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Standing Committee on the Environment and Energy
09/10/2019
Prerequisites for nuclear energy in Australia

ZELINSKY, Mr Misha, Assistant National Secretary, Australian Workers Union

[12:21]

CHAIR: I now welcome a representative of the Australian Workers Union to give evidence today. Although the committee does not require you to give evidence under oath, I should advise that this hearing is a legal proceeding of the parliament and therefore has the same standing as a proceeding of the House. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make some opening remarks, and then we'll go to a discussion.

Mr Zelinsky : I won't bore you with a long speech. We've made a detailed submission, which I will take as read. We come here today, I suppose, with a message from our members, which is that we'd like to see a debate on nuclear energy and energy more generally in this country that takes the emotion and ideology out of the debate. Part of our submission has said that at the moment we can't even have a proper debate about nuclear energy and what role it can play in Australia's energy mix, because it's currently effectively banned. Investment dollars can't flow to something that's banned, clearly.

We are not zealots about the role of nuclear energy, but we think that, when you look at the challenges that Australia has—and, from an AWU perspective, our members work in energy-intensive industries that are highly exposed and sensitive to massive increases in power prices, electricity prices and energy markets more generally, such as gas—we've seen huge price increases in every energy market in Australia. What that does is to put at risk heavy industry, and that puts our members' jobs at risk. So, from our point of view, we want to make sure that our members continue to have jobs, that those businesses continue to operate and that they make profits. Profitable businesses mean good paid jobs for our members. That's good for the economy and it's good for our members. So that's the sort of lens that we approach this from.

From an energy standpoint, we are agnostic about energy to the extent that we want to see the best mix for the Australian economy. Australia is uniquely placed among advanced economies in its energy mix in that it has zero nuclear in it. Every other advanced economy around the world has at least some. Some have more than others, obviously, and you'd be well versed in those details. But the fact is that we have outright banned a technology that has zero emissions, is cost competitive and can help us deal with the twin challenges of reducing our carbon emissions over time but also providing cheap and abundant energy to our energy-intensive parts of the economy. Where our members work, it's very important.

The other thing is that our member don't just exist in a bubble at work. They don't just care about the security of their jobs, although that's important. They don't just care about their wages, although those are important. They also come home and open their bills; they see their energy bills and their gas bills, and they see what's happening. So they're getting squeezed both ways.

Again, nuclear energy may or may not have a role to play in Australia. We think it could, and we think it should be a part of the conversation. Currently, we can't have a conversation. So, unfortunately, the conversation tends to emotional and ideological, and we think it should be pragmatic, scientific and based on the evidence. If you lift the ban, investment markets will make the decisions about whether or not they want to invest. There is no doubt that you need to give confidence to those markets, and there are important challenges within investment markets in the energy sector more generally, not just particularly in regard to nuclear, but we certainly think that Australia should remove its ban, because it's ideological. We're needlessly taking an option to deal with this challenge around energy and carbon emissions over time off the table. When you consider the fact that Australia is essentially the Saudi Arabia of uranium, in that we have nearly 40 per cent of the world's known supplies, that we wouldn't at least contemplate using that as part of our mix—it doesn't have to be everything but it could at least be part of our mix—seems nonsensical, and it is ideological and it is emotional, and our members expect us to act pragmatically in their interests, and that's why we're here today.

I'm happy to expand on any other issues related to our submission or I'm happy to further fill those issues in, but that's our position. Why we're here today and the capacity in which we come today is that we want to play a constructive role in this process. We think it's important to have a sensible, mature discussion about this, and we probably haven't ever had that discussion about nuclear energy in Australia, certainly not since the Cold War. The Cold War was a long time ago, so it's time that we actually had a sensible, rational and non-emotional discussion about what is a very important issue to our members, which is energy competitiveness. And it is very important issue to our economy more generally.

CHAIR: Thank you, Mr Zelinsky. Let me start by asking your opinion on how we have a dispassionately independent, unemotional, non-ideological discussion which relies on evidence and fact with respect to nuclear energy in Australia.

Mr Zelinsky : You could probably ask that question more generally about any political debate at the moment. If we can solve that one, we can solve all the debates. But I think the important thing is that we're at least having inquiries like this. There are other inquiries variously at the state level around the place. I know there was a round table at which we appeared several weeks ago. Our national secretary, Daniel Walton, appeared at that. The challenge is to at least get the facts on the table. If I were to give free advice, my opinion would be that the first thing to do is to take the ban off it. If something's banned, it appears illicit or illegal. This is something that's used all over the world. It's a relatively non-controversial part of energy inputs right across the developed world and the developing world. Advanced economies use it all the time. So I think a ban certainly sends a particular message to the community.

Then, again, it's about putting the facts out there and trusting Australians to be mature about it. I think Australians are up for the conversation. We could dial down the rhetoric around it on both sides and say, 'Well, is this an option for us?' I think we often jump to the solution quickly rather than say, 'Well, let's have the conversation of whether it's an option.' We're saying it could be an option. Every other country seems to be using it effectively; why aren't we? I know that seems like a curious question. I think a lot of Australians would agree with that and say, 'Well, that's interesting. We don't do that at all.' We've got a lot of uranium. Again, that's interesting. Could we be doing more with it? Is there a jobs argument for it? Is there an emissions argument for it? Is there an industry argument for it? Is there a household bills argument for it? And I think that, if you approach it with various different lenses, there's a way of having it. But, to convince people, you've got to at least have the conversation.

Things like this committee are useful, but, again—this is free advice to the committee, but we made this point in our submission—it was a little bit disappointing to us that the terms of reference essentially said it was going to remain banned irrespective of whatever the outcomes were of this committee. That's your prerogative, but I think a ban is a good starting point, and then look at the evidence around the world and build a case from there. But, from our point of view, our members aren't particularly interested where their power comes from; they're just interested in making sure that that power is competitively priced. And the management of industry are not just talking to me or to Dan, as the national secretary; they're talking to our delegates and members on the shop floor and saying that we've got a real challenge here. They're very interested in hearing about what the plan is to fix this challenge. We think nuclear should always be part of that conversation, and we would suggest that part of that conversation would at least be to lift the ban. It might not mean you end up with any nuclear power, but you're definitely not going to get any if it's banned.

CHAIR: Thank you, especially for the free advice!

Mr Zelinsky : I wouldn't charge you for it, because it's low quality, mate!

CHAIR: As a result of you saying all of that on Hansard, I hope we don't get an invoice from everybody else who has provided evidence to this committee.

Mrs PHILLIPS: I'm reading from an Illawarra Mercury article from 30 September, titled, '"We want the job": Wollongong unions demand action on climate change'. That article—and I think you were at that particular action—quoted the secretary of the South Coast Labour Council:

"We're here to say we not only back the demands for climate action, we want the job of doing it," he said.

"People may be surprised to know that this steel town is actually their pathway to helping save the planet. It may sound strange, but a renewable future depends on the things that we make here, within these so-called dirty industries.

"We are demanding that the Morrison Government take immediate action on climate policy to ensure our workers are not denied the opportunity to build the multi-billion dollar renewable technologies and systems required to transform Australia's energy landscape."

With that in mind, my question is this. The evidence of the Australian Energy Market Operator to this committee was that firmed renewables were well and truly the most cost effective form of new energy generation. Do you agree?

Mr Zelinsky : I'm not an expert in the energy market, so I won't dig into that evidence. But he did talk a bit about the rally in Wollongong, which I did attend. As I said, our members work in the steelworks in that area. I'm from Wollongong; I live in Wollongong, so I know that plant very well. My grandfather shovelled coal there when he first came from Russia post-World War II as a migrant, as a displaced person after the war, and my dad started his career there as an engineer. So it's a very important economic part of our community and of the overall economy. It's a crucial part. Again, our members don't care about where the energy comes from. They care that the energy is competitively priced and that the input is available and abundant and can fuel the plant.

What we've said is that there's going to be a mix of technologies going forward. Nuclear could very well be part of that mix. The particular event that we talked about there—there was a statement that went out, a communique, and part of the communique very clearly spelt out that part of our demand for action was that we needed to deal with the base-load challenge that is today impacting on jobs. We need to make sure that, in our transition to a cleaner economy, we don't needlessly lose jobs. We can achieve that if we all put our heads together. Part of that transition could very well be nuclear, which we know is cost competitive. We know that it effectively has zero emissions. So, if we're dealing with climate action, we'd be crazy to take off the table something that's abundant in energy, that's affordable in the energy that it produces and that doesn't produce firmed renewables—that one is better than the other. We don't have an order of preference other than: it needs to be cost-effective and do the jobs that we need it to do for our industry.

When you take the question of a steel plant—the challenge for a steel plant, the same as for an aluminium plant, is that you can't just switch it on and off. Intermittent energy is very painful for a continuous operating plant like a steel plant or an aluminium plant. You switch those things off and they're effectively buggered. They become useless assets; they seize up. So managing energy demand and having cost-effective energy are very important for that sector of the economy.

On the question of jobs, one of the things we talked about at that rally, specifically addressing the question of procurement, was: if we're going to build wind turbines in Australia—which we support; it's good to see—as part of the overall energy mix, we want to make sure that we're using Australian steel. Australian wind farms should be used built using steel made in Australia, in Port Kembla and Whyalla. They should be fabricated and built using Australian steel, Australian know-how and Australia labour. That was the position we were taking there—that we can have a virtual circle of government procurement.

In terms of overall energy inputs, again, the most important thing for our industries and our members is making sure that energy is cost-competitive. So you won't find an AWU member or official who has a particular view about a particular technology, but our position is that we want to see every option taken. On the question of cost, I don't know the specific point that the AEMO is discussing there, but, when you look at the fact that every other country in the world has some element of nuclear within its energy mix, we would say that at least it should be considered. There's a table that we include in our report that shows that nuclear energy is very cost-competitive when put up against other energy inputs, such as coal, gas-fired or renewables. Again, if the ban is lifted and the investment makes sense, and it's cost-competitive and it's carbon neutral and it can do the job, then it should be considered. If it doesn't, then it won't be used. That's the truth of it. But we shouldn't be taking that option off the table. We shouldn't be ideological about what our solution is. If we want to have action on climate change and we want to protect jobs in industry, then we're going to need to put all the options on the table. That was the message that we were communicating at that rally, but also that—and it's not the remit of this committee—we need to make sure that, when governments and major proponents build wind farms, they are using Australian steel, which is the point we were making there, rather than sending those jobs offshore to places where the energy is probably dirtier, the labour standards are not as good and, in the end, you end up with carbon leakage and sort of a net negative, which is not a good outcome for our members doing the jobs and not a good outcome for our economy and not a good outcome for the environment overall, which doesn't end at Australia's borders.

Mr PITT: Mr Zelinsky, firstly, the Australian Workers Union has taken a very mature position in being technology agnostic. You truly have. So I guess my question is to try to establish how many individuals or organisations you might represent. Do you have subsidiary unions which are part of the AWU? It's just not my area of expertise.

Mr Zelinsky : No, certainly. The Australian Workers Union is what you would call a general union, so we cover a lot of different industries. We are one union with a federated structure, so we have branches in each state and a national office that sits above that. But we don't have subsidiaries per se. We are one union and we represent a whole heap of industries. As I said, we represent a lot of the energy-exposed, emissions-intensive parts of the economy, such as steel, aluminium and manufacturing, but we also represent oil and gas workers. We represent salmon farmers. We represent healthcare workers in Queensland. So we are very general. It's steelworkers right through to salmon farmers and everything in between, so it's a very diverse and great union.

Mr PITT: So, rough and ready, how big is your membership?

Mr Zelinsky : Off the top of my head, our last number that we put in—the reason I'm being careful about this is that the last number we put in, 31 December, was 72,000, off the top of my head, and I don't think we've put our half-yearly number in.

Mr PITT: The reason for the question is: we'll get evidence after lunch from the ETU, which I'd suggest would be the polar opposite of the current submission. Given—I'm trying to think of the most polite way to put this—your relationship with some of our colleagues in the federal parliament, what do you think would be the view that's put to them? Do they hold similar views, do you think?

Mr Zelinsky : I don't want to speak for the ETU, but I think their comments are on the record.

Mr PITT: No, not in the ETU—in the parliament.

Mr Zelinsky : You mean—

Mr PITT: In the federal parliament?

Mr Zelinsky : I'll tell you this: The conversation I'm having here with you today is the exact conversation we would have with the Labor Party, behind closed doors or out in the open. Currently, the party's position is not to support nuclear energy—as I understand it, and I don't speak for the party. But from time to time you disagree with your friends.

Mr PITT: Some of us do it more regularly than others!

Mr Zelinsky : That's right! But our position is no secret. It's not that we've come out and sprung this position suddenly and it's a big surprise to everybody. Our support of nuclear energy is based on the fact that we cover members that mine uranium, and we think that bigger nuclear energy has vast potential, not just as an energy input for households and industry, which is sort of what we cover, but also as a sector of the economy all by itself. It has enormous export potential. From exploration through to extraction, through to enrichment for energy, through to storage, it's an entire industry that's high-tech, with well-paid jobs, and we think it's something worth contemplating. We've always supported it on that basis.

Why it has become more relevant today relates to the fact that we have the twin challenge of reducing carbon emissions over time and dealing with the energy crisis. We've got this technology that may or may not be part of the mix; it is certainly part of the mix of every other advanced economy around the world. Shouldn't we at least be looking at it? That's that message today. We would give that message to the Labor Party and to every political party. You should tone down the rhetoric around it and see what the facts are. Can we do it? Is it interesting?

Look at what other countries are doing, via government, with small modular reactors. It is interesting technology that has all sorts of potential applications. Again, if we've banned it here, we can't look at it. It's a very interesting, innovative, cutting-edge part of the energy sector that could very well provide all sorts of opportunities. Again, when we have 40 per cent of the world's uranium here, I struggle to understand why we would not at least be contemplating enriching it to (1) reduce our own emissions liability, (2) provide energy for ourselves, (3) potentially create a whole new industry and (4) potentially have tech associated with it.

Mr PITT: As far as the public debate is concerned, we've had evidence around a potential change of view among the younger generation. Where do you think your membership would sit, particularly those who may be young or entering the workforce early? In terms of the public debate, what is likely to be the AWU's contribution over the coming weeks and months?

Mr Zelinsky : I think we've already been out there with our position, which is that we should be considering this as an option. We are not zealots for nuclear energy, and we don't believe that nuclear energy by itself is the answer. Australia's energy mix going forward will be a mixture of things. We think one of those things should potentially be nuclear energy; we think that should be part of the solution. It is okay to be emotional about climate action, climate change and the environment. We certainly support action on climate change, but we are not supportive of being emotional about the solutions. Let's look at what the options are. Let's not be knee-jerk or ideological about it. Let's not rule things in and out. What does a sensible, doable, cost-effective, energy-efficient, emissions-reduced energy sector for Australia look like? Let's work towards that—and part of that should be nuclear energy. That's the contribution we will be making.

The climate change debate is not going to go away and nor is the energy crisis that we are in. We have been imploring government—and we work very closely with our employer representatives and members on this—to get some action on energy. We need action on a bipartisan or multipartisan basis to deal with this challenge. We've got to get energy prices down. We need a deal on our carbon emissions, we need a deal on our international obligations, but let's do it in a way that protects jobs, creates new jobs, secures the industry that we have and doesn't needlessly give industries away for ideological reasons.

Ms STEGGALL: You say it is important that we have a technology-agnostic debate and take the emotion out of it. But it's also important that we have proper facts before us, wouldn't you agree?

Mr Zelinsky : Yes.

Ms STEGGALL: The AWU report sets out a number of 'key facts', and I would suggest to you that they are demonstrably false. You say that the world is expanding its dependence on nuclear energy. The International Energy Agency has set out that over the next 30 years the nuclear capacity is actually going to contract. In fact, in most advanced economies the nuclear reactor fleet is on average 35 years old. Many reactors are reaching the end of their designed lifespan and, given their age, they are beginning to close. Some 25 per cent of the existing nuclear generation capacity in advanced economies is expected to shut down by 2025. So on what basis are you making the conclusion that the world is expanding its dependence on nuclear energy?

Mr Zelinsky : We have referenced our statistic there. I would invite all the committee to look at the statistics and make an assessment of which version you prefer. That comes from the World Nuclear Association and we just rely on that.

Ms STEGGALL: So you've ignored the International Energy Agency findings?

Mr Zelinsky : We have not ignored them. But we're not here to be champions for any particular part of the energy mix; we're here to take the emotion out of the conversation.

Ms STEGGALL: But the correctness of facts is important. You can't say that on the one hand but then ignore the facts you don't like.

Mr Zelinsky : Our facts are referenced. I haven't made those numbers up.

Ms STEGGALL: You also say that the cost of nuclear energy in Australia stacks up. A huge amount of evidence has been given to this inquiry that there is a huge question over all of those issues. So on what basis does that cost stack up?

Mr Zelinsky : When you look at all the different costs currently—and these are numbers that have been provided in various different reviews, including in the review done by Finkel—we place that number against other numbers and, particularly when you consider the option of small modular reactors and that technology, it appears that it could potentially be considered. As I said, our position is not that Australia must use nuclear technology. So I hope that's not the message you are receiving from us. Our position is that—

Ms STEGGALL: I'm going on the 'key facts' of your submission.

Mr Zelinsky : If you're right and I'm wrong, and there is absolutely no business case for nuclear energy whatsoever, it won't get done. So there is nothing to worry about. So I'm not really sure what we are arguing about. At the end of the day, if your proposition is that our union has put up a bunch of facts that are, as you interpret them, incorrect, then there is absolutely nothing to be concerned about in lifting the ban. But if nuclear energy is economically viable, other economies are using it and it can do the twin things that we would want it to do—provide abundant energy and reduce carbon emissions—I'm not entirely certain what the risk is.

Ms STEGGALL: The reality is that we need to make sure that submissions are not seeking to mislead the inquiry with false facts. It is important that we check the veracity of things that are being put forward in submissions.

Mr Zelinsky : All of our submissions and facts are referenced and we rely on those references.

Ms STEGGALL: As I've just pointed out to you, you've ignored a key International Energy Agency—

Mr Zelinsky : We haven't ignored it. We've made an assessment of the literature that is available, we have made an assessment on that basis, and we have submitted that for your consideration. Of course, those facts that you have cited are available to you to consider, and no doubt you'll make your assessment as part of the committee's deliberations.

Ms STEGGALL: In respect of the jobs that you say will come from it, that goes against the international trends. The department of resources figures show that demand for uranium out to 2021 will contract.

Mr Zelinsky : What's the question you are asking?

Ms STEGGALL: Is the demand for Australian uranium contracting?

Mr Zelinsky : Do I agree that demand for it is contracting? That is—

Mr ZIMMERMAN: That's relevant to the domestic nuclear industry, isn't it?

Mr Zelinsky : That's my point.

Ms STEGGALL: Mr Zelinksy is saying the nuclear fuel cycle could bring tens of thousands of jobs.

Mr Zelinsky : If we were using it in our own inputs, I would think that we would not necessarily need to export as much.

Ms STEGGALL: You say that the number of jobs in uranium mining is set to exceed 10,000 over the next decade. On what basis have you come to that conclusion?

Mr Zelinsky : There are new mines being opened in Western Australia.

Ms STEGGALL: Our own data is saying it is contracting to 2021. How can it be contracting when you are saying it is growing?

Mr Zelinsky : We have mines operating and we are going to have new mines. Unless there are going to be ghosts operating those mines, there will be people working in them.

Dr GILLESPIE: Thank you for your analysis and the AWU submission. At section 2.6 of your submission, you mention the death rates from energy and the risks. You have quoted some World Health Organization figures and remarks about Fukushima. Do you want to expand on that? Are you familiar with it? A lot of the philosophical objection to even the idea of talking about nuclear energy relates to people's fear, which seems to be out of proportion with the actual risks of well-regulated, well-used, well-managed nuclear material. The other thing that puts fear in people are the stories around Fukushima. Japan is a pretty modern place. But the actual outcome is different from what has actually been recorded—and I was really interested that the WHO made that comment. Do you want to expand on it?

Mr Zelinsky : From a safety standpoint our members work in potentially unsafe and hazardous workplaces all the time, particularly in parts of the mining sector and the oil and gas sector. Any part of the economy can be dangerous. From our point of view, we want safety to always be at a premium. So we regulate for that safety risk. Given that nuclear power plants operate all over the world, with very few incidents, we would say that, vis-a-vis other industries, it would appear to not represent a safety risk that can't be regulated for. It is true that high-profile incidents often create emotional reactions from people. But that can occur in any part of life; things can feel overrepresented in your own mind.

In terms of safety, nuclear energy doesn't appear to be any less safe than other parts of the economy. It is a question of regulatory risk. People often cite Chernobyl. I would back well-trained, highly-paid, highly-skilled Australians, using modern technology, against Soviet tech from the eighties. But I'll leave that for the committee to decide.

CHAIR: Thank you for attending today. If you have been asked to provide any additional information could you please forward it to the secretariat. The committee may have additional requests for your response on notice, which will be sent to you by the secretariat. You will be sent a copy of the transcript of your evidence and have an opportunity to request corrections to transcription errors.

Proceedings suspended from 12:52 to 13:32