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Interview with Scott Emerson, 4BC (Drive)

16 November 2020

Scott Emerson

Subject: The Grattan Institute's gas report


SCOTT EMERSON: The Federal Government has named gas as the key to Australia's economic recovery following the impact of COVID. The Government has pitched gas as a job maker, and it spruiked affordable gas as a boon to the entire manufacturing sector. But we did see a report released by the Grattan Institute today that's claiming that the gas-fired strategy is not the economic magic wand that the Government is selling it as. Now for the best person to talk to you about would be Angus Taylor. He's the Federal Energy Minister and joins me on the line now. Angus Taylor, thanks for being on 4BC Drive.

ANGUS TAYLOR: G’day, Scott. Thanks for having me.

SCOTT EMERSON: Now the Grattan Institute report, it’s very much dismissed your claims about the future of gas as an energy source for Australia going forward. Do you agree with that report, or what's wrong with that report?

ANGUS TAYLOR: Oh, you could drive a truck through it, Scott. Look, 850,000 Australians rely on manufacturing for their jobs. Manufacturing requires affordable, reliable energy. This report has ignored much of the role that gas plays in it. Gas is a feedstock. It provides inputs for fertiliser, manufacturing, or ammonium nitrate for the mining industry, plastics. But gas also is a crucial energy source and a direct energy source, and there's many including building materials, for instance, which the report ignores - bricks, cement, it ignores that as well. But it also provides critical fuel for the electricity industry. And again, it ignores that for aluminium smelting, which is of course, a very energy intensive sector in the economy. So, the report's extremely narrow. The broader view of this is all manufacturing requires affordable, reliable energy. The lower gas prices we’re now seeing are providing much lower cost energy, electricity, and feedstock for all of those sectors. It's making a real difference. We want to see a continuation of internationally competitive prices. That's crucially important. That’s central to our strategy. We want to see more gas getting out from under the ground. And we know that bringing more gas out from under the ground also facilitates more renewables into the grid because it acts as a firming for those intermittent renewables. When the sun goes down, you can click on the gas generator. So, for all of those reasons, it's a crucial part of our manufacturing strategy. It's a crucial part of our energy policy. And if we want affordable, reliable energy in this country as we bring down emissions, gas is central to it. We're not the only country who believes that. That's been true in the UK. It's been true in the US. It’s been true in much of Europe. It's true throughout Asia. The Japanese, for instance, making much higher use of gas in recent decades. And so we understand, as a big supplier of gas to the world, what an important role it plays.

SCOTT EMERSON: Now, the report itself, Angus Taylor, says that Australia's gas reliant manufacturers account for just 0.1 per cent of the national economy. What kind of Government support or subsidies do you need to put in place to encourage that market?

ANGUS TAYLOR: Can I just say, it doesn't. It's way more than that. 850,000 people in manufacturing and all manufacturing uses energy. That's the nature of manufacturing. So affordable, reliable energy is crucial to that.

SCOTT EMERSON: So why has the Grattan Institute got this so wrong then?

ANGUS TAYLOR: Well, because they don't like gas. I mean, look, the truth is there's ideological biases in experts, the so-called experts, these days that we see time and time again. And the Grattan Institute's made no secret of the fact that they dislike gas. So they're looking for ways to try to establish that or argue that, and they do it in an erroneous way. Look, I mean, the report is so flawed. There's a price chart in there that says the gas prices got too high. They stopped it at 2018. The price has halved since 2018. I mean, it's just dishonest. So, you know, this is the sort of stuff that a crucial industry for this country, a crucial industry for manufacturing, and of course, manufacturing remains a very important source of jobs in regional Queensland, for instance, across much of Australia as well, and particularly in regional areas, that the people writing these reports don't seem to care about that. But we do. And we're going to back in hard working Australians in the manufacturing sector, blue-collar workers, as well as critical sectors like agriculture. I mean the sugar industry, big user of energy, and we need to make - or the irrigation sectors in agriculture - we need to make sure they got the affordable, reliable energy they need. And, we want the market to work. It's not about subsidies. We want the market to work. That means having the right pipelines in place. We want the private sector to step up. And we're working with the private sector now to make sure that pricing is internationally competitive. That Australian gas users get access to internationally competitive prices. That Australian gas is working for all Australians, not just for exports. And that is work we're doing with the industry to make sure we get the outcomes we want.

SCOTT EMERSON: Now, I’m talking to Angus Taylor, the Federal Energy Minister. Angus Taylor, why has hydrogen suddenly become sexy?

ANGUS TAYLOR: It's an important feedstock for industry, and it's not new. This is the interesting thing, is that all the fertiliser, nitrogen fertiliser that farmers use is made, or nearly all of it is made from hydrogen. Now, we make that right now from gas and we split the hydrogen out from the methane, the gas and that's not new. We've been doing that for a long while.

SCOTT EMERSON: Yeah, but everyone seems to be talking about it. In fact, we just had the newly re-elected Palaszczuk Government up here appoint a Minister for Hydrogen.

ANGUS TAYLOR: Yep. So, it's not new. What is new is that we can use it now in ways we hadn't anticipated for electricity generation. We can make it in ways we hadn't anticipated before. We can make it not just from gas, we can make it from renewables. We can even make it from coal, and we're doing that down in the Latrobe Valley in Victoria. So, there's a range of ways to make it. And we are also learning different ways to transport it. We can transport it as ammonia, we can transport as hydrogen. But because it can be used to bring down emissions as a fuel source – dispatchable, that means it's there when you want it, not just when the sun shines – it's much more interesting now than it ever was. We're seeing countries like Japan putting enormous emphasis on it. I was actually talking with a Japanese group today who are investing alongside the Australian Government and one of the state governments in a project of over $500 million to get that hydrogen supply chain up and running. What it means is it's a very interesting source of energy and feedstock for manufacturing alongside gas. The two together, Australia is a major gas producer and is a major hydrogen producer as well, very powerful combination that continues on our role as an energy superpower for Australia and for the world.

SCOTT EMERSON: Angus Taylor, you’re the Energy Minister now, but you used to be the Minister of Cyber Security. We saw Australia sign up to a trade agreement. It involved also China at the moment. Do you still see China as a cyber-security threat to Australia?

ANGUS TAYLOR: Well, look, there’s many cyber-security threats to Australia, whether they are non-government actors. You know, we have significant groups of criminals who are involved in cyber activity and we see that across Australia, or whether indeed it's government actors. This is a major issue now, and we are putting enormous effort in now, as we were when I was Minister, to make sure we protect Australians against these threats. These threats can extend from full blown espionage on government activities right through to stealing money from individual’s bank accounts. And of course, there'll be many of your listeners who have seen money taken from their bank account one way or another via some kind of cyber-attack. It's becoming increasingly common. It's from a number of different countries across the world and a number of different groups, as I said, and we as a country need to protect our citizens against it on a regular ongoing basis. We are spending enormous amount of resource now - time, effort, and money - making sure we are protecting Australians.

SCOTT EMERSON: Well you say that a number of actors, whether they’re government or others - how big a threat is China on cyber-security?

ANGUS TAYLOR: Well, as I say, there's a number, and there's not-

SCOTT EMERSON: Yeah, but alright-

ANGUS TAYLOR: It's not one and they come from-

SCOTT EMERSON: How big is China, Angus Taylor?

ANGUS TAYLOR: Well, look, the truth is that cyber-attacks can come from any source. I mean, that's the reality and we have to be conscious of that. I'm not going to call out any individual country. Although when we have a cyber-attack where we know where it's come from, where it is very clear where it has come from, we do that on a cyber-attack, you know, on the basis of an individual cyberattack. We've done that in the past with Russia, where we've had attacks from the Russians. We've done it with other countries. So, we will call it out, but we'll call them out as we get the evidence we need to know where the attacks have come from. The flip side of this is not just calling out people, countries and organisations who have done the wrong thing - the flip side of it is defending Australians against it. And of course, we do both.

SCOTT EMERSON: Alright, Angus Taylor, appreciate you being on 4BC Drive this afternoon.

ANGUS TAYLOR: Good on you. Thanks, Scott.

Media contact:

Minister Taylor's office: 02 6277 7120