Wednesday 13 May 2020

Coronavirus economic recovery committee looks set to push Australia towards gas-fired future.

Analysis

Emissions are seen from a factory at Broadwater in far northern New South Wales.
The National COVID-19 Coordination Commission is a hand-picked panel of business leaders and trusted bureaucrats charged with facilitating the "fastest recovery possible".(AAP: Dave Hunt)
There's a battle of ideas over how to reinvigorate the economy after the shock of COVID-19, but the make-up of the advisory body the Federal Government has set up to lead the recovery gives a good indication of which way it's leaning.
Amid calls for new investment in clean energy to cut greenhouse gas emissions and revive the economy, the Government's given the task of leading the recovery to a committee that's overweight with business leaders from fossil fuel industries, and gas in particular.
The National COVID-19 Coordination Commission — a hand-picked panel of business leaders and trusted bureaucrats charged with facilitating the "fastest recovery possible" — is headed by Nev Power, the former CEO of iron ore miner Fortescue Metals.Former Fortescue Metals Group chief executive Nev Power with Fortescue background, 2011
Former Fortescue Metals Group chief executive Nev Power is on the Government's advisory body overseeing the COVID-19 economic recovery.(ABC News)
Mr Power is now a director and major shareholder of oil and gas company, Strike Energy.
When asked on ABC TV's The Business about a push by some business leaders to boost growth while cutting carbon emissions, renewable energy didn't feature in his response.
Key to kick-starting the economy and manufacturing, he argued, was cheap energy — and the best cheap energy was gas," Mr Power said.
"We have the opportunity to increase the supply of gas, bring the price down to competitive price levels where they are around the world and to put those manufacturing businesses in place."
This echoes comments from Energy Minister Angus Taylor, who believes Australia should have a "gas-fired recovery".
It's one of several interviews Mr Power has given since his appointment where he has talked up the role that cheap east coast gas can play in driving a manufacturing renaissance.

No conflicts of interest, according to Nev Power

When asked if this presented any conflict of interest given his role at the commission and his focus on energy, Mr Power said he supported all types of energy.
He described Strike as "an emerging player in the gas market in Western Australia".
However, company documents show Strike has substantial exploration permits in the South Australian corner of the Cooper Basin, which forms part of the east coast gas network.
Mr Power has also publicly supported the increased manufacture of gas-dependent petrochemicals, fertilisers and agrichemicals.
And he's backed the development of an ammonia plant in the NSW town of Narrabri, put forward by West Australian businessman Vikas Rambal, that could kickstart Santos's contentious Narrabri Gas Project.
One of Mr Power's early acts was to bring into the commission as a special adviser Andrew Liveris, former global chairman and CEO of The Dow Chemical Company.
Mr Liveris is deputy chairman of Worley, the world's biggest engineering consultancy for the oil and gas industry, and also a director of the world's biggest oil and gas company, Saudi Aramco, which is looking at gas development in Australia.
Mr Liveris — who advised both the Obama and Trump administrations on building up US manufacturing — is pushing the idea that a big lift in gas production is key to revitalising heavy industry.
US President-elect Donald Trump and Dow Chemical Company chairman Andrew Liveris
Andrew Liveris — who advised both the Obama and Trump administrations on building up US manufacturing — has been brought in as a special adviser.(AP: Andrew Harnik)
The recovery commission's ties to oil and gas do not end there.
The National COVID-19 Coordination Commission also features Catherine Tanna, managing director of Energy Australia, whose biography boasts of her "long career in Australia and internationally in the resources and energy industry".
Ms Tanna led the $25 billion Queensland Curtis LNG project in Gladstone for BG Group — a giant and controversial gas export hub — and she has also held senior executive roles with Shell Gas & Power and BHP Petroleum.
Then there's former Labor minister and ACTU secretary Greg Combet.
He's not an opponent of clean energy. As climate change minister, Mr Combet oversaw the implementation of the Gillard government's carbon price and is a strong advocate of action on global warming.
But Mr Combet has also consulted in the past to the gas giants Santos and AGL.
None of this necessarily means that the commission will be of one mind on the best energy mix and the role of gas versus renewables.
Climate Change Minister Greg Combet speaks during the plenary session of the COP16 United Nations Climate Change conference
As climate change minister, Mr Combet oversaw the implementation of the Gillard government's carbon price.(Ronaldo Schemidt: AFP)

Cutting emissions to zero by 2050 still a challenge

The CEO of the Australian Industry Group, Innes Willox, is also on the advisory body tasked with facilitating the recovery.
His lobby group, representing more than 60,000 mostly manufacturing and heavy-industry firms, has argued that economic recovery from the virus and cutting emissions to zero by 2050 are Australia's two greatest challenges and should be tackled together.
But the make-up of the commission is causing concern for some business leaders and activist groups advocating Australia take stronger action to reduce emissions, promote clean energy and address global warming.
Advocacy group 350 Australia, which wants to rapidly reduce fossil fuel use to bring down atmospheric greenhouse gas levels, is today releasing a report raising concerns that close to half the members of National COVID-19 Coordinating Commission (NCCC) have ties to the fossil fuel industry.
It argues there is "a concerning lack of transparency and accountability of the NCCC, including how potential conflicts of interests are being managed".
The fact that a group of unelected people has been given such enormous influence over the direction of the economy and the recovery is also causing concern.Line chart showing Australia's current Covid-19 growth factor of 1.06 as of May 8, 2020
And business leaders and analysts ABC News has spoken to are sceptical about the vision of a gas-led recovery that Mr Power is pushing, arguing gas projects will take years to bring on and a collapse in gas prices makes new developments less likely.
Outside the commission, some are advocating a very different vision of how to lead the recovery — and pushing back against the fossil-fuel advocacy.
Martijn Wilder, the chairman of the Australian Renewable Energy Agency and founding partner of the climate change advisory and investment firm Pollination, appeared on The Business the day after Mr Power.
He said he would be very worried if in the rush to increase energy supply and boost activity emissions weren't considered.
"This is a phenomenal opportunity to address two issues at once, decarbonise the economy — and that is a long-term gain — but also to do it in a way that creates a large amount of jobs, turns Australia into an energy superpower and uses that energy to boost manufacturing," he told the program.
"We need to build an economy that is robust in the long term, and not [be] investing in assets that might seem good today, but in a year's time, they are stranded assets."
It's too early to say for certain which vision will ultimately win out.
But there's an old saying in politics: Never commission a report, or establish a committee, without knowing what it's going to conclude.
And there is little doubt which "vision" has been given the inside running.

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