What is wrong with these people?
We have state leaders from South Australia, New South Wales and Queensland purposely rejecting the low cost energy option of coal that nature has provided and opting for renewables that will always cost three times as much. And we have an apparent consensus of politicians in Victoria, New South Wales and Tasmania rejecting fracking, the technology that has rescued US energy supplies and proven itself harmless in spite of a million wells having been drilled.
Today Matt Canavan has raised the issue of new coal fired generators. That is such an obvious route that it is seldom suggested by politicians. We can have endless power at one third the cost of wind and with an ocean more reliability but we have demonised the product so much that it is difficult to see anyone investing without a government assurance against regulatory expropriation.
Tony Abbott has once again proved himself to be a superb leader when not actually in government by counselling the undeniable benefits of getting rid of the renewable subsidies that cost us $4 billion a year and wreck the competitiveness of the electricity supply while also undermining its reliability.
Unfortunately, Turnbull’s response has been to assemble a commission under the Chief scientist Alan Finkel whose preliminary report is predictably off the planet in proclaiming the future lies with renewables and consumers want these (as they do if governments force them to!)
In response to Abbott’s proposal both Canavan and Energy Minister Josh Frydenberg (presumably under political directives) are ruling out canning the subsidies to renewables on grounds that the subsidy is legislated. On such a basis we would never have dismantled the border tariffs that held back our living standards for 50 years. Having a bunch of rent seekers force through a subsidy and then say we cannot touch it for 15 years is a prescription for economic decline.
The latest patch up of the fall-out of this is a new series of subsidies to keep the Alcoa Portland aluminium smelter in operation. We are likely to see a repeat of the endless government support to keep car plants in business, support needed because we refused to allow market forces to tackle the elements that were making them uncompetitive: inflexible labour market arrangements and, of course, regulatory induced high energy costs.
Few of our politicians understand anything about energy costs and even fewer want to put in place policies that liberate the market, allowing Australia to have the cheapest energy in the world thereby regaining the status we had until 15 years ago. That’s because they are responding to the pressure from the elites in NGOs, the public service, business and academia. All of these have their separate reasons for wanting to foster high cost energy – reasons that range from the venal to the aspirations for political control of the economy.
Those same elites are heavily focussed on rescuing green energy in the Davos meeting now underway. We have politicians there but not at the Trump inauguration! At least Canada’s Trudeau recognised that going to the World Economic Forum in Davos on 20 January would be a mistake and chose instead to cancel his attendance and stay home.
Fortunately for Australia Trump will force us to mend our ways – his pull-out of the Paris climate change agreement undermines it and gives us an excuse to rescind the harmful energy policies we have in place. And his low tax, reduced spending, regulation cutting agenda will also force us to follow suit or plumb the depths of economic decline that other countries have experienced by focussing on anti-market policies.