must demonise the gas supply industry and thereby create another significant energy problem for householders and manufacturers.

And they must ensure that research support for carbon capture and storage – a crucial element in a future power supply system still largely using fossil fuels – is crippled and that an economically illogical ban on nuclear power is sustained by politicians scared of a voter backlash they expect the Greens to orchestrate against any backsliding.

The levels of hyperbole and misinformation needed to sustain this line of attack are not small – and at least to date the energy supply sector, including coal producers, gas explorers and producers and nuclear adherents, has not mounted an adequate public pushback against the green mafia.

The role of “our ABC” in overtly supporting the latter against the fossil fuel industry is but one example of how the communications struggle is not being won by energy suppliers.

Much the same can be said about the mass circulation newspapers in the Fairfax stable – while the News Limited tabloids largely just enjoy playing up a good stoush and making the most of the mafia’s stunts.

Sadly, the federal government energy white paper released last December has not provided a springboard for a much-improved public debate, not least because the government is conflicted by trying to simultaneously sustain a sensible energy supply system and to pander to the Greens and a handful of independents with their own axes to grind.

The federal political landscape seems certain to change on 14 September and a big part of the Greens’ approach at present is to maintain a blocking foothold in the Senate to counter a crushing defeat in the House of Representatives for Labor – hence the increased noise from their corner of the political ring.

There are many ways in which the energy industry can counter their attackers through more clever communication.

One useful way to address the longer-term situation is to mount information-rich public conferences where the issues can be thoroughly debated and ammunition collected for use in other media.

One such was the “Australian Domestic Gas Outlook” conference, staged by Quest Events and, as readers know, with which I was heavily involved. It attracted 170 delegates and a strong cast of speakers, who in turn attracted a quite high level of media attention at the time.

Another now being pursued, and at which I will chair a session, is the conference on “Nuclear Energy for Australia” being staged by the Academy of Technological Sciences & Engineering in Sydney’s Powerhouse Museum on 25-26 July.

The level of interest is indicated, I am told, by 120 registrations to attend already.

The conference will feature international and national speakers whose topics will include how the east coast grid could cope with nuclear energy, community acceptance of going nuclear, the regulatory requirements, the national uranium reserves picture and the issues of waste disposal.

One of the leading lights (sorry) among the speakers will be professor Peter Guthrie of Cambridge University, who will give a keynote talk on the energy alternatives in managing the global challenge of sustainability.

Guthrie is the co-author of a book about to be published on energy scenarios from now to 2050 for the UK – where muddle-headed political approaches to energy policy have Britons on the brink of crisis.

ATSE, in promoting the event, poses two of the key questions to be addressed: Where can nuclear power stations be located in Australia? Can they provide (relatively) low-cost power?

The academy also notes the white paper acknowledges that nuclear energy is a proven, low emissions technology but the present government is only prepared to consider it as a reserve option if other technologies (wind, solar, geothermal, cleaner coal) turn out not to be viable.

The flaws of this approach in terms of secure, reliable and affordable energy in the medium and long-term future hardly need extensive exposition here – and the Business Council has been vocal lately in arguing the importance of a technologically-neutral political stance on future power generation.

You can find all the details for the nuclear conference on the ATSE website (www.atse.org.au).

You would also find it interesting, in this context, I think to go on to the Brave New Climate website of professor Barry Brook of the University of Adelaide.

Brook has published the entire new Martin Nicholson book on energy issues – “The Power Makers’ Challenge” – on the site. (Nicholson is another speaker at the ATSE conference.)

In his foreword to the book, Brook urges us to carefully scrutinise the case for all of the alternative energy technologies available for a “fast-developing, energy-starved world.”

The reality of the energy situation in Australia today is that power users, householders, small businesses and industry in particular, are badly bruised by the pricing developments of the past decade and most are in no mood to be frogmarched in to any supply transformation that will make the pain worse.

The Greens and their fellow travellers – among whom must now be counted Labor leaders like Gillard, Combet and Swan although I take leave to doubt that others in the government ranks are at all comfortable with where it has landed – are engaged in a non-stop mardi gras that relies on color and movement, not substance, to distract voters.

A key facet of this is to keep the mainstream media engaged in the performance, supported by sustained use of social media.

Events like the ATSE conference (and the gas outlook forum last month) can help provide an antidote to the tarantella dance on energy that is the main feature of the radicals’ street theatre.

His email point is that “Combet has no regard for the Yallourn outage or the Mortlake (gas plant) commissioning date.”

There are a number of other facets to this issue.

Perhaps the most important is what Joe Citizen hears through media coverage – in the case of the Fairfax newspapers, for example, this was a headline that said “Carbon price working? Coal slumps, clean energy soars” over an opening sentence that asserted: “Electricity generated by Australia’s highly-polluting brown coal plants has fallen 14 per cent since introduction of the carbon price while renewable power has soared.”

As most people who know anything about the media are aware, the headline and opening paragraph are about the limit of what casual readers (ie the majority) of newspapers (or listeners to radio and television) take in.

Read all the way through the Fairfax story and the qualifiers I come to below are there to an extent, but not even hinted at in the starting sentences where they matter – and anyway, 90 per cent of the story is being conveyed on radio and television, sans any qualifiers at all.

The mass message, therefore, is that the carbon price is a huge, early success, a line picked up and spread by the green propaganda machine, using blogs and the social media.

You had to read nine sentences in to the Fairfax story to find a quote from the Grattan Institute’s Tony Wood to the effect that “it is probably wishful think to ascribe a heavy-lifting role to the carbon price” in the east coast market environment.

The next most important facet is what Combet actually said.

His written media statement began: “The carbon price is already working to clean up Australia’s electricity sector, along with the Gillard government’s policies like energy efficiency programs and the enhanced renewable energy target. ‘NEM’ data show big falls in electricity generation from the country’s most highly-polluting power stations since the carbon price started on 1 July 2012.”

If the Trade Practices Act applied to political statements, one could have a merry time arguing that this is a “false and misleading” claim, a cardinal sin for companies under the legislation.

The third important facet, of course, is what has actually happened in the 12 months from May last year to April this year.

The key issue here is the ongoing decline in “NEM” power demand with the biggest single impacts in this period coming from (1) the closure of the Kurri Kurri aluminium plant near to Combet’s own federal seat of Charlton, cutting power demand from coal generation all on its own by 2,600 gigawatt hours a year, and (2) the closure of a large chunk of Yallourn power station operations (source of 11 million tonnes of greenhouse gases a year) as a result of flooding.

A substantial part of the rest of the impact on “NEM” demand and on carbon emissions comes from the problems of the manufacturing sector (hampered by a high $Australian and strengthened international competition).

Another factor, simply ignored by Combet, is that, after a significant rise in southern dam levels following the breaking of the drought (the one that the likes of Tim Flannery told us, in effect, would never end because of climate change), the May-to-April period saw a big increase in hydro supply to the market – 3,600 gigawatt hours from the Tasmanian and Snowy systems.

The fall in consumption, notably in NSW, the largest demand region in the “NEM,” and the rise in availability of hydro power have contributed to depressed wholesale prices, in turn leading to mothballing of units at black coal plants in NSW and Queensland.

The disproportionate way in which the Gillard government has handled power station compensation under its carbon policy, disadvantaging black coal generators while helping brown coal ones, is yet another factor – but not one about which Combet wants to boast given that some of the plants being dudded (and jobs lost) are close to home.

Serious people in the supply business think that about a quarter of the “NEM” reduction in demand can be attributed to greater energy efficiency, in turn partly driven by the big spikes in retail bills (mostly influenced by higher network charges, an issue on which Prime Minister Gillard has been strident in the past year).

And bear in mind that part of the energy efficiency gains flows from the federal government’s notorious insulation give-aways, provided in the post-GFC spending spree that Gillard & Co would rather voters don’t now remember.

The serious folk also think another quarter of the demand fall can probably be attributed to the rise in household use of solar PV systems, a product of excessive subsidisation by federal and State Labor governments, causing further increases in bills for the majority of home-owners not using sun power.

The Australian Energy Market Operator’s Matt Zema recently told a Grattan Institute forum on electricity demand that his organisation attributed “about half” of the east coast consumption slump to “drops in the manufacturing and commercial sectors, a lot of which is the closure of manufacturing.”

Now it has taken me 900 words to explain things thus far; that’s 700 words more than a 24/7 news reporter is going to spend on explanations – something on which politicians bank in spinning their lines.

Thus Combet, framing his “grab” for the electronic news at a media conference last week, is able to get away with saying this as his introduction, the bit most likely to go to air: “The carbon price mechanism the government has implemented is working. It’s doing what it was intended to do and that is to cut our emissions.

“Data from independent agencies demonstrate that emissions in the ‘NEM’ fell by 7.7 per cent in the first nine months of carbon pricing. That’s a reduction of 10 million tonnes of greenhouse gas emissions.

“We have also seen, since the carbon price came in, that generation from renewable energy has increased by almost 30 per cent.”

A small masterclass in the art of spinning – and not one media question that followed demonstrated any understanding whatever of the factors I have set out above.

A fine example of what Cole Porter put in to song: “Let me live ‘neath your spell. Do that voodoo that you do so well.”

Candidates in the upcoming federal election, as well as serving members of State parliaments, know this only too well.

While it seems likely we have seen the last for the time being of viciously high bill spikes (except in Queensland, where consumers are facing a 21 per cent rise for 2013-14), householders, small businesses and large companies are still feeling the pain and remain decidedly unhappy.

There’s plenty of evidence for this on the Internet once you get beyond the froth and bubble of the “mainstream” media.

As John Pierce of the Australian Energy Market Commission said in his Canadian speech (see my 8 May post), the “national” energy market on the east coast is nearing its 15th birthday with scrutiny of it more intense than at any time since its conception – and this is down to power pricing as much as the never-ending debate on carbon policies.

To which, I’d add that the scrutiny of the 1990s was mainly between contending factions in business and on the business pages of daily newspapers. Today’s focus comes from numerous quarters and, when covered by the media, tends to be on the news pages, often page one in the past year or so.

Even in the current, perhaps brief, period of lessening attention, stakeholders are still vocal in insisting that the supply industry explain and address electricity price rises.

They are just not making the headlines at present.

But it would be a big mistake for suppliers to think that the worst (in terms of media abuse) may be over.

The prices problem hasn’t gone away and the media attention will return.

Promises from regulators and politicians that the cost pressures will “moderate” over the next few years will not alleviate this and the industry is still struggling to come to terms with how it plays the game.

Part of management of the problem requires more sophisticated dealing by both energy retailers and governments with the issues of energy hardship and availability of relief to those most in need.

With this in mind, for the “Powering Pricing 2013” conference I am helping to organise in Sydney on 22-23 May – see the Quest Events website (www.questevents.com.au) for details – we have enlisted AGL Energy’s Tim Nelson to talk about the intersection of energy policy, social policy and retail electricity deregulation.

Ron Ben-David, the Victorian Essential Service Commission chairman, will talk about the long-term interests of consumers and we have set up a panel discussion involving Edward Santow (CEO, Public Interest Advocacy Centre), Gavin Dufty (policy director, St Vincent de Paul) and Lynne Chester (energy researcher and senior lecturer at the University of Sydney) to dissect the affordability issue and discuss the necessary reforms.

A key part of cost management is the introduction of flexible pricing and we have also organised a panel discussion on this controversial policy involving Jo Benvenuti (CEO, Consumer Utilities Advocacy Centre), Ramy Soussou (deputy CEO, Energy Retailers Association), James Myatt (CEO, Australian Power & Gas) and Hugh Outhred (senior visiting fellow, University of New South Wales).

We are following this up with a panel on consumer acceptance of smart meters fieaturing Benvenuti, Soussou, Jemena’s Ian Israelsohn (GM policy & external affairs) and Mitch Anderson (chief executive, ERM Power Retail).

As readers of this blog know, one of my areas of interest when it comes to the cost of power is the impact on small business (bearing mind that there are some 330,000 small businesses in Australia employing about 1.7 million of us).

The conference has Innex Willox (CEO of Australian Industry Group) tackling not only the impact of price spikes on this sector but also the effect of time-of-use pricing.

I’m also going to be more than a little interested to hear what Chris Hartcher, the NSW Energy & Resources Minister, will have to say to the conference about the introduction of smart meters in the State and the constraints on NSW deregulating retail prices.

With three million of Australia’s 10 million household customers living inside NSW, how the government tackles these issues has national implications, too.

From where I am sitting, far too much of the debate over the past two years has missed the supplier/consumer nexus through direct exchanges – we have industry talking to politicians, regulators and itself while consumer groups talk to politicians, the media and each other.

Origin Energy has picked up on this through its new marketing efforts, including putting messages on Fantales wrappers (see my post “Somewhat in the dark” on 2 May.)

Part of the “Power pricing 2013” effort is to see if we can get more of a consumer/supplier dialogue going and feed the outcomes back to the politicians.

In this respect, John Pierce made a worthy point to the Canadian conference.

“Consumers don’t buy electricity because they want some kilowatt hours,” he said. “They want coffee or a hot shower or to cool their homes or workplace. The value of electricity to a consumer is a function of the value derived from its end use.”

It seems to me that when the debate becomes almost solely about technology, arcane regulatory issues and pointscoring over the cost of green power schemes – which increasingly it has in recent times – the consumers’ day-to-day interest is lost to view, as is the customers’ understanding about what it takes to satisfy their needs.

A two-day conference won’t change this, but it may provide some useful pointers to what will do so.

One of the G&S lyrics popped in to mind today when I started to read the very interesting paper the Australian Energy Market Commission chairman, John Pierce, delivered in Canada overnight to an international conference on “the regulator’s balancing act.”

(The full paper is available on the AEMC website.)

No, the song was not “A policeman’s lot is not a happy one,” but rather the paradox lyric from “The Pirates of Penzance,” part of which runs: “A paradox/that most ingenious paradox! We’ve quips and quibbles heard in flocks/but none to beat that paradox!”

What brought this on?

It was this comment by Pierce, telling the international audience about the Australian energy situation: “ We are currently faced with a paradox where wholesale prices and energy demand are declining while retail prices are increasing.

“Wholesale electricity prices have been depressed with an abundance of subsidised renewable energy entering the market at a time of lower electricity demand.

“Retailers are facing higher costs due to significant new network infrastructure (development) of recent years and the costs of government environmental policies, such as State feed-in tariffs and Australia’s renewable energy target.”

This needs to be read (and re-read) slowly aloud to a whole crop of federal and State politicians, and some 24/7 media journalists, who in recent days, having perhaps exhausted the mileage in beating up on electricity networks, are now singling out the energy retailers for fresh “blame game” attention as bills continue to increase.

In 75 words, the estimable Pierce has managed to sum up the whole east coast power price scenario, illustrating how interventions of the past are playing out in our present and why instant, kneejerk solutions will not address the problem.

Of course, it takes him 28 pages of script to flesh out the story.

The line that the AEMC wants to have heard back home is set out in a media statement the commission has released today, quoting Pierce as saying that energy watchdogs around the world face a common challenge in walking a fine line in over- and under-regulation in pursuit of the public interest.

The AEMC solution is to push for the right regulatory framework rather than kneejerk interventions by the body politic to direct supplier behaviour.

The political problem, of course, is that going along this road does not deliver outcomes to satisfy a tabloid newspaper today or consumers tomorrow.

This is underlined by Pierce’s comment that “the main driver of upward pressure on retail prices (in Australia) in the short term continues to be network costs but (their) rate of increase is expected to moderate considerably.”

Note “increase” and “moderate.”

Pierce clearly makes the point in telling the Canadian conference that the new rules for network regulation the AEMC has carried through inter-government negotiations here “should be reflected in the next cycle of determinations” conducted by the Australian Energy Regulator, which begins this work in July next year by considering New South Wales bids for capex and opex.

And there’s the other paradox, you see: the pollies need to be seen today to be solving the energy price problems quickly where the rules can only deliver new outcomes (and not necessarily cheaper ones) down the track and over a five-year period.

This is encapsulated in the current tosh that is our everyday media fare: privatisation is bad, deregulation is dangerous, the market doesn’t work, the generators are playing shady games, the network bosses are up to no good, the energy retailers are greedy, the watchdogs are weak and the consumers are being conned.

Pierce notes that the AEMC has given the legislators a package of recommendations on “ways for consumers to exercise greater choice in how and when they use electricity,” highlighting the fact that the blame game has to give way to politicians providing a better playing field and consumers, much better informed, taking responsibility for their power use just as, for example, they already manage their own transport arrangements and costs.

(And, as one always needs to interpolate here, our governments also need to take responsibility for ensuring that the most vulnerable electricity customers receive help efficiently and effectively, something on which they have dragged their feet for several years.)

The AEMC chairman adds that, under the “incentive regulation” route he is promoting, networks will be clearly accountable for delivering the desired service levels to consumers, efficient costs will be “revealed over time” as the businesses make efficiency gains, and “most importantly, over time, consumers will benefit because prices move towards a level reflecting the efficient costs of providing services.”

Pierce also did a neat job overnight, I think, of dealing with the feverish Australian debate about “poles and wires.”

He said: “There has been much public commentary, with some claiming that investment has been excessive and likening it to ‘gold-plating’ while others counter that (this) is a convenient whipping boy.

“So which is it? As with most complex issues, the truth often involves multiple shades of grey.

“There is no single cause of the rising cost of (east coast) network infrastructure.

“The reasons vary across network businesses and locations.”

The common trends he sees include the tightening of reliability standards for networks by governments, significant investment in some areas to replace infrastructure installed in the 1950s and 1960s, the increased cost of finance as a result of the global crisis, moves to meet the peak demand levels forecast when the regulatory determinations were being made and, finally, failings in the regulatory frameworks (put in place by politicians, I emphasize) to cover the allowed revenue and prices for networks.

Read this against the inflammatory outbursts of the past 12-18 months from politicians, the tabloid media, shock jocks and stakeholders with vested interests.

Pierce’s summation in his Ontario speech also makes interesting reading, I think:

“Policymakers, legislators and regulators need clear and robust objectives,” he said. “ (They need to) establish strong decision-making frameworks – and then sometimes take a back seat to allow the market to work.

“We must be alive to the prospect of regulatory failure as we are to market failure and be suitably humble in concluding that regulators know what is in the best interests of consumers.”

I doubt whether a 28-page speech is going to be read by too many of the people who should be getting this message. So, if you are able, pass this around to spread the sensible thoughts of one of the key people actually addressing the paradox of today’s energy market rather than merely prating about it.

Entitled “Trust and Energy Governance in Australia,” the four-page paper is to be found on EPIA’s website (www.energypolicyinstitute.com.au).

In it, executive director Robert Pritchard makes five key points:

(1) Public mistrust is deeply affecting the energy industry; (2) outbreaks of political activism, with inadequate responses by government, could become an insuperable obstacle to the entire process of economic development; (3) consultative processes are inadequate; (4) the energy industry has good cause to be alarmed; and (5) there is a need to provide for genuine participation by stakeholders in an independent energy institution which brings sound governance and transparency to energy policy.

The core issue, Pritchard says, is that “public trust in government is pretty much broken.” Economic and public interest demands that greater emphasis be paid to genuine public participation, he adds.

Pritchard and I are in strong agreement on this trust issue.

We have discussed the situation over many months.

If you go on to my new OnPower commercial website, you will find a televised interview I have done with him in which he addresses the topic as well (see www.onpower.com.au).

In the EPIA paper, Pritchard adds: “Both industry and the public have lost confidence in current energy governance systems.

“To some degree or another, this is apparent in all countries governed by systems of representative democracy but the shortcomings are particularly apparent in Australia due to the complexities of the federal system of government.”

One could produce a large and alarming list of examples at federal and State levels of government, embracing both major parties, to illustrate and support the contention that public trust is broken – going way beyond energy issues, too.

In certain quarters, the standard reaction is to take the view that we are over-governed in Australia and that the political gene pool among 23 million people can’t cope with running nine administrations (federal, six State and two Territory governments).

The solution is “let’s just have one.”

I recall saying exactly that to a Business Council of Australia private forum some 12 years ago – mostly to stir an audience I thought was mouthing platitudes, I confess – and being told irritably by the then BCA president that I wasn’t being helpful.

The reality, of course, is that getting rid of all but one of the nine jurisdictions just isn’t going to happen, although I see no reason why the other States can’t follow Queensland’s example and ditch their upper houses.

Even this doesn’t necessarily mean that some much-needed policy steps would be easier to implement.

Even with a one-house parliament and a massive majority, the Newman government in Queensland is too scared of a community backlash to contemplate privatising the State’s power network businesses – which makes one wonder whether the O’Farrell government would be any more brave if it didn’t have to negotiate this step through its Legislative Council as well as the Legislative Assembly, where it will be dominant until at least 2019.

Paul Keating would have defenestrated the Senate if he thought he could achieve it and it may seem perverse to argue that he was wrong, but I think giving the States and the Territories the sway they hold in the federal upper house is a necessary safety valve in our society – and it can be made to work in the most divisive of circumstances, as John Howard demonstrated with the goods and services tax.

(Every time Julia Gillard, Wayne Swan and Greg Combet shrill their derision of the Coalition for its highly-colored opposition to the carbon price I wonder if, at least privately, they think back to the extra-ordinary things Labor predicted about the introduction of the GST and inwardly shudder with embarrassment.)

Coming back to the EPIA paper, Pritchard argues that, in an area like energy market reform , the present intergovernmental system under the umbrella of the Council of Australian Government just isn’t effective.

He argues that energy policy needs closer and more regular attention than two white papers published eight years apart, criticising last year’s one for being long on discussion of principles and options and short on policy options.

His solution lies in the establishment of an independent national energy commission, with a governing board on which both industry and the community are represented and a charter to “make recommendations to governments on policies for efficient, safe, secure, environmentally sound and competitive energy supply.”

A look at the website of the National Energy Board of Canada (an example Pritchard cites), an entity set up a half-century ago, shows both the value of this kind of organisation and the complexities involved in making it function in a federal system (Canada has 10 provinces and three territories).

Views will differ on the Pritchard/EPIA proposal, but what is surely beyond serious debate is that their diagnosis of what ails Australian energy policy is on the money.

Pritchard sums up the prevailing climate like this: “The public simply don’t know what to believe about the energy industry any more. They see a fragmented industry without control of its own agenda and they have grown to mistrust what they see.

“This regrettable situation is attributable to the many partisan, wild and often irreponsible views (on the industry) emanating from multiple sources and egged on by social media.”

As he says, public mistrust provides fertile ground for political activism – and “it is very disconcerting to investors when politicians respond to activism with the suggestion that the onus is on the (energy) industry to demonstrate its social licence.”

I agree with his view that, in fact, the onus is squarely on governments to provide “diligent environmental regulation” with high standards responsive to public concern – and on industry to implement best practice.

This intervention is timely and the underlying issues on which the EPIA shines a light deserve serious debate.

If we don’t resolve this problem, Pritchard warns, we risk “reverting to the law of the jungle.”

We certainly risk a more expensive, unwieldy and inadequate domestic energy supply system, job losses and continuing community stress — all before this decade is over.

There is nothing minor about the CCA’s project.

The Grattan Institute describes it as “the most important step in Australia’s climate change policy since the carbon price was introduced last July.”

The agency is embarked, as required by its enabling legislation, on a study – which it is calling the “Caps & Targets Review” – of progress to date towards meeting medium and long-term emissions reduction targets and, the point with political heft, appropriate future emissions goals.

It gives the impression of being in somewhat of a hurry, despite the February reporting date, because it has set the end of this month as a deadline for submissions to the review.

Does it plan to rush out a draft report before 14 September?

The CCA, which is chaired by former Treasury Secretary Bernie Fraser and managed by Anthea Harris, gets an opportunity to talk about the project today and tomorrow (6 and 7 May) at forums being run in Melbourne and Sydney by the Grattan Institute.

Tonight’s event is sure to get media coverage because it features carbon guru Ross Garnaut, in his guise as a professorial fellow at the University of Melbourne, as well as Harris.

Garnaut will deliver “his expectations” of what Australia’s emissions caps and targets should be.

The current political situation in this space is that both the Gillard government and the Abbott-led Coalition are committed to delivering an Australian target of reducing emissions to five per cent below 2000 levels by 2020 but with widely differing approaches to the goal.

As every week brings fresh evidence of an impending rout for Labor at the September federal poll, it is the Coalition’s approach that takes centre stage – and it, of course, is committed to repealing the carbon tax, closing down the CCA and the Clean Energy Finance Corporation, reviewing the renewable energy target and, after a quickie energy white paper in 2014, bringing in its own form of abatement policy through “direct action.”

Its opponents are left hoping for an outcome in the half-Senate election that will stall the Coalition’s intentions and Abbott & Co are brandishing the threat of a double dissolution to achieve their ends.

(In passing, the Senate outcome may turn out to be somewhat different from common expectation. While the media’s funny bone is being currently tickled by one Palmer, the smart money is on the Katter-ites to make a significant impact, leaving them a key player on the crossbenches after 14 September.)

Those opposed to the present levels of the RET are unimpressed with the analysis of the 41,000 GWh by 2020 goal undertaken by the Climate Change Authority in a review recently accepted by the Gillard government, asserting that the true costs of this approach have not be established.

The Coalition has promised an early review of the RET and the betting is on it opting for a “true 20 per cent” target by 2020, implying a goal of some 26,000 GWh.

A capsule perspective of the overall abatement situation would be that the 2020 reductions target is perhaps deliverable, not least because of the fairly dramatic lowering of the domestic power demand growth trajectory, but that the 2040s or 2050s notional goals are a pipedream without a major transformation of the electricity generation sector.

The serious issue for the longer term is whether new generation should be nuclear – anathema to some segments of the Labor Party and to the Greens – or whether there should be a much greater thrust towards the use of wind power, solar power, geothermal energy and perhaps wave power.

As well, the prospects for long-term use of carbon capture and sequestration technology, also anathema to the Greens, are an important consideration.

The recent survey of a 100 per cent renewable energy sector that was forced on the Australian Energy Market Operator by the Gillard government at the behest of the Greens (part of the carbon tax deal after the last election) is being held up as showing the 100 per cent green dream is “realistic” – but no-one, including AEMO, has talked about the level of carbon tax (because it would have to be a tax not a commitment to a global emissions trading price) that would be needed to achieve this ambition.

Moreover, this is not a price that can be left floating in the imagination of today’s policymakers but a “long-term, credible and predictable” price (to quote the Grattan Institute) on which developers can depend to underpin their investment plans.

Writing back in last October, when the prospect of a Gillard revival instead of a rout of historic proportions was still being touted in the media, the institute’s Tony Wood, who is organising the twin forums on the CCA project this week, observed: “If governments do not maintain their commitment to constrain emissions, the carbon price will stay low and investment in low-emissions technologies will remain critically inadequate.”

The Climate Change Authority, in its issues paper for the new review, available on its website, sees four main issues needing its attention: (1) the science-related global emissions budgets, (2) approaches to sharing these budgets among nations, (3) the extent and nature of likely international action and (4) the economic and social implications of different emissions reductions goals for Australia.

Now, to be blunt, the ACA’s opinions and $2 will buy you a fizzy drink when it comes to issues one to three. The UN and all its sherpas are currently standing in the foothills of Mt Kyoto Treaty Two and gazing hopefully in to the cloud cover, hoping for a break between now and 2015.

The Coalition intends to throw down the CCA’s tent and strike out on a different path.

Whether it will wait for this report to be handed over next February is an interesting question.

That’s why I speculate that the agency may be scurrying towards bringing out a draft report before the election, leaving a tombstone to haunt the Coalition, some will hope, as it spends a decade or so in power after the September poll.

If you are time-poor, and most business managers, investors, consultants and policy advisors are these days, it gets more and more time-consuming sifting the “ought to read” stuff from the “why did I bother” dross, let alone reading it.

This is a key part of the commercial exercise I am pursuing with media company ArmstrongQ in publishing a new energy website, OnPower, to be found at www.onpower.com.au and targetting time-poor stakeholders, while continuing to provide commentaries on this Coolibah site and on the “Business Spectator” website (see www.businessspectator.com.au and click on “The Spectators” to find my contributions there).

(In the May to April period of 12 months, I find I have written some 150,000 words on energy issues through these vehicles, which is rather a lot really.)

The key challenge is not so much focussing on what’s “interesting” – because some of the fringe stuff is interesting in its own peculiar way, for example the current theorising about a wholly renewable power system – but what’s “meaningful” in terms of information, data and opinions that impact on the chain of supply in the real world.

This would be tricky enough personally if my interest was purely in electricity supply, but it is embraces the broader area of energy supply, not least the gas industry, a product of spending a quarter century at the coal face, so to speak, of both sectors through running national industry associations and doing sundry other such stuff.

It involves me in far too much reading (both of hard copy and on PC screens), a myriad of conversations (so many people are generous in sharing their knowledge and their views) and, not least, in participating in relevant conferences – of which there are two this month, the “Power Pricing 2013” forum being staged by Quest Events on 22-23 May in Sydney and, right after it, my annual foray to the Australian Petroleum Production & Exploration Association conference in Brisbane from 26 to 29 May.

When I managed APPEA in the 1980s, its conference attracted 500 to 800 delegates and the first exhibition I staged for it (in 1991) gathered 41 participants. These days APPEA routinely expects 3,000-plus delegates (from 30 countries) and its exhibition in 2013 is attracting more than 200 participants, many from the service businesses, occupying 10,000 square metres of space at the Brisbane Convention Centre.

APPEA conference highlights the time poverty issue: you have to cope over four days with the many conversations you want to have, with attending your pick of a smorgasbord of plenary and concurrent sessions (there are about 100 speakers in all) and with touring the exhibition area comprehensively – because there is a huge amount of info to be harvested from the stands.

At almost 71, I confess I now find the APPEA week a bit tiring (not least when one has arthritis as a playmate) but there is nothing like it in the southern hemisphere as a source of energy sector information-gathering. (Which is why it attracts about four dozen journalists from around the country, too.)

Including my time managing APPEA, I have attended some 30 of its conferences and they are the bees’ knees in terms of sharpening insights.

This time, apart from four senior politicians (new federal Energy Minister Gary Gray, Coalition resources and energy spokesman Ian Macfarlane, Queensland Deputy Premier Jeff Seeney and New South Wales Energy Minister Chris Hartcher), the 2013 conference features two of the big-hitters of the global energy scene: Royal Dutch Shell CEO Peter Voser (just elected “petroleum executive of the year” by his international industry peers) and the International Energy Agency’s chief economist, Fatih Birol.

Canny APPEA-goers make advance decisions about what they want to hear – to avoid the “I wish I had gone to that” syndrome at the conference end – and high on my list will be the final day’s plenary session focussing on onshore gas resources and featuring Derek Fisher, the QCLNG managing director, Amnerican lawyer David Neslin looking at the US shale “revolution,” Geoscience Australia boss Chris Pigram (looking at the potential next big discovery areas) and Queensland GasFields Commission chair John Cotter – plus a panel session involving them, chaired by broadcaster Ali Moore and adding in former federal minister Peter Reith, who is chairing a gas task force for the Victorian government.

This plenary session will also feature Jeff Seeney, whose electorate has seen him involved in the Queensland gas seam debate for years.

Conferences play a useful role in the resources and energy issues debate in Australia. Senior players take the good ones seriously and their presentations are valuable in getting better briefed on current developments.

I have at my elbow, as I write, the presentation to the Macquarie Australia conference in the past week by AGL Energy CEO Michael Fraser, which, as they say in my trade, is “chock full of nuts.”

As an example, Fraser highlights how important manufacturing is to the east coast electricity sector and how the weaknesses of demand in NSW are playing on the nerves and budgets of the supply chain.

The closure of the Kurri Kurri smelter in the Hunter Valley alone, he points out, has slashed 2.6 terawatt hours a year from NSW demand.

The upward spikes in gas prices, and likely higher ones to come, he says, will put at risk industries such as food processing, brickmaking, cement production, metals manufacturing and chemicals production – which is not a pretty outlook for the State economy or the demand prospects for electricity suppliers later this decade.

All of which plays on the viability of the generation sector.

Fraser’s talk caught the media’s attention, in part, because he is quite dismissive of the NSW sales of remaining generation assets. “We don’t see a lot of value in them.”

He notes that 24 per cent of the State’s 16,000 MW of installed generation capacity is out of service today.

Given that NSW is the largest regional economy in Australia, Fraser’s points and the general mess that is the CSG environment in the State are harbingers of some serious questions for what will be Coalition governments in Canberra and Sydney come 2014.

In a presentation to the Macquarie Australia Conference this week, King said opinion polling undertaken for his company shows that 72 per cent of respondents believe they are knowledgeable about electricity and gas – and 12 per cent consider themselves very knowledgeable.

However only 14 per cent of those polled could then correctly identify what contributes most to their energy consumption at home.

The media have been awash for almost two years with news and “news” (ie assertions and misinformed claims) about electricity, so it is also interesting to find that the Galaxy polling for Origin throws up 18 per cent of poll respondents who believe that the carbon tax is contributing most to the cost of providing energy, 17 per cent who point the finger at distribution networks for the rising cost of power and 26 per cent who blame retailers.

In a media statement, the company goes further: it acknowledges that the Australian energy sector is failing to engage and inform its customers.

This is something of a seminal moment that should not be lost in the ebb and flow of the sea of media coverage of the industry.

Where one major retailer goes, others will follow.

That they all have an awful lot of catching-up to do in pursuing (and overcoming) the prevailing community perceptions is a given.

This goes double for the distribution networks, who have been made the scapegoat for the current energy supply situation by politicians, the media and other players – and who are nonetheless the vital link between small end-users and the power stations.

How can they turn themselves in to the good guys?

Origin’s executive general manager Phil Craig says: “The energy industry has tried many methods to inform consumers over the years (but) many of them are outdated and the sector has not kept up with the times.

“Hundred-page reports, broad-ranging websites, colorful bill messages and inserts, beautifully-filmed TV commercials are not working.

“There is plenty of debate about energy, but the industry has not kept up with how people consume information.”

As a consequence, Craig wryly observes, an industry charged with keeping the lights on has been keeping its consumers ‘somewhat in the dark.”

Just how poorly-informed they are becomes apparent from the Galaxy research.

For example, space cooling is responsible for just six per cent of average household usage, but a third of the poll respondents think it contributes to most of their consumption.

Only 14 per cent of those polled correctly identified the appliances taking care of half of household demand.

(Another nugget from the research that won’t please those who believe the nation is seized with the need to go green: Galaxy found that searching for tips to save money is more than twice as popular as searching for green energy information – 71 per cent to 33 per cent.)

Grant King says Origin is coming to terms with the fact that traditional ways of communicating with consumers and the community at large are not dealing with the mountain of misinformation about the energy industry.

The company has launched a new campaign that includes providing energy messages on the wrapping for a popular sweet, Fantales, backed up with a social media exercise at #knowledgeispower and a new website talking about energy use, management and options.

(Which, I see, includes the interesting point that the average Australian household uses 6,500 kilowatt hours of electricity a year but average payments for this service range from $1,500 to $2,500 annually, depending on location and a range of other factors.)

One of the things thrown up by the Galaxy poll is that about half the community turn to Google rather than retailer websites (15 per cent) in search of information and advice.

As I have observed more than a few times, the problem with using Google is that it is like standing under a waterfall with a cup in search of a drink.

Unless you know what you’re looking for, the torrent of Google information is frequently less than useful and probably also just adding to consumer confusion when confronted without a navigator.

However, the crucial fact for electricity suppliers is that 43 per cent of their customers, on the Galaxy numbers, now use the Internet to find information – up from 10 per cent a decade ago.

In this environment, the Origin Energy efforts to shake itself free from the cobwebs of the current web of energy argument are more than interesting.

As King said in his presentation, there is a lot of misinformation about energy supply across the board and to date the sector as a whole has displayed insufficient ability to challenge the community’s disconnection from the facts (a point that applies equally to the coal seam gas issue).

Needless to say, there is more than one way of approaching improved communications – and Origin is not alone in seeking to do so — but the company’s boss laid down a new marker for his peers this week when he said: “The role of a market leader is to ensure that consumers and the community are well-informed.”

That, I think, will ricochet around more than a few boardrooms.