Canavan’s successor apt to fuel energy wars
Whatever else might be said of Australia’s new Resources minister, Keith Pitt’s history suggests a politician with the courage of his very conservative convictions.
He showed this when the house of representatives voted on same-sex marriage in December 2017. While some opponents of marriage equality, including Scott Morrison, squibbed it and failed to turn up, Pitt was one of just four MPs to vote no.
He’s shown it, too, in respect of climate and energy policy. The sugarcane farmer turned politician, elected to the Queensland seat of Hinkler at the 2013 election, has long been a nuclear energy advocate in Australia. And he remains one, despite public resistance and bipartisan policy to the contrary.
Most importantly, given his major new role in directing Australia’s response to climate change, Pitt showed the courage of his convictions when in August 2018, just a few days after Morrison succeeded Malcolm Turnbull as prime minister, the Queenslander quit the ministry.
The context was this: having helped to dispose of Turnbull, the Coalition’s climate sceptics – some of whom were outright deniers and more of whom opposed a meaningful policy response – wanted to see Peter Dutton elevated to prime minister. The hope was he would abandon Australia’s Paris commitments.
But Morrison won, Australia stayed in the Paris accord and Pitt quit, saying: “I will always put the national interest and the interests of my constituents above my own. I will always put reducing power prices before Paris.”
It was a noble act of principle, except the principle it was based on was false: rather than increasing power prices, renewable energy is decreasing them. The government’s own Energy Market Commission says so, and forecasts further declines for household power bills over at least the next three years as a result of increasing renewable electricity supply. The biggest fall, 20 per cent, will come in south-east Queensland.
Now, though, Pitt is back, courtesy of a ministerial reshuffle forced by the internecine warfare among the Nationals and Matt Canavan’s decision to resign from his cabinet position so he could support the leadership aspirations of Barnaby Joyce. It’s a complex situation but, again, the climate and energy policy is a big part of the context.
At the end of round one in the Nationals’ leadership fight – few observers doubt there will be another round – Joyce continues to stalk the party leader, Deputy Prime Minister Michael McCormack. Canavan, freed of what little constraint his ministerial role placed on him, is sniping from the backbench, and his fellow fossil fuel advocates are emboldened in their push for more protection for the industry. The fracas has spilled out of the Nationals party room to involve their Coalition colleagues.
The flashpoint has been a proposed new coal-fired power station at Collinsville in Queensland.
Despite the fact the Australian Energy Market Operator has determined there is no need for it – because north Queensland already has “surplus” power, and renewables would in any case be a cheaper option – Joyce, Canavan and the other “coalies” continue to push the project. They argue the government should underwrite it and indemnify it against future climate risk. Before the election, back when he was still a backbencher, Pitt was among this group.
Liberal moderates are appalled at the suggestion. The Liberal Party is, after all, supposed to be the party of market forces. On Monday two of them, Trent Zimmerman and Dave Sharma, who both hold inner-city seats where there is high concern about climate issues, went public, saying the government should not put taxpayers’ money towards new coal-fired generation.
They were not alone. A substantial cohort of energy experts lined up to declare the project unviable. Even The Australian reported the Australian Industry Group, a usually government-friendly business lobby, was warning that indemnifying the Collinsville project could cost taxpayers up to $17 billion.
They were all a bit late. On February 8, just two days after becoming Resources minister, Pitt made a joint announcement with McCormack, Energy Minister Angus Taylor and Assistant Minister for Northern Australia Michelle Landry: $4 million for a feasibility study into the Collinsville project.
The prime minister, astride the barbed-wire fence between the anti-environment members of the Coalition and the Liberal moderates, tried to spin this as a matter of no consequence, because no firm proposal on Collinsville was “currently before the government”.
But the coalies trumpeted the announcement as a victory. In the senate on Tuesday, moderate minister Simon Birmingham sought to assure the chamber that “the government is not funding a new coal-fired power station”. He was heckled by Canavan from the backbench: “Not yet.”
Pitt’s behaviour since taking up the Resources portfolio doesn’t suggest he has altered his views on energy. In a series of media interviews he vindicated his nickname “Pitt to Port”, trumpeting his determination to increase Australian production of coal, gas and uranium.
One moderate Liberal described the situation as déjà vu, with no significant change in the shift from Canavan to Pitt.
He recalls the last time the Coalition tried to do a serious reset of policy, through the national energy guarantee (NEG), put forward by then prime minister Malcolm Turnbull and then Environment and Energy minister Josh Frydenberg. They won the support of the overwhelming majority of members of the Coalition joint party room for the policy.
But there were about a dozen who threatened to vote against it in parliament. The moderate calls them “terrorists … prepared to blow up the joint”.
They prevailed, the NEG was dumped and, shortly thereafter, Turnbull also.
Reports of the fevered negotiations between Turnbull and dissidents portrayed Pitt as a key figure, demanding the NEG be amended by the addition of a $5 billion fund to a government-owned company to build several new power stations.
With the exception of Tony Abbott, those who trashed the NEG are still in the party room. Scott Morrison even intervened to save a couple of prominent climate change deniers – Craig Kelly and Jim Molan – from more moderate challengers.
One might assume the renewed evidence of disarray in the Coalition on climate and energy policy would be a boon for Labor. But the opposition has problems of its own.
To understand Australia’s emissions stalemate, it’s important to acknowledge two separate but related issues: the country’s domestic response to climate change, and our massive exports of fossil fuels. Australia’s domestic contribution to global warming is disproportionately large – we are, per capita, the biggest emitters in the developed world. But the contribution of our fossil fuel exports is some three times bigger than that.
Labor went to the election promising a 45 per cent reduction in greenhouse emissions by 2030, in contrast to the Coalition’s promise of 26-28 per cent. The opposition’s policy was widely condemned, not only by the government but also by many in the business community. The Business Council of Australia said it would be “economy-wrecking”. It is perhaps a measure of the extent to which opinion has changed on the subject that BCA chief Jennifer Westacott, in a recent appearance on ABC’s Q&A, advocated a legislated target of net zero carbon emissions by 2050.
As to Australia’s exports: when Labor’s Richard Marles, now the party’s deputy leader, said before the election that a collapse in the global market for thermal coal – the kind used for electricity generation – might be a good thing for the planet, he opened the party up to furious attack.
Canavan, then Resources minister, accused Labor of wanting to “shut down Australia’s biggest export industry and cost more than 50,000 Australians their jobs”.
“This is not just about Adani,” Canavan said. “The Labor Party is now actively saying they want to see Australia’s coal industry shut down.”
Following Labor’s surprise election loss, new leader Anthony Albanese declared the 45 per cent domestic target “a mistake”. The ALP now has no firm policy on domestic carbon emissions, although senior figures in the party offer private assurances that this is simply a tactical measure, intended to make Labor a smaller target. They say a comprehensive policy will be produced closer to the next election, and that the “vast bulk” of party members would be “furious” if Labor retreated from the policies it took to the 2019 election.
In the meantime, the opposition will take opportunistic shots at the government – as Albanese did when he was asked whether the government should have funded the Collinsville feasibility study.
“No. Exclamation mark,” he said. But he went on to stress that he was arguing on the basis of the project’s economic viability. He made no mention of climate impacts.
Labor made supportive noises about legislation proposed by independent MP Zali Steggall, which sets out clear targets for transition from fossil fuels – all the while pointing out that her bill would likely come to nothing because Morrison would not allow it to be debated.
On the issue of fossil fuel exports, though, Labor’s position is indistinguishable from the Coalition’s – dig it up and ship it out. Joel Fitzgibbon, ALP member for the coalmining seat of Hunter in New South Wales, appointed shadow Resources minister after the election loss, is quite clear on that.
“The truth is if we become the government, we’re not going to intervene to put a brake on local coalmining ventures. No way in the world,” he tells The Saturday Paper.
“My view is that so long as people are demanding our coal, we should take the economic opportunity.”
And he believes that demand will remain strong for at least the next four years, and probably 10.
The evidence suggests Labor is softening its message on climate issues, just as public opinion is hardening.
The authoritative, long-running Australian Election Study of actual voter behaviour recorded a doubling, to 20 per cent, of people who nominated climate or environment as the top issue influencing their votes at the 2019 poll. Among Labor voters, it was 29 per cent, and among those aged 18-24, it was about 50 per cent.
Both major parties are losing younger voters in droves. Thirty-seven per cent of those in the 18-24 group voted for the Greens, compared with 44 per cent for Labor and only 15 per cent for the Liberals.
And this was before this summer of climate extremes. An Essential poll on January 29 found 71 per cent of respondents supported a policy of net zero carbon emissions by 2050, while 62 per cent wanted government to stop any coalmines from opening.
That last finding lends support to the argument of Adam Bandt, the new leader of the Greens, that people are increasingly coming to the realisation that it is not enough just to address the domestic climate challenge without acting on exports.
“The Coalition and Labor want us to believe that we can make climate targets without phasing out coal, but that’s a lie,” he says.
“People are rightly recognising that the best thing that we can do here in Australia is to leave coal in the ground; whether it’s going to be burned here or overseas doesn’t really matter to the planet.”
Greens policy would phase out thermal coal by 2030, but sets no deadline for abandoning the type of coal used in steelmaking, and would put a moratorium on new oil and gas projects.
Bandt reckons Labor took the wrong message from the 2019 election result. He thinks its climate policy was a net positive, and it lost for other reasons.
Even in the handful of Queensland coal seats where Labor lost, he believes, the result was less due to climate policy than to a failure to persuade worried workers that their jobs were not simply going to disappear, and that Labor cared about their futures.
“I think the clear message from the election is that we need a clear transition plan for coal communities, to let them know they will be looked after, as we get out of coal,” he says.
Geoff Dyke, Victorian secretary of the mining and energy branch of the Construction, Forestry, Mining and Energy Union (CFMEU), makes the same point, even as he acknowledges the inevitability of change.
“You know,” he says, “when these coal plants get shut down, workers need to transition to something. We’ve got blokes, at the higher end, earning $200,000 a year. If you transition them to putting solar panels on roofs, they’d probably get $45,000.”
Dyke is an advocate for nuclear power, substantially on the basis that operating a nuclear plant would require many of the same skills “and would probably pay similar wages” to operating a coal plant.
A CFMEU official and a Queensland Liberal National MP – it makes for an unusual unity ticket, but such is the Gordian nature of Australia’s energy wars.
Only last year, Keith Pitt was a driving force behind the establishment of an inquiry by parliament’s standing committee on environment and energy into “the prerequisites for nuclear energy in Australia”. Government members eventually cautiously recommended the government further consider the potential for new “small modular reactor technologies”. Non-government members maintained blanket opposition.
In reality, though, nuclear energy is not going to happen in Australia, even with Pitt as minister. It’s not even supported by the rest of Dyke’s union, says its national president, Tony Maher.
Maher, who has a long record working at the interface between climate and energy policy – he was involved in working up two versions of an emissions trading scheme under Labor, and has represented Australia and international unions at climate forums – suggests it is much easier to move on domestic carbon emissions than on exports.
“When you start talking about export markets, that’s when the rubber really hits the road,” he says.
“The Paris agreement doesn’t require any country to restrict exports of any product anywhere in the world.”
The fact is, fossil fuel exports are hugely economically important, “the icing on Australia’s economic cake”, as Fitzgibbon puts it.
And there is huge pressure from vested interests. Highly paid workers in the industry are just one.
Analysis of Australian Electoral Commission data, released this week by the Australian Conservation Foundation, shows that as public concern about climate change has grown, so have donations to the major political parties from fossil fuel companies. They gave $1.9 million in 2018-19, more than double the $894,336 donated in 2015-16.
Then there is the matter of union-based superannuation funds, on which there has to date been very little focus – yet many industry funds in Australia invest in fossil fuels. An excellent analysis in the Nine media this week examined the investments of one of the biggest, CBus, the super fund for mining and construction industries, and identified $128 million in companies with big fossil fuel interests.
Further, the Nine report found: “The fund has also backed 90 per cent of shareholder resolutions put forth by the coal companies it has invested in, according to annual general meeting results.”
Which is to say, it was doing little to encourage those companies to clean up their acts.
This debate often returns to the question of what climate-concerned individuals can do in the face of all this. Well, super fund members can lobby their funds to divest. Citizens can likewise lobby their parliamentarians. Steggall has put her climate bill online, along with a petition. Their aim is to get 2.5 million signatures.
Of course, that depends on ordinary people acting on their convictions. Perhaps Keith Pitt may serve as inspiration.
This article was first published in the print edition of The Saturday Paper on Feb 15, 2020 as "Canavan’s successor apt to fuel energy wars". Subscribe here.