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Transcript of interview with Peter van Onselen: Sky News Sunday Agenda: 5 February 2017: US/Australian relationship; new coal-fired power stations; renewable energy; the future of gas; same-sex marriage

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SUBJECT/S: US/Australian relationship, new coal-fired power stations, renewable energy, the future of gas, same-sex marriage.

PETER VAN ONSELEN: Joining me now is the Shadow Minister for Climate Change and Energy Mark Butler. Good morning Mark.


VAN ONSELEN: Who’s side is the opposition on? Donald Trump’s or Malcolm Turnbull?

BUTLER: Well I think we are on Team Australia’s side to use a hackneyed phrase of the former Prime Minister. I think we’re on Malcolm Turnbull’s side here. We want this deal to stick and I think Bill Shorten made it clear over the last 48 hours that our view as the alternative Government, as the Australian opposition, is given the depth and length of time this alliance has been in place with the Americans, we think that frankly, the US President should treat the Australian Prime Minister a little bit better than the way our Prime Minister has been treated over the last 96 hours.

PAUL KELLY: Given the way President Trump is carrying on, he’s clearly trying to bully the Australian Prime Minister and bully Australia. To what extent is Labor concerned about what is happening with the Trump Administration? And to what extent do you think we need to reconsider and reassess our position in terms of the alliance, is that simply a prudent thing to be doing at the moment?

BUTLER: Well Penny Wong has talked about this a number of times as our Shadow Foreign Affairs Spokesperson, both around the election, very shortly after the victory of

Donald Trump, and more recently. She has said a couple of things that I think reflects Labor’s position very well. That is the alliance is longstanding and endures beyond any particular administration and any particular President or Prime Minister. It has survived very substantial party political difference and often survived that very well. The Hawke/Reagan relationship was excellent, Howard and Clinton got on well, and a number of other administrations and governments in this country have been able to work through political differences. But I think we are potentially seeing something of a different scale with the new administration in the US and Penny’s point is we must recognise the importance of this alliance, both in an historical sense and also going forward, but within that alliance relationship be willing to stand up and talk about Australian interests and Australian values, forthrightly and frankly. And I think that is going to be under the microscope a little bit more over the next four years than perhaps it ever has before.

KELLY: Just changing to your shadow portfolio responsibilities. Bill Shorten didn’t say a lot about the 50 per cent renewable energy target when he was talking this week, and we’ve just had the Minister on suggesting that Labor is really walking away from that 50 per cent commitment. Is this true? What’s your response?

BUTLER: Well no, it’s not true. Our electricity policy, broadly our energy and climate policy was put in place about 12 months ago. Largely the framework was put in place at the 2015 National Conference and we have not shifted one iota from that. On the contrary, what you’ve seen from the Government over the last six weeks is a complete shambles in electricity policy.

Firstly in December, between Parliament rising and Christmas, we saw a shambles of consideration of an emissions intensity scheme, which had been recommended by every expert body and by everyone in the industry. Supported by all State Government, Labor and Liberal alike, it was shelved by the Prime Minister - overruling Josh Frydenberg simply because of some rumblings from Tony Abbott and others on the hard-right of the Liberal party. Then we’ve heard Josh over summer talk a lot about the importance of gas and with that we agree. On that point we agree very strongly with Josh Frydenberg but suddenly over the last week or 10 days after Tony Abbott penned an op-ed about new coal-fired power stations, suddenly this Government has shifted to the centrepiece of its energy policy being about building new coal when no-one in the industry, in the broader business community, no-one has talked about new coal for years. For very good reasons it is simply not realistic.

VAN ONSELEN: Mark Butler I want to get back into that discussion of cleaner coal but just back on the renewable energy target that Labor has for 2030 of 50 per cent that Paul asked you about; I guess to put it in another way, is Labor walking away or does Labor think it is less likely that that aspirational target would be met? In other words you keep the target but the reality of the push to actually achieving it becomes a different matter?

BUTLER: No we haven’t at all, and neither Bill Shorten nor I have walked away from that. We’ve got two things happening here, Peter and Paul. We’ve got first of all a very important debate we should be having about renewing a generation fleet that is starting to come to the end of its life. AGL tells us that three-quarters of the existing coal and

gas-fired generators in Australia are already operating beyond their design life. So right now we should be having a debate in Australia about what we build to power Australia over the next 3, 4, even 5 decades. At the same time as that we’ve got a debate about how we achieve the commitments we made not only to the rest of the world at the Paris Conference but importantly to future generations to start to get deep cuts in our carbon pollution levels. There is no more important sector in the economy for those cuts than the electricity sector. Those two debates really come together with a need to start to build zero-emissions electricity. Now we’re not going to do Nuclear power in Australia, so what that means for Australia is building substantial amounts of renewable energy between now and 2030.

The debate over the last week has confirmed that the cheapest form of new electricity build is renewable, it’s solar and it’s wind. Storage technology is starting to become much more affordable very quickly and so those two debates, what do we do to renew our infrastructure and how do we achieve our carbon pollution cut commitments come together with a substantial, ambitious commitment which we think is the right one for Australia over the next 15 years.

VAN ONSELEN: You say substantial and ambitious but can I just clarify if Labor wins the next election will it legislate a 50 per cent renewable energy goal by 2030? The same way that you have currently got the RET that is designed for the lower target by 2020?

BUTLER: I’ve said two things. One, if we were elected last year we would put in place a process with business and with the electricity industry about the best possible design of a mechanism to get to 50 per cent. I’ve got an open mind about that, the Energy Market Commission and the Climate Change Authority tell us the best way to do that is through an emissions intensity scheme which is also part of Labor’s policy. Other groups have different views about the best policy mechanism. All that I have said is that it is actually very unlikely that I would support an extension of the existing model. The retailer obligation model which is at the heart of the current legislation. It has served us reasonably well between 2009 and at least 2014 when Tony Abbott attacked it. That I don’t think is the model for the 2020’s. Around the world, the 173 nations that have renewable energy targets, you’re seeing nations, and states, and provinces, move away heavily from that model to models that really require a much lighter touch. That is because the costs have come down so much and are projected to come down so much more quickly over coming years, governments are finding they need a much lighter touch than perhaps the legislation you are talking about being in place right now Peter.

KELLY: Given that you’ve pointed out that three-quarters of the existing power generation is really out of date, out of design. The question is what replaces it. Can I assume that first of all under a Labor Government that there would be no new coal-fired power stations commissioned? Secondly, what would be the role of gas under Labor?

BUTLER: Well we think that gas has a very important role. The Energy Council, which is the body that represents the large thermal generators (so the coal and gas-fired generators) said this week that really the future build for Australian electricity will be a mix of renewables, storage, and gas. With that I think we broadly agree.

Gas will suit the future electricity system for a couple of reasons. First, it is able to be switched on and off very fast so it is able to complement renewable energy much more than coal which can only be switched on over a matter of several hours. Also because of the capital vs fuel balance in the investment, gas is much more suitable as an investment to a high renewables electricity sector. So I think that broadly speaking there is a level of consensus around that.

The other problem with coal is essentially a carbon pollution problem. Josh was talking about clean-coal being these ultra-supercritical plants, but even at best these ultra-supercritical plants are still twice as heavily polluting as a new gas plant. We are simply not going to get anywhere near meeting our Paris Commitments if we are going to invest in that sort of plan. That is really why banks and electricity companies across the country are all saying this is all completely unrealistic and uninvestable.

I do want to go back to this question of clean-coal though because people have talked about clean-coal for many years. But not in the way in which Tony Abbott and Malcolm Turnbull have started to do so in the last week. Clean-coal used to mean carbon capture and storage, which meant collecting the pollution and storing it under ground so that generally that power station didn’t emit pollution at any significant level. That’s not what they’re talking about here. They’re now talking about power stations that are slightly cleaner than the traditional coal-fired power stations, but still, as I said according to Bloomberg, twice as polluting as a new gas-fired power station. The irony is Labor put in very substantial investment dollars to try and test whether carbon capture and storage was a viable alternative for Australia - and all of those funds, $470 million of those funds, was cut by the Abbott Government when it came into power in 2014. So we’re not going to be lectured by this Government on whether or not we had a commitment to exploring whether or not there were viable coal-fired alternatives for the future of Australian electricity. We put our money where our mouth was and we allowed research, we allowed development in this area - and all of that money was cut by Tony Abbott.

KELLY: Is Labor therefore prepared to have this full on political battle with the Turnbull Government over coal?

BUTLER: I think it remains to be seen whether this will last beyond a week. There is no-one in the electricity industry or the business and finance sector that have said that the debate that really Tony Abbott started a couple of weeks ago, has any realism attached to it.

Nobody was talking about new coal for years in this country until Tony Abbott penned an op-ed a couple of weeks ago shooting a couple of shots across Malcolm Turnbull’s bow about renewable energy, about medicare, about schools funding and a range of other things and pushing him to consider coal-fired power. And lo and behold it ends up in Malcolm Turnbull’s press club speech. A surprise to everyone. I’m not sure there was any engagement with the industry given their reaction -

KELLY: Mark Butler we’ve just had the Minister on this morning saying the Government is serious about this. That’s what he is saying. So is Labor willing to have this political battle with the Government over coal?

BUTLER: We will have a debate about electricity policy. We’ve been trying to have that debate for a long time. We thought we were debating an emission intensity scheme in December. There was a glimmer of hope for bipartisan support between the Government and the Opposition around a mechanism that had the support of all of the industry, of all State Governments (Liberal and Labor alike), the CSIRO, the Climate Change Authority, the Energy Markets Commission, the Chief Scientist and probably a whole range of other people that I have forgotten. And yet Malcolm Turnbull overrode his own Minister because of an objection from Tony Abbott.

We’re up for a serious debate about electricity policy, we need some bipartisanship here, but throwing this idea of new coal-fired power when the electricity industry, the finance sector, really every expert body says this is just uninvestable and will be the most expensive option (other than nuclear power), the most expensive option for households and businesses. This thing is not going to get off the ground.

KELLY: If we could just talk on gas again given the bullish comments you made about gas a few moments ago. What’s Labor going to do about the moratoriums, the gas exploration moratoriums in various dimensions which are existing in various states?

BUTLER: I agree with a lot of what Josh said about the gas market. In eastern Australia, it is in a very difficult state at the moment. We more than tripled the demand for gas from that market by developing the LNG operations in Gladstone, Queensland, and we are now not getting enough supply of gas to fill the new demand levels that are more than triple what they traditionally were. That has seen prices spike very substantially. I think gas prices were probably between $2 to $4 per gigajoule when Josh’s Government came into power. The last time I looked two days ago on the AEMO website they were over $10 a gigajoule in every market. That puts very significant pressure on industries that use gas as a feedstock, but also on power plants that use gas.

In my home state of South Australia, really the volatility around wholesale power prices that you’ve seen over the last few months, every expert says is driven by the price of gas. It’s not driven by the renewable energy investment you’ve seen over many, many years. It’s driven by the price of gas spiking over the last several months.

We do have to have a mature debate here but over the last three/three and a half years that this Government’s been in power they’ve done nothing about gas development in this country -except to inject more uncertainty and more opposition at a local community level about gas development. What they’ve tried to do is take away the ability of farmers groups and community groups to object and to take action in courts about the development of gas in their areas - and they’ve tried to remove environmental protections at a federal level for gas development. What that has done is further undermine already very shaky community views about gas development at a time when really we should be having a much more mature conversation if we want to continue to

have the sort of industry that requires gas as a feedstock and, certainly from my point of view, seeing gas as a very important part of the mix in electricity generation for many years to come.

How are we going to get enough gas to satisfy all of those needs with an export market that was built up over the last decade or so in Gladstone? I think that’s a conversation we want to be a part of, but it would be nice for the Government to come to the table rather than picking fights with farmers groups and picking fights with community groups that have concerns about the impact of unconventional gas and fracking on their water resources in particular.

KELLY: You’ve said Labor wants a conversation, Labor wants a debate about this but what’s Labor going to do about the moratoriums?

BUTLER: Well Labor’s in Opposition at the moment. We’ve said we’d play a significant role in sitting around the table. But what you have got to do is give communities confidence that there are proper safety mechanisms in place to consider these developments. Now all you’ve seen from this Government is trying to strip back those protections. We’ve said that those protections must remain in place. Farmers groups and communities that are concerned about gas developments in their communities should be able to have those concerns considered and assessed by independent bodies and properly evaluated. We’ve got to get back to building community confidence around this because over the last few years, community confidence particularly in some parts of Australia - Northern New South Wales, the Liverpool plains - really has reached terrible lows. This has become a real problem. I know Josh likes to pick on the Victorian Labor Government, but this is a particular problem for the New South Wales Liberal Government. The South Australian Liberal leader Stephen Marshall who is heading into an election early next year has also come out with a moratorium policy in a state that’s always been a pretty strong developer of gas resources. This is an issue that is crossing party lines and it really needs a dedicated piece of work, hopefully on a bipartisan basis, to start to build some community confidence around this because it really has been smashed by Tony Abbott’s hard-right approach to environmental protection.

VAN ONSELEN: Is this also perhaps whether we are critical of the Labor or the Coalition at a federal level, or indeed at a state level, this is another example of a policy where federal/state relations is a problem?

BUTLER: I think the challenge in the gas area is that there are so many different dynamics going on. At one level the ‘Lock the Gate’ campaigns that bring together often very conservative national party constituencies with city-based environmentalists is about access to land - that has always been a state issue and I don’t think that will ever change. As I think Josh pointed out there is also a big difference between Australia and the United States in that our State Governments own all the resources under the surface of the land so there is not a lot that farmers gain from gas developments in their area. But then from a Commonwealth point of view we have a very direct interest in protecting the water resources - and that, as I travel around the country, is probably the thing that people are most concerned about around fracking. They are most concerned about

stories that this will impact their water resources and the water resources of the community more broadly.

That’s why when we were in Government we put in place some mechanisms to have that independently assessed by an independent expert scientific committee and to have Commonwealth oversight over whether any development could proceed given the impact that it might have on the water resources. Really since Tony Abbott came to power all you’ve seen under this Federal Government is them try to strip away those protections that were put in place by Labor with the cooperation of people like Tony Windsor and Rob Oakeshott with the aim of bolstering and boosting community confidence around this emerging industry.

VAN ONSELEN: So is it your view that coal seam gas exploration and mining needs more support and needs to be able to go ahead? I understand that you want all of the safeguards but the simple fact is that if you want clean energy and if we want energy security this is an important area isn’t it? I mean someone needs to bring the parties together here to come to some sort of consensus solution otherwise energy security which is the way this debate seems to be shifting now in some respects rather than purely being a debate about clean vs dirty energy; energy security is becoming more of a paramount issue isn’t it?

BUTLER: I think the unshakeable principle for Labor is you can’t force things on communities and I think that has been the problem particularly in parts of New South Wales that’s been the problem with gas development over the last several years which has really shaken confidence. So you’ve got to proceed down this path in a way that has community confidence. But there is no question from my point of view and Labor’s point of view that gas is an important feedstock for industry and will be for many more years to come. And it's an important part of the transition of Australia’s electricity sector as we renew that infrastructure that I was talking about. Gas will be a very important complement for renewable energy for many years to come and we’ve got to find a way that reconciles the supply arrangements of gas in Australia with the new demand arrangements that follow the developments of those huge export operations that are operating out of Gladstone. Now I think that is going to require very careful management because the last three years of Tony Abbott picking fights with farmers groups and with environmentalists have seen those community confidence levels in parts of Australia really plummet to very low levels. In some of the communities that I visit, this issue is their most important issue, and in some areas I think it will be very hard to retrieve any sense of community consent to development in those regions and we will have to probably explore other options.

VAN ONSELEN: Just a quick final one Mark Butler what about shifting the model of coal seam gas to something akin to what happens in the United States?

BUTLER: Well that’s a very big debate and I’ve seen it drop out as another sort of thought bubble from the Prime Minister over the last week - I mean we’re just getting swamped by thought bubbles from the Prime Minister at the moment in energy policy. That is a fundamental change to the way Government and private land ownership has been in place here for many, many years. It is not a Commonwealth issue, it is a state

issue, and I wonder whether in the same way that I don’t think Malcolm Turnbull talked to the electricity industry before he dropped out this issue of new coal, I wonder if Malcolm Turnbull has spoken to any of his Premier colleagues about changing very long-standing understandings about land ownership. I do say though we do have to have a debate and we do have to put these things on the table but it should be done in a measured way not through thought bubbles like the Prime Minister's latest one.

VAN ONSELEN: The other issue just finally, in my final line of questioning to Josh Frydenberg he said that he thinks Labor may well buckle on the whole same-sex marriage opposition to a free vote because otherwise you won’t see it legislated in this term of Parliament. Any sign that you have seen in Labor ranks of a change of heart in 2017 on the idea of allowing a free vote in the community rather than in the Parliament on the issue of same-sex marriage?

BUTLER: Not a single sign. Bill Shorten in particular, but the Labor party team more broadly, went out and talked to the community, talked to groups at the centre of this debate, LGBTI groups - and the overwhelming response particularly form those groups is that they do not support a community plebiscite, they want a free vote in the Parliament. That is Labor’s unshakeable position

VAN ONSELEN: Mark Butler we appreciate you joining us on the program. Thanks very much for your company.

BUTLER: Thanks very much.