Coalition Ahead in Victoria, Where is Turnbull’s Energy Policy

Victorian Polling

Today’s Herald Sun reports that, on a Galaxy poll of 815 people, the Victorian Coalition headed by Matthew Guy has suddenly jumped ahead of Labor with a “primary” vote of 41/33 compared with 36.5/38 in November 2014. On this basis, they would be 53/47 on a TPP basis compared with 49/51 in February. Daniel Andrews is still the preferred Premier but more say they are dissatisfied (47) than are satisfied (38).

The fact that the Victorian Coalition is 53/47 on a TPP basis while the Federal Coalition is 47/53 will doubtless be noticed. Mathew Guy has benefited from Andrews poor handling of threats from terrorists and of the administration of  the judicial system, particularly on parole and bail matters. But Turnbull has failed to handle Shorten on a range of matters. In short, this another reason why the Federal Liberal Party should replace Turnbull asap.

Energy Policy

I concluded yesterday’s Commentary by saying that Turnbull’s press conference late in the day indicated that “the Turnbull government doesn’t have a clue about what to do about energy (climate) policy – but ‘everything is on the table’”. Today’s media reporting confirms that.

We now have numerous reports of various possible parts of what might be imagined as a policy and the numerous queries that they raise. Following are some examples of possible parts and queries.

  • To help reduce the upwards pressure on energy prices, Turnbull has announced the government will legislate to have the power to reduce exports and make more gas available locally. But even if this legislation is passed (Shorten will like the government intervention), the new arrangements will not start until January 2018. Turnbull has given no indication of how much of the (?expected) gas exports will be stopped  or how that will be decided. Gas is only one source of energy in the market and it would also be difficult to determine how to calculate the desired reduction in domestic gas prices. One report suggests “Asian” gas prices will be looked at. But will gas companies be forced to sell domestically the amount they would have sold overseas or would they be allowed to hang on to that gas? Leaving aside the adverse effects on international contracts (will the would-have-been buyers sue on default of contract?), the policy may require the government to regulate the gas industry in detail, almost to the point of nationalising it;
  • Turnbull says he is “open” to allowing the use of coal which is “clean”, but does that mean the HELE coal which uses new burning technology and is used in some overseas countries or does it mean the emissions of coal which are buried underground (the so-called Carbon Capture and Storage or CCS system)? HELE coal still emits about half of normal coal and is more expensive as is CCS (much more). Why would clean coal only be used when existing generators cease to operate? Why not use normal coal? One report quotes Turnbull as saying that as a large exporter of coal “it would be good if we had a state-of-the-art, clean-coal power station in Australia”? But why? It would also be “good” having a state of the art normal coal fired generator.
  • The Clean Energy Target (CET) proposed by Finkel has not been endorsed by the Party Room and (reportedly) is yet to be approved by Cabinet. There is no indication of what might happen to the renewable target (now set at 23.5% for 2023 but until that is confirmed or otherwise, the upward influences on electricity prices will continue. Writing in today’s Australian, Graham Lloyd says correctly that “rewriting the rules on renewable energy subsidies is the first step” and that “existing measures … are unsustainable” because they have the capacity to “wreck system reliability and raise prices” (see Market Forces for Energy?).

The reality is that, whatever comes out of the existing discussions within the Coalition, Turnbull is supporting a greatly expanded intervention by government in the energy market and, through that, more detailed control over the factors influencing climate. One report mentions that Turnbull stated “we believe in this market , there needs to be stronger involvement from government, stronger leadership”. But he omitted to mention “this market” is the one he has created. As I have pointed out, this involvement is not required by threats to temperature levels and, is amongst other related government interventions as well, totally unnecessary. But Turnbull’s leftish inclinations mean that he will continue to try to establish a wrecking scheme that will suit his inclinations.     

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