Interview - ABC News Breakfast

Michael Rowland
Minister Bowen discusses the Energy Ministers' meeting and the energy market

MICHAEL ROWLAND: Okay, let's get more now on yesterday's emergency talks of state and Federal Energy Ministers. The group emerged from their two-hour meeting yesterday with key points of action but also a warning. Sadly, there were no short term fixes available.  

The Federal Energy Minister Chris Bowen joins us now from Sydney. Minister, good morning to you.  

CHRIS BOWEN: Thanks, Michael, good morning.  

MICHAEL ROWLAND: So, in practical terms, what does this mean for all of those Australians over a barrel at the moment facing higher gas and electricity prices, what was in the meeting for them?  

CHRIS BOWEN: Well, we did agree to about 11 points, some of those are immediate and some of them are much longer term. I think most Australians would understand you don't turn around nine years of neglect and poor planning in one meeting. But we did make very big and important steps forward.  

Ministers from around the country, Labor, Liberal and Green, all three parties represented at the table, and there was a very constructive atmosphere. We made it clear we want to work together. So, yeah, we made immediate decisions like giving AEMO power, the market operator, to be able to supply gas and keep it in store for situations like last week so we're not on the phone to gas companies, so that AEMO has some in store. And we made longer term decisions like a properly integrated national plan to transition to renewables and to have investments across the board, not only in electricity transmission but in all the necessary infrastructure. That was really important. That's not immediate but it's really important going forward.  

We made other decisions as well about capacity mechanisms to ensure we have some back up for difficult times. So, it was a really good meeting, steps forward but no easy fixes.  

MICHAEL ROWLAND: A lot of focus on that capacity mechanism, which in shorthand is where energy retailers would pay energy providers to ensure there weren't any shortfalls in supply. Fast tracking a plan to achieve that, how quickly might that happen?  

CHRIS BOWEN: Well, we want it to happen at pace. I said I want it to happen at pace and ministers agreed.  It was originally scheduled for 2025, we'll work much more quickly than that.  We've instructed the Energy Security Board to come out with the next draft urgently.  That work is very well advanced they've told me and that will be out in the next couple of days.  

We have said we want it to support new investments in renewable and storage, so that's important. That'll be an important thing going forward. The ESB, I want the experts to write it and I want the experts to put out the next draft, but we have said we want that to happen as quickly as possible.  I'll back the experts in getting that done.  

MICHAEL ROWLAND: What about the prospect of a domestic gas reserve for the east coast following what the Western Australian Government has done so successfully over in the west?

CHRIS BOWEN: Well, we did discuss gas policy and the ADGSM, which is the technical term for the current trigger of course, but the main thing we focussed on yesterday is the areas of joint responsibility, that's what I wanted to do, talk about the areas that we're both responsible for, Commonwealth and state. Of course, the ADGSM is entirely a Commonwealth responsibility.  As I said elsewhere it's a pretty blunt instrument at the moment. It wouldn't help in today's current crisis, wouldn't even come into force until 1 January even if Madeleine King, the relevant Minister who's responsible for the trigger, pulled it today. 

So, we did discuss gas and gas reservations but of course that's entirely a matter for the Commonwealth, and yesterday we focused on matters of joint responsibility.  

MICHAEL ROWLAND: So, we've got Australians paying higher and higher electricity and gas prices, at the same time we're seeing these gas companies, these gas giants earning mega bucks through selling their gas to Europeans, Europeans paying over the odds for Australian gas. Why won't the Government consider a windfall tax for these gas giants?  

CHRIS BOWEN: Well look, as I've said, you can't just take international precedents and apply them to Australia. We have different circumstances and Jim Chalmers has made it clear that's not something we're actively going to pursue.  

But I make this point, Michael: the points you make are fair enough about ensuring domestic gas access. I agree with those points. I agree that we've got to have access to gas and that's why Madeleine King and I have both been talking to gas companies all week, et cetera. But at its heart, this is an important point and I think there's been some misunderstandings about it, understandably, at its heart this crisis has been led by coal fire power outages, by our ageing coal fire fleet having outages, by floods in coal mines. It hasn't been a crisis caused by gas shortages. Gas plays a role in fixing it and our pipeline from the north to the south has been full at various points and we're getting as much gas into the system as we can, so it hasn't primarily been a gas led crisis. It's been a crisis brought about by a whole lot of circumstances but probably foremost amongst them is coal fire power station outage, the fleet’s very old, and we've had floods in coal mines.  

You know, when you're very reliant on one particular form of energy, like we have been traditionally in Australia on coal firepower, you are very exposed and that's my point about nine years of lack of planning about the transition that has to be under way. And I'm very pleased yesterday, Michael, that state and territory Ministers agreed with me to develop a national plan for the transition. We already have the ISP which is just about electricity generation – I want to take that and super charge it and make it about all the infrastructure we need, about the transition to renewables and unanimously state and territory Ministers agreed that we'll do that together.  

MICHAEL ROWLAND: But certainly, back to the fact that these gas companies are making lots of money. In fact, Kerry Schott, the former chairwoman of the Energy Security Board, had described the earnings of the gas companies as them earning a ‘motza’. Yesterday, the independent MP Allegra Spender said that gas companies earning these huge profits while Australians were suffering simply, in her view, did not pass the pub test. What do you think about that?  

CHRIS BOWEN: Well look, as I said there's a social licence for gas companies and gas companies need to do the right thing by Australian domestic consumers, both industrial and domestic.  I've made that point to them in my conversations with them    

MICHAEL ROWLAND: But are they in your view?  

CHRIS BOWEN: Well, they have responded to the Government's requirements to put more gas into the system. You know, that happened last week. The gas pipeline from Queensland to the southeast coast was full. I know others in the political debate said, "Oh, the Government should be getting more gas into the system", and I'm not sure how they wanted to get it into the system when the pipeline was full, maybe by telepathy. I mean it just showed a great degree of naïveté.  

When we called the gas companies they responded. The gas supply guarantee was triggered last Tuesday night. That happened. It worked. We got more gas into the system.  But, you know, to the point about social licence and gas companies needing to respond, yes, they absolutely need to. They absolutely should and they need to be cognisant of their domestic responsibilities and they have responded when the Government has required them to do so.

MICHAEL ROWLAND: Chris Bowen, appreciate your time this morning, thank you.