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Interview with FiveAA Mornings

8 December 2016

Leon Byner

Subject: Jay Weatherill; energy security and prices in South Australia; manufacturing jobs



Let's talk to the Federal Industry Minister Greg Hunt. Greg, thanks for joining us today.

GREG HUNT:         

And good morning, Leon.

LEON BYNER:       

What's your reaction to this?

GREG HUNT:         

I think that the South Australian Premier is in absolute denial.

They can't keep the lights on, they're driving up power prices, and Jay Weatherill's solution to skyrocketing power prices is driving them up even further.

Forget all of the sort of sophistry and the smoke and the mirrors.

What is he actualy saying? He says I want higher cost electricity, I want more high cost electricity, less low cost electricity, and it'll all be okay.

It's not. Manufacturing in South Australia is struggling. Services are struggling, (a) in terms of reliability, and (b) in terms of cost. You see the story today of the Alma Hotel in Norwood?

LEON BYNER:       


GREG HUNT:         

That's the story that irrigators are facing with the cost of running their irrigation pumps. It's the story of grocers and small businesses that are trying to keep the refrigerators on.

And firstly, you've got to have the continuous power. Secondly, you have to be able to afford it, and so I'd say to Jay Weatherill, stop talking through your hat.

Be honest. They have lost control of energy security and prices in South Australia, and driving power prices up more is the last thing that South Australian families and businesses need.

LEON BYNER:       

Now, I spoke recently to Frontier Economics' Danny Price on this show, and he said that certain models of carbon trading do not increase retail or wholesale prices.

Would you be looking at something like that? And if you're not, what is it the Feds can do to facilitate base load gas power investment in SA?

GREG HUNT:         

So right now, and that's what we're focusing on, on increasing the availability of gas, and that's about New South Wales, Victoria, and South Australia facilitating natural gas.

And natural gas is exactly what people use for their cooking, for their hot water, for just the basics in their own home.

Everybody who is connected uses natural gas and uses it happily because it's so reliable and it's such an effective form of energy in the home.

LEON BYNER:       

But Greg, you would understand that the latest news on that is that we could be facing gas shortages.

GREG HUNT:         

Correct, which is why this week on Monday Matt Canavan, who's the Resources Minister, and myself pulled in four of the major gas firms in Australia, and we said, so what do you need in order to provide more supply?

And they said just the ability to access what's in the ground. There are enormous volumes of resources in New South Wales, Victoria, and South Australia.

LEON BYNER:       

Are you talking fracking?

GREG HUNT:         

It doesn't have to be at all. No. I mean, there are enormous volumes of conventional gas, which means it's in big wells, and then there are huge volumes of what's called unconventional gas, which means it's mixed through things such as sandstone.

But you don't have to use fracking for conventional, and there are enormous volumes that are still available in what's called unconventional, or where it's like in a honeycomb situation, without using fracking.

So all of these bans and moratoria are just other ways of making families pay more, and in particular, manufacturing which uses gas not just for heating but as an input into plastics, into chemicals, into so many different forms of production is really struggling to get it.

So common sense here is more gas, lower electricity prices, not less gas and driving up the price of electricity.

That's just simple, basic, common sense which seems to have gone out the door with some mad ideological nonsense. Just errant nonsense.

LEON BYNER:       

So in no way then, I just want to clarify this, from your point of view, the Federal Government will not consider any form of carbon pricing, carbon trading, anything. Is that what you're telling us?

GREG HUNT:         

Correct. I stood next to the Prime Minister yesterday in the Sydney Fish Markets at about 9am, and that was exactly what he said, except more emphatically. So he couldn't be clearer.

And so at state and at federal level, we are the movement, the party, the Government of lower electricity prices and whether that's Bill Shorten or Jay Weatherill, their goal is to close down power stations, as we've seen, and drive up electricity prices, as we've seen.

That is something that's completely at odds with the needs of South Australians and the needs of Australians.

LEON BYNER:       

So if Jay Weatherill was to say sorry, I don't buy anything you're saying, Minister, I'm going to go it alone, what then?

GREG HUNT:         

Well, unfortunately he said that South Australia was a grand international experiment.

It is a grand international experiment for his sort of higher-priced, less reliable energy policies, and it's everybody who is paying their bill, who's trying to run a grocery, who's trying to run a fish shop or a fruiterer, who's paying that price.

That experiment has failed. Now he wants to double down, but the people who pick up the bill are families, small business owners, and manufacturers.

And I think he'll get tossed out of office if he tries that.

LEON BYNER:       

Alright. The question though is when. I mean, you've talked about you've had gas executives in your office with other ministers. And you've asked them what they need.

The need for us is immediate, isn't it?

GREG HUNT:         

It is. It is. So obviously there are a couple of things that're happening. One thing where we are working hand in glove, all politics aside, is on Arrium and Whyalla.

Tom Koutsantonis and myself and the unions have been working together. At least one of the proposals involves more gas there, which would be a fabulous investment and outcome in terms of Whyalla.

That's the POSCO proposal. The administrators will make their decision on who is the buyer.   

Secondly, it is very possible to start quickly on exploration if conventional gas, even just conventional gas, is allowed to be considered in Victoria.

I think something that Jay Weatherill could do is to ask his Victorian counterpart to remove the ridiculous ban on exploiting conventional gas in Victoria.

Because in the South West, so in what's called the Otway Basin, very near to South Australia, very near to opportunities to get this gas to South Australia, are enormous resources.

Natural gas, clean fuel, dramatically lower emissions than coal, available, and would be of incredible benefit to the Alcoa plant in Portland, but also to South Australia.

And I'd be happy to work with Jay Weatherill. If he wants to say to the Victorian Government look, this ban on conventional gas, conventional natural gas, the very thing that we use in our homes and our businesses is just ridiculous.

So common sense is the way forward. More suppliers of gas, taking the pressure off electricity prices is the other thing we’ve got to do.

LEON BYNER:       

There's only one other point. We have more gas. But remember this, it's still not viable under the current way the rules work in this so-called national grid that when there is other energy working, and then suddenly it fails, which happens, and that's purely just nature, that's the way nature is, we at the moment, when you talk about gas, it's not viable for them.

So not only do you have to make more gas available, that's one thing. But it's got to be viable to use. So what are you going to do about that?

GREG HUNT:         

That is a fair point, and that's exactly the thing that the Energy Minister Josh Frydenberg has gone at like a bull at a gate, and we've got all of the states working on that transformation right now, with, sadly, the exception of Victoria.

They've actually not even agreed to be part of that sort of once in a generation transformation on what's called the gas transfer rules, but the supply, the rules, and then above all, common sense on don't make families pay more for electricity.

They're the [inaudible] should be doing.


Greg, thank you for joining us. That's the Federal Industry Minister giving his view on the way forward.