Interview with Jim Wilson, 2GB
16 February 2021
Subject: Gas prices and supply, and Australia's energy mix
JIM WILSON: Great news for households this afternoon, your gas bills are getting cheaper. A new report from the ACCC shows gas prices fell from $8 to $10 a gigajoule in 2019, to $6 to $7 in 2020. But it comes with a warning. We could see gas shortages on the east coast of Australia as soon as 2024. On the line is Federal Energy Minister, Angus Taylor. Minister, welcome back to Drive.
ANGUS TAYLOR: Thanks for having me, Jim.
JIM WILSON: Thanks for your time as always. Great news gas prices have fallen. Welcome relief for the hip pocket.
ANGUS TAYLOR: Yeah it is good news. We've seen reductions as much as 50 per cent in some major users over the last 12 months and that's particularly for industry and electricity generators, and that's flowing through to electricity prices as well. We need to make sure that's passed through to final consumers. And I strongly encourage people listening out there who haven't yet seen it passed through into their bills, get on the phone and shop around because there are good deals around now for both electricity and gas. We do have more challenges coming out a few years on supply, which is why projects like Narrabri are so important. We've got to get more supply into the market Jim, to make sure we continue that downward pressure on prices. And as I say, the Narrabri project is a good example of what we need to do there. And we need to continue to put pressure on prices and we're doing that through a number of means to make sure consumers get the benefits they deserve from these reductions we're seeing.
JIM WILSON: Okay. Well, just talking about pricing. I mean, the report also found international markets are often getting lower gas prices than us here in Australia. Why is that, Minister?
ANGUS TAYLOR: Well, we've seen a big improvement in this. It was a long way out a few years back. Now it's a small amount. And, actually, during the course of last year, it disappeared for a period, which is good news. But we want to see Australians getting fair pricing and we want Australian gas working for Australians. So we're talking to the gas producers now. We've asked them to go into an industry code of conduct to make sure that Australians are getting fair pricing. We're expecting that by the end of the month. And you know, as I say, the situation has improved dramatically but we do want to see internationally competitive pricing for all Australians.
JIM WILSON: Okay. The ACCC has also said the east coast of Australia will face a gas shortage in the next few years unless decisive action is taken to bring forward new projects over the next two years. They're concerned not enough action has been taken since last year's report. Has that been the case?
ANGUS TAYLOR: Well, we have seen good progress in New South Wales. The Narrabri project being approved is very, very good news. And, you know, without that, there'd be a severe shortage coming in New South Wales. We also know there needs to be extra investment in pipeline infrastructure to move gas around between where the new supply is coming out and will come out, and where the customers are. That'll mean additional transport or pipelines from the north to the south. We've got a lot of new gas coming online in Queensland and we need to be able to move that around the country, so we're working on that now. So this is a real focus for the government. We've made progress, but there's further work to do.
JIM WILSON: Chris Bowen is the new shadow climate change and energy spokesperson. I had a chat to him last week on the programme, he said your government is letting people down by pretending nothing's happening with the future of coal. He said 70 per cent of our coal exports are going to countries that have already committed to net zero emissions by 2050. He reckons you guys aren't looking at the future of jobs in the coal sector. What do you say to that?
ANGUS TAYLOR: Well, I just think he's wrong. I mean, he's given up on the coal sector. Most of Labor has given up on the coal sector, Jim, and I think this is extremely upsetting for those working in the coal industry, including in my electorate. Right across Australia, we see coal is playing an enormously important role. I mean it is fundamental the steel making process, to countries like Japan and Korea and China, of course, consuming a great deal of coal. I mean, the gas industry, of course, is playing an important role as well and we need to make sure that industry is successful. It's helping to bring down emissions around the world, let's be clear about that. So, you know, the thing about Labor is they've just given up on these industries. They want to see them shut. We will back in our coal workers and gas workers and others, you know, for many years to come.
JIM WILSON: What's the future of their jobs as far as the resources industry is concerned?
ANGUS TAYLOR: You've got to remember that most of the coal we produce in this country is exported and the demand for that has gone up, not down. Now, you know, if we shut down our coal industry tomorrow, as I'm sure Chris Bowen and others would like to see, that supply would simply be taken by places like Indonesia or China mining its own, extracting its own coal. And we'd have achieved absolutely nothing for reducing emissions. So, you know, this is the point we make is that Australian exports are cleaner than most of the alternatives coming from other countries. It's good for the world that they're the ones that are being used, and we're not going to sacrifice Australian jobs for no outcomes or for an end point that's of no benefit to the world.
JIM WILSON: Okay. Okay. Let's talk about this push towards renewables, which is gaining momentum around the world. US President Joe Biden has re-joined the Paris agreement. UK Prime Minister Boris Johnson is putting pressure on your government when it comes to climate change. How is the government going to handle this?
ANGUS TAYLOR: We are going to act in Australia's interest. I mean, at the end of the day, we've got to do our bit globally and we are doing a bit. We're more than doing our bit. I mean, we've got the highest uptake of household solar in the world, Jim. One in four houses. Many of your listeners out there will have solar on their roofs. You advertise it regularly on 2GB. I mean, we are leading the world on this. We're doing an enormous amount. But we're not going to sacrifice Australian jobs unnecessarily, whether it's in agriculture and mining or elsewhere. And we're certainly not going to drive up the price of electricity or the price of energy against the interests of Australians. So, we'll act in Australia's interests. Now, we'll work with our international partners on sensible policies. Our focus is on technology, not taxation, like the household solar I mentioned and many other initiatives. Australians have been very strong on energy efficiency initiatives. We've done very, very well on this. We'll keep doing sensible things, working with countries across the world, but we're ultimately going to act in Australia's interests.
JIM WILSON: Okay, closer to home. The New South Wales Energy Minister Matt Kean has unveiled that $32 billion renewable energy plan. Are you warming to it?
ANGUS TAYLOR: We've got no problem with state governments getting involved in their energy sectors but what we've got to prevent is deterring investment in dispatchable, reliable energy. And we've seen one of the consequences of this plan over the last little while. We've had AGL and Energy Australia put on halt the progress of their gas generators. They're very concerned about the impact of the New South Wales plan on their investments. One in the Illawarra, one up in the Hunter. And, you know, this is of great concern. Now, we want New South Wales to make sure that investment in dispatchable, reliable generation happens and is not deterred by their plans. It's really incumbent on them to sort this out and get onto it as quickly as possible.
JIM WILSON: Do-
ANGUS TAYLOR: We've got Liddell closing in April 2023. It needs to be replaced.
JIM WILSON: Yep.
ANGUS TAYLOR: New South Wales have no plan for replacement of it. We had two companies who was stepping up to the plate to invest in generation to replace it, and now they are stepping back because of the actions of the New South Wales Government. It's time for New South Wales to step up.
JIM WILSON: Okay. Before I let you go, do you think Matt Kean can deliver cheaper power bills to New South Wales residents?
ANGUS TAYLOR: Well, if we get more supply coming in and we make sure that generators - like Liddell - when they close are fully replaced, we can always deliver lower prices.
JIM WILSON: But I'm not asking about-
ANGUS TAYLOR: We have to-
JIM WILSON: I know, but Minister, I'm asking about the $32 billion renewable energy plan. Can he deliver - our listeners want to know will they get cheaper power bills? Do you think he can deliver?
ANGUS TAYLOR: Only if the dispatchable generation that leaves the market is properly replaced. Then we can get lower prices. And that's actually been what's happening around the east coast of Australia over the last 12 months. We've seen electricity prices coming down, but it will only continue and we can only hold prices down if when we lose a big generator like Liddell, it's properly replaced. That's the key.
JIM WILSON: Okay.
ANGUS TAYLOR: And that's what we're asking the New South Wales Government to sort out. We are playing a role in all of this. We've been playing a role for some time. But the New South Wales Government is the one that put forward this plan that's deterring private sector investment.
JIM WILSON: Okay, we'll have to leave it there. Appreciate your time this afternoon as always, Minister.
ANGUS TAYLOR: Good on you Jim.
Minister Taylor's office: 02 6277 7120