Scott Morrison’s energy deal with NSW, announced this morning, is a huge win for fossil fuel company Santos, a major political donor with extensive ties to the Coalition.
Morrison’s deal with Gladys Berejiklian’s Coalition government will provide $960 million in funding, mostly through loans, for renewable energy projects and grid infrastructure in exchange for “commitments from the NSW Government to facilitate investment opportunities to inject an additional 70 petajoules of gas per year into the east coast market” and “an undertaking from the NSW Government to remove barriers to coal supply to the Mount Piper Power Station”.
At the National Press Club on Wednesday, Morrison argued expanding natural gas supply for power generation represented “climate action now”, that “we need to get the gas from under our feet” and that “there is no credible energy transition plan for an economy like Australia in particular, that does not involve the greater use of gas as an important transition fuel”.
That statement is clearly, and easily shown to be, false.
As Giles Parkinson explained at RenewEconomy, the Australian Energy Market Operator itself has shown that there is no need for gas to play an increased role as Australia moves toward a higher level of renewable energy sources and under several scenarios, including the “step change” scenario in which Australia moves rapidly to significantly curb emissions, gas plays a declining not increasing role.
As Bruce Robertson of Institute for Energy Economics & Financial Analysis noted, gas has been declining as a power source due to its high cost, despite a massive expansion in available gas. There is no currently committed investment in gas-powered generation.
Despite Morrison’s claims that Australia is a world leader in renewable energy investment, renewables investment collapsed in 2019 as a result of federal government inaction on climate policy and regulatory uncertainty.
Despite the reputation of gas as a “transition fuel” because it has lower emissions intensity than coal, the gas distribution and storage process — especially the cooling required for LNG — produces significant greenhouse emissions in its own right, in some cases sufficient to rival coal-fired power. Coal seam gas projects also require colossal amounts of water.
The energy deal announcement incurred the wrath of farmers potentially affected by coal seam gas projects like Santos’ Narrabri gas project, which is awaiting approval by the NSW government. As a number of observers and commentators noted, the 70 petajoule level announced by Morrison is the amount Narrabri is expected to produce.
The Lock The Gate Alliance called the deal a “betrayal from the Commonwealth and NSW governments”. Greenpeace also pointed out that the Mount Piper coal-fired plant generates toxins such as mercury and sulphur dioxide at far higher per unit levels than permitted in China or the EU.
Santos is a major political donor: in 2017-18 it handed over $95,000 to Coalition branches and slightly less to ALP branches around the country, with particular generosity aimed at the Queensland LNP and ALP. Queensland is home to its Gladstone LNG facility.
The company has handed nearly $2.5 million in donations to both sides of politics in the last 20 years, not including figures for 2018-19, which are not released until Monday. Santos also has extensive political connections with the Coalition and, to a lesser extent, the ALP.
Under the guise of supporting renewable energy projects, the government will in effect bribe NSW to hand companies like Santos licences to increase emissions by significantly expanding gas.
Santos shares immediately spiked nearly 2% when the ASX opened this morning — understandably given the coming windfall. Thank you taxpayers.
Back when AGL was working towards CSG production at Gloucester NSW one of their arguments was that in NSW we faced a shortfall in supply of gas for domestic and commercial use. Am I right that this still applies in 2020? Absolutely I don’t want CSG operations in my backyard but absolutely I could live with a wind farm across my rural hills. So more money for renewables, bravo! but where will the gas for my stove and hot water come from? Our society could transition to electric appliances and hot water, and I hope that renewables in the future could supply much of domestic and industry’s energy needs. But there’s a lot of momentum in The Way We Are and as green as we might wish to be we are stuck with high fossil fuel usage for at least a couple of decades. Aren’t we?? So wouldn’t it be nice if Scott and Gladys could say the words “We are transitioning”, while adding “but in the short-to-medium term, like the rest of the world, we have to fuel ourselves through that transition”. And then they might add “Climate action is our responsibility. It has nothing to do with political sides. We need everyone on side.” They might even say it’s either gas or nuclear that will transition us and gas is a whole lot less worse…. I appreciate the drive of this article and I’m driving with it. I just wish our major-party politicians could drive along this same path, place themselves in The Big Picture, and speak frankly about the challenges it imposes on us all.
Its not true, & never was. The only reason NSW “lacks” gas supplies is because (a) they let the corporate thugs export it-dirt cheap-to Asian Markets (thanks, Howard) & (b) they have made zero effort to tap into the potentially lucrative Bio-gas market.
The reason they don’t speak like that is simply because they are not here to serve larger community, they are not in a Big Picture that is open to all. They privatised much of the power network, setting it up for a tardy and mercenary response when new technology must be introduced globally and nationally. Look at how much gas they have let be taken, how quickly, and how narrowly the benefits have been shared. Sure, I wish they’d take what seem like obvious opportunities to build unity in genuine ways….but that’s not them. Divide, manipulate, dither, divert in the service of big money, who want consumers, not community. And their life is beneath a shadow cast by Murdoch patrolling his political and financial territory, cramping their freedom to change..
And can I add….
Giles Ferguson’s urgings towards renewables+storage versus gas power is immensely appealing. No political donations coming from that area, however…. May it happen anyway and gas demand plummet.
Add this to the $1198 per capita in funded taxpayer subsidies to mining.
Almost $100 per week for a family of four in taxes to subsidise multi-billion dollar corporations with billion dollar profits
Once again I’m astounded at the imputed return on investment of political donations. The only thing more surprising is that there isn’t an even bigger deluge of “donations”. There’s probably a spreadsheet program calculating diminishing returns to explain it.
This is just a grubby political maneuver to promote high recovery cost gas we don’t need and is actively opposed by locals. There’s no gas shortage and all these so called domestic problems were foolishly and foreseeable created by allowing unfettered LNG exports without firm requirements for that gas to come from new wells.
Gas reservation would easily fix the mess but at the cost of contract fulfillment problems for the three Qld exporters. Bad luck. All business involves risk and for the past ten years the risk has played out as exorbitant domestic prices exacerbated by opaque cartel like actions.
I see no likelihood that this government will act in the public interest and the ALP don’t seem to want to know either.
However at least the nuclear spruikers will use another opportunity to flog their dead horse.
Agreed!!!!
I’m not sure it’s always about donations so much as “access”, “boys’ clubs”, conservative networks and just general ideologies. We are all guilty of spending our time in our own polarised realms but we need more from our politicians. We pay them nice big salaries and ridiculously generous pensions. In return they should be escaping their comfort zones. I am tired of seeing Australia adopt second class technologies (eg. Public transport ticketing systems) when the best technologies are adopted in Asia and Europe. They need to stop giving jobs to their friends and act with impartiality as they are employed to do.
Barnaby has interests in CSG in Narrabri yes?
Yes.