Interview with Chris Smith, 2GB
13 April 2021
Subject: AEMO, gas supply, manufacturing, Narrabri gas project, emissions targets, coal exports
CHRIS SMITH: Energy Minister Angus Taylor is accused of pressuring experts who questioned his gas-fired recovery plan. According to Four Corners, Mr Taylor was given advance copy of a report to be published by the Australian Energy Market Operator. That report did not support the Government's position that gas is the best way to replace coal-fired power plants, which will close in the next 15 years. The ABC says Angus Taylor then called the boss of the Australian Energy Market Operator and pressured her to change the report's conclusions but he says he was just trying to understand the modelling, which was at odds with other reports he'd received. The Federal Energy Minister joins me right now. Angus Taylor, welcome to the program.
ANGUS TAYLOR: Thanks for having me, Chris.
CHRIS SMITH: That's okay. Did you put pressure on the energy market operator to change their position on gas?
ANGUS TAYLOR: I do what it's my job to do, Chris, which is to make sure the work is done by agencies in the energy sector is right. We've seen AEMO in particular, dramatically under forecast the amount of gas that's needed in the system, many times lower in their forecast historically than we've actually used. I've made that point as part of a consultation process. We have these reports given to us for consultation, and we provide feedback. That's my job. And the voters of Australia expect me to do my job properly, and that's exactly what I did.
CHRIS SMITH: But the report was unfavourable to gas. They're not idiots in that group, are they?
ANGUS TAYLOR: Well, they've made mistakes in their forecasting in the past which have been very significant. They've under-forecast the amount of gas needed in the system by many times in the past.
CHRIS SMITH: Why? Why?
ANGUS TAYLOR: Well, that's a good question. That's a question for them, Chris, not for me. It's a question I asked and it's a very good question you do ask. That's exactly the question I've asked, is why are the gas assumptions you've got here in these reports, why are they as they are? And you see other significant forecasting errors, too. We've seen household solar completely underestimated by AEMO over a significant period of time. So I've been asking those questions. They're very reasonable questions to ask, they're the right ones. It's my job to do it. And the important broader point here that I was going to say a moment ago, is that we need gas in our system for 850,000 people working in manufacturing in this country. To cook our food, to heat our homes, to keep our electricity prices down. It's absolutely essential in the system. As is coal, Chris. As are the renewables coming into the system. We need that balance in the system. It's important that we do everything we can to get more of that supply into the system to drive prices down, to keep the lights on. It's my job, to make sure that we do everything we can to ensure that's the case.
CHRIS SMITH: Okay. So if you allocate or create an environment where the system has more gas than we actually need - and I'm trying to work out the he said she said here - does that mean that there's a higher chance that we pay lower prices for that gas?
ANGUS TAYLOR: Exactly right. That's the point. More supply in the system then drives down prices, provides opportunities in manufacturing, brings down the price of electricity, and brings down emissions, Chris.
CHRIS SMITH: Yes.
ANGUS TAYLOR: This is the ironic thing about gas is that a lot of the anti-gas activists say, well, it's important to get rid of gas because of the emissions. Well, frankly, more gas in our system right now will bring down emissions-
CHRIS SMITH: But they're absolutist, Angus. They're absolutist. They don't want a single emission, you see?
ANGUS TAYLOR: This is the point. What we've got is these activists who are acting against the interests of Australia, against the interests of Australian manufacturing, against the interests of Australian small businesses and households. And frankly, right now, we've got to be pragmatic about this. We've got to do the right thing for Australians, and that's exactly what we fight for every day. We'll ask the right questions of agencies who provide input in the decision-making of government. That's our job to do that, and I'll continue to do that every day.
CHRIS SMITH: The New South Wales Energy Minister, Matt Kean, is not a fan of gas. He says if you're interested in driving down electricity prices, then you'd be mad to use gas.
ANGUS TAYLOR: Well, this is extraordinary, really, isn't it? Because the New South Wales Government committed to get 70 petajoules of gas into the system with us as part of a deal with the Federal Government. They've now approved the Narrabri gas project. We're working with them now on closing the gap as Liddell closes with some gas generation. So, I guess they're going to have to clarify their position in the coming days and weeks. But our position is what we agreed with them, which is that we need more gas in the system and we need it fast. We need to keep our coal in the system for as long as we reasonably can. Coal is going to play a huge role in our system for many years to come, but getting the balance right is the key.
CHRIS SMITH: If Matt Kean is to be believed, and he is actually serious when he says you'd be mad to use gas, he's going to shut down Narrabri, is he?
ANGUS TAYLOR: Well, I don't think that's going to happen. I think the New South Wales Government, they've already approved Narrabri, but that's a question for him.
CHRIS SMITH: But he doesn't like gas, so he's got to shut it down. You can't have it both ways.
ANGUS TAYLOR: As I say, that's a question for him, Chris.
CHRIS SMITH: Alright.
ANGUS TAYLOR: But we've done a deal with the New South Wales Government, which is about getting more gas into the system, avoiding premature closure of our coal-fired power stations, getting the balance right.
CHRIS SMITH: Yes.
ANGUS TAYLOR: We'll continue to honour our side of that deal and we expect New South Wales to do exactly the same.
CHRIS SMITH: The Australian newspaper reports today that the Prime Minister is warming to the idea of a net zero emissions target by 2050. Is that where we're heading?
ANGUS TAYLOR: Well, we've already said we want to get to net zero. It was an agreement we came to as part of the Paris Agreement when Tony Abbott was prime minister that we were seeking to get to a global outcome of net zero. But I tell you what we're not going to do. We're not going to impose taxes. We're not going to raise the price of energy and electricity in this country. We're not going to tell people what sort of car they're going to drive. And we're going to do this in a sensible, pragmatic way. We've got one in four Australians now with solar on their roofs. Good on them for doing it. We've got to get the balance right in our system. That's how we'll get emissions down in sensible, pragmatic ways that Australians understand, which are consistent with bringing down energy costs and strengthening our economy.
CHRIS SMITH: Now, the Upper Hunter has a by-election next month. I had a chat with Barnaby Joyce about this a short time ago. Will it be a referendum on coal, do you think, Angus?
ANGUS TAYLOR: Coal is obviously an enormously important issue and industry and job creator in that part of the world.
CHRIS SMITH: Yes.
ANGUS TAYLOR: The biggest coal producing electorate in New South Wales, one of the biggest in Australia alongside a number of Queensland regions. Coal is important and coal will continue to be important. Look, Newcastle is the biggest coal exporting port in the world, Chris. In the world. And you know what? That coal is cleaner than the alternative coal that is used in places like China.
CHRIS SMITH: Correct.
ANGUS TAYLOR: They mine it domestically. This is much cleaner.
CHRIS SMITH: Yes.
ANGUS TAYLOR: Newcastle is also a major energy hub and it needs coal for that energy. It is an important issue. And we are absolutely committed to the jobs in the Hunter, dependent on that low cost energy and that supply of energy to the world.
CHRIS SMITH: I appreciate your time this morning. Thank you very much.
ANGUS TAYLOR: Good on you, Chris. Thanks for having me.