Interview with Patricia Karvelas, ABC Radio National Breakfast

Patricia Karvelas
Gas supply, coal fired electricity, energy supply

PATRICIA KARVELAS: Resources Minister Madeleine King has been hitting the phone to the gas companies and she joins me now. Madeleine King, welcome.

MADELEINE KING: Good morning, Patricia.

PATRICIA KARVELAS: And, of course, congratulations on your appointment too. Obviously, that’s a big deal. This is the first time we’ve spoken to you. But you’ve had to hit the ground running. You’ve been urging the chief executives of Australia’s biggest gas producers to get more supply into the domestic market and push down prices. Have they given you any commitment?

MADELEINE KING: All the gas producers that I’ve spoken to, and there’s been many of them, have been very constructive in the discussions we’ve had. They are all doing their level best to both maximise production but also release supply into the market. And you will have seen recent announcements by Santos and Beach Energy and also Shell about how that is happening. There are other constraints within the market. It’s very difficult to get more gas from the Queensland gas producers simply because the pipeline south is at capacity and as yet there are no import terminals ready to go on the east coast that would enable other gas suppliers to get to that market. So, in the very short term, what we really need to do is to have the coal power stations come back online because that is the missing piece in the puzzle now. There’s been unplanned outages for many reasons, many beyond the control of those operators, and I do accept that, but I hope they are doing their level best to make sure this power source comes online as well.

PATRICIA KARVELAS: Okay. When you say coal back online, what efforts is your government making to try to get those coal operators to get back at full capacity?

MADELEINE KING: Well, as you know, Minister Bowen is meeting with Energy Ministers from around the states. I’ve been speaking with the Minerals Council of Australia. The operators know this is what they have to do, so I’m confident they are doing it. But some of these are planned outages as well which everyone was aware of. It’s the unplanned outages which are due to loss of maintenance during COVID issues over the past couple of years that’s led to this. I’ve said before, and as many others have observed, this is a perfect storm, all these things coming at us at the same time. And without the underlying security of supply from renewables and gas, we have seen how much reliance there, in fact, is in the east coast on those coal‑fired power stations that are ageing. And because of the lack of energy policy, there hasn’t been enough investment into those coal‑fired power stations to keep them going onwards as we transition to a new decarbonised energy system.

PATRICIA KARVELAS: Well, Labor has been pushing for decarbonisation. Is Labor prepared to use public money to try to ensure that those coal‑fired stations are able to get back online? Is that on the cards?

MADELEINE KING: Labor has a clean energy policy, one that we spoke about before the election that we will be implementing. What this country has witnessed is the former Government’s 23 failed or non‑existent energy policies leading to the situation where there was no clear signal to either the renewables part of the energy mix or also the coal part of the energy mix to have the adequate investment. For renewables, that means there’s been a lack of strong investment in battery storage and so forth and also a failure to upgrade the current power system. So, the signals we will put in place by implementing our policies will make sure that happens, but it is really critical to observe that that is not going to be a solution to the immediate problem facing the manufacturers of Victoria and New South Wales or the ordinary consumers.

PATRICIA KARVELAS: You’re saying coal is the short‑term answer, and is the Government prepared to invest in it to actually deliver the power that is clearly desperately needed right now?

MADELEINE KING: To be honest, it is the coal companies themselves and the operators of the power stations that need to get these power stations back online. It’s 30 per cent of the energy capacity is taken out of the mix because of unforeseen circumstances in many respects, and some of them were already planned outages – 

PATRICIA KARVELAS: But is the Government planning to help them?

MADELEINE KING: Excuse me, Patricia. It wouldn’t matter how much money anyone put in right now. We just need the operators to get moving on fixing their plants right now.

PATRICIA KARVELAS: Okay. And if they’re not prepared to fix their plants right now, what will the Government do?

MADELEINE KING: Well, all indicators are they are, and they’re working at it right now, I’ll let them do that work, just like we’re letting the AEMO regulations take their course in relation to the gas supply, which is currently doing its level best to back up that lack of coal supply.

PATRICIA KARVELAS: And if they do need Government assistance, is Labor prepared to step in?

MADELEINE KING: Well, Labor is going to let them do their work and urge them to do it as quickly and as safely as possible so we can get this power back online to feed the southern states of Victoria and New South Wales.

PATRICIA KARVELAS: Nationals Leader David Littleproud on the weekend said that the former Energy Minister Angus Taylor, who is now the shadow Treasury spokesperson, would have been able to pick up the phone and force gas companies to give Australians more gas because of relationships. What’s your response to that and would he have been more effective right now than you?

MADELEINE KING: Yeah, that’s really nice of David Littleproud to demean me in that fashion, but, I guess, that’s what the old-style Nationals are all about in respect of women and women in power. I was actually quite offended by it. I was – I’ve had relationships with gas companies and iron ore companies in the resources portfolio for a number of years and I have many friends in the industry, as well as many other industries for that matter. So, I was able to pick up the phone and have these discussions and perhaps I don’t take the strong‑arm approach of Angus Young – Angus Taylor, sorry. I’d rather prefer to ask these people, these leaders in our economy, how they can help, and I must say each and every one of them has been very constructive and we’ve seen the results where those companies I named earlier have released supply and are doing their best. They’ve also taken the time to explain to me the constraints in the system, as I said, through the north to south pipeline is, you know, also an issue. There is not much more Queensland gas companies can do to put more gas into a pipeline that is full. So, if Angus and David want to make stuff up, they can go right ahead, but it’s really ridiculous.

PATRICIA KARVELAS: In your home state of Western Australia, producers are forced to reserve 15 per cent of their available LNG for domestic use. The cost has barely shifted there. Should we have that system nation‑wide? I know it’s more of a long‑term solution but is it one that Labor is currently exploring?

MADELEINE KING: It’s very important to realise that the gas reservation policy of Western Australia was a very great political struggle to introduce. It was very hard on the then State Labor Government and a lot of people lost a lot of political skin in that fight. It was also part of the design of the export industry, so it came in at the same time and was also part of the investment decisions of international investors into the WA gas production system. So, everything came at once in a well-planned manner. So, that kind of system is very hard now to reverse‑engineer now on the east coast. Because the Gladstone LNG and east coast export market was developed without that in place, investment decisions were made without that restriction. We’ve had a bit of a clawing back of it through the Domestic Gas Security Mechanism. So, I think all these things are on the table and we must look at them, absolutely, and I agree with the sentiments of my friend Dan Walton, but it is a much more complex matter to try to bring in a gas reservation policy after the fact.

PATRICIA KARVELAS: Look, there’s no doubt that it would obviously be a long‑term solution but it would provide some kind of solution into the future. Yes, political skin – you know, it clearly would be a political potential fight, but is it one that you might be prepared to have because you want to resolve this in the longer term?

MADELEINE KING: I think, yeah, given what we’re witnessing in the current circumstances, I wouldn’t rule anything out, but I do want to make very clear how important these exports from the east coast are to our neighbours in the region. So, whilst it’s very important that Australia has energy security, it is equally important that our near neighbours, our regional neighbours that we sell this gas to, such as Japan and South Korea, also have energy security. So, we must bear that in mind and bear in mind sovereign risk and issues of long‑term contracts and international investment into that – into those facilities in Gladstone. So, yeah, I’m agreeing with you. It is very complex. Nothing is off the table. But it is a challenge and a challenge we’ve been left with because of the failure of energy policy in this country over the last nine years.

PATRICIA KARVELAS: Is the Federal Government still considering whether it pulls the so‑called gas trigger, forcing exporters to divert more supply to the domestic market even though I know it would only apply from January 1 next year; there’s a consultation process, it’s not a quick thing, but is it still worth exploring?

MADELEINE KING: As I said before, Patricia, everything remains on the table. We will explore it. It comes up for review – it has to be renewed as a matter of law. It is about to end, that gas trigger. So, we will be looking to see how we keep that going, well, the ability to use it to keep it going, and also explore whether it will, in fact, help in relation to the future provision of gas into the local market. But I reiterate what I have said before: the export side of this is also very important, like, this is an industry where the investment – it only exists because of international investment that was there for those exports. So, we have to be very mindful of the whole story.

PATRICIA KARVELAS: Minister, it’s been a pleasure to have you on the show and I look forward to many interviews in the future. Thank you so much.

MADELEINE KING: Thank you, Patricia. I look forward to it as well.