CHRIS KENNY: Now, Russia's invasion of Ukraine has wreaked havoc on Europe's energy market, with countries like Germany facing massive energy shortages. A lot of this was happening before the invasion, mind you, and the Federal Government's warning we could be facing a similar scenario if we don't commit to building new gas fields. To make sure the lights stay on, the Government is going to spend almost $50 million in extra funding for gas projects in this week's Budget.

Federal Energy Minister Angus Taylor joins me now from Brisbane. Thanks for joining us, Angus. We've spoken before about the energy crisis in Europe. It's come about because of their reliance on Russia because of them trying to get out of coal in the past. But the Ukraine situation has deepened the crisis. It's seen a big turn to nuclear power in France, possibly the extension of coal fired power plants in Germany and the UK. It's a serious crisis. 

ANGUS TAYLOR: Well, it is, Chris. And you're right   it's been exacerbated by what's happening in the Ukraine and Russia, of course. But it also had the seeds of the outcomes we're seeing here now in the underinvestment that you've been seeing in the last couple of years. Under ESG pressures, a lot of companies refusing to make investments in gas in Europe, and countries preventing them from doing it, and that has left Europe with an energy, and particularly gas, shortfall.

The contrast is we've kept investing through the pandemic. The gas fired recovery was all about making sure we had investment going into the supply of gas so we had Australian gas working for Australians as we came out of the pandemic. And we're in a situation now where our price in Australia is about 20% or an 80% discount to the international price in Asia and Europe. So, this is a remarkable position to be in. 

However, we will lose that position very quickly if we don't continue to invest in supply of gas, and that's why the $50 million we've announced today is for projects that will keep that supply moving, and not just increasing the supply but moving it to the right places through pipeline projects and storage projects where those are needed. That's what we've been doing. It's been working. But   but, you know what, Chris? If you had the wrong political party in charge, I can tell you this would all stop and we'd end up where the Europeans are right now. 

CHRIS KENNY: A couple of points on that. A lot of our gas is exported   that's great. But we're talking about domestic supplies here. But the same argument is, you know, it wasn't so long ago   certainly less than a decade ago   we all talked about gas as being the perfect transition fuel, and it can be there as you go to renewable energy, you can have gas plants there to fire up and firm up supplies quickly. Suddenly, it's being targeted, as you say, by these environmental goals with business and the environmental activists. It seems to have just fallen out of favour so quickly, and it's irresponsible. Don't we really need gas, especially the more we install renewables? 

ANGUS TAYLOR: Well, we do. We need balance in energy systems. You always do. But if you haven't got a fuel like gas in there, you get into big trouble when you've got a lot of renewables in your system. All the household solar that we have in our suburbs now, you've got to balance that up, you've got to have something that can switch on quickly at night. But you also need to be able to produce fertiliser, alumina, and all those products that we rely on every day. And, of course, they're produced from gas. 

I mean, the food we eat every night, every morning, every lunch, Chris, is made possible because of gas, because you can only produce that food from the fertiliser that's made from gas. So, we have to have that supply. I tell you what, though, you say it has fallen out of favour, and it's true   in some circles, that's been true. But right now Europe can't get enough of the stuff and they want more... 

CHRIS KENNY: Well, exactly. 

ANGUS TAYLOR: …and that's understandable. You only notice these things when they're gone, Chris. And Europe's paying the price. We are not going to allow Australia to get into that situation, and that's why we are making these crucial investments. But as I said, across the political divide, you see no desire to keep it going. 

CHRIS KENNY: We've seen a big reversal... Yeah, we've seen a big reversal in Europe on coal, on gas, and on nuclear   on all the reliable forms of energy   because they're starting to realise that nothing's more important than energy security. You can't have an economy without energy.

But that goes back to the other point about what you're talking about doing, and that is a lot of this is state government decisions. And it's not just been Labor state governments. You've had Liberal or Coalition state governments who are opposed to exploration and development on gas, onshore and offshore. You've had that trouble in parts of South Australia and certainly in New South Wales, under a Liberal Government, you haven't got…gas projects have been blocked? 

ANGUS TAYLOR: Yeah. Well, we've seen the Victorian Government, of course, has had a moratorium on all gas. It's now reduced that to just onshore gas. We've seen New South Wales unwilling to make approvals   although, they have now, and I pay tribute to that, that they've now approved the Narrabri Gas Project. Ironically enough, the two states where we've seen more gas supply coming on - and we've been working hard with these governments to achieve it - have been in Queensland and WA, with Labor governments.

But, you know, the important point here is that this is an important part of the fuel mix. You go without it, you go without food, you go without heating, you go without electricity. And the Europeans are learning this the very, very hard way, Chris. For a long time now, they've been outsourcing their gas supplies to Russia, and meant they could reduce their emissions. Of course, global emissions weren't coming down because the Russians were producing the gas, and then they were piping it into Europe. That put Russia into a very, very powerful position. Europe lost control over its own destiny and the results are plain to see right now. 

Now, we're simply not going to allow that to happen here, despite the fact that the Labor Party has shown no enthusiasm for gas. We've got Ged Kearney down in Melbourne saying she wants to ban the barbecue, she hates gas so much. 

CHRIS KENNY: Oh, no! 

ANGUS TAYLOR: So, this is the real risk. 

CHRIS KENNY: Hang on... 

ANGUS TAYLOR: This is the real risk. 

CHRIS KENNY: We've had ban the weekend, now we're going to ban the barbecue! That's a dire situation. 

Thanks for joining us. 

ANGUS TAYLOR: Thanks, Chris. 

CHRIS KENNY: Appreciate it. Energy Minister Angus Taylor there. I don't understand how gas has fallen out of favour with all these greenies. It was only 5 to 10 years ago the environmentalists understood we needed more gas so that we could use it to firm up renewables and they could close down those coal fired power stations they hated so much. Now they want to get rid of everything – no energy at all.