The action is getting hotter on the energy front. Having been in a small minority for years, readers and writers on catallaxy are now finding themselves closer to the mainstream on the policy on energy/climate.
To recap, the recent initial incendiaries were thrown by backbencher Craig Kelly in forming the Monash Forum and calling for the abandonment of the renewable energy subsidy policy which is destroying the competitive fibre of the economy. Unnerved by the whole process Mr Turnbull then moved once again to gently suggest to AGL that it might defer the next planned power station closure (Liddell in 2022).
I covered the developments here and Judith covered them here in a critical article about the market regulator Audrey Zibelman that brought Ms Zibelman to castigate the AFR for alleged misrepresentation (not that this caused the AFR to pause in its rooting for renewables and claiming AEMO as a cohort).
AGL rejected Mr Turnbull’s legendary persuasiveness. It now claims precedence over the government as the nation’s social arbiter, saying the closure must go ahead since Australia must reduce its greenhouse gas emissions. Some part of this is a rationalisation for the huge profits AGL earns from closing down capacity and boosting prices – the firm earns 80 per cent of its profits from the coal that it demonises.
The momentum is continuing. Following the 30th Newspoll, Tony Abbott’s pollie-pedal charity ride passed by the Hazelwood plant, the closure of which, stemming from government policies, has forced a near doubling of wholesale electricity prices. Mr Abbott first suggested that we ought to be tougher on AGL then argued for a forced acquisition. Discovering his inner liberalism, the PM dismissed this as alien to the free market capitalism he said he espouses.
The forces are arraigned. Some on our side take the Turnbull line and, overlooking the history, call for policies involving termination of subsidies and suspension of the Paris Agreement on which, via the National Energy Guarantee, the next round of subsidies to renewables is to be based.
Others, including Terry McCrann point out that Liddell has assumed the position of being an essential service and the Constitution (in fact every government constitution) would allow for the acquisition of such a facility. As he points out this must be on “just terms” but, as AGL values the facility at virtually nothing, those terms should be set low and the government could then dispose of Liddell to one the interested parties (three groups have already emerged).
The ALP is having a ball hoisting the Coalition on its free market petard. But they are likely to be in office come 2022, and if by then they recognise that the plant’s closure would bring increased prices and lower reliability, they would not hesitate in taking it over.
Power prices stemming from governmental sabotage of the electricity industry are now the hot button issue. They, or their corollary, climate change ideology, brought down Malcolm Turnbull from the Liberal Party leadership in2009. Abbott as PM, aside from abolishing Gillard’s carbon tax was unable to do anything to mitigate the renewable policy’s erosion of electricity competitiveness but now says he would act differently.
Turnbull could change policy and abandon the renewable policy and the Paris Treaty he ratified the day after Trump, its avowed enemy, won the US Presidency. But his judgement is so poor, as evidenced many times (refusing to drop climate policy of 2009, Grech, Don Dale, 2016 ratification of Paris, Snowy2), that he is incapable of doing so.
The alternatives outcomes are therefore that
- the Coalition slouches to the next election with Turnbull and present policies and loses to a Shorten Government so radical on energy, spending union power that will perhaps push us towards the Venezuela outcome
- the coalition under Turnbull actually wins the next election and we continue the gradual decline that is the inevitable outcome of following Labor-lite policies
- a leader (Abbott, Dutton or some other conservative) takes over, suspends the Paris Agreement, removes all tariffs, encourages new coal based power station construction as well as pursuing other deregulatory, expenditure reducing measures. Then Australia becomes what it should already be: the most prosperous country on earth.
Does the electorate and political leadership have the capacity to allow the third development?