Interview with Kieran Gilbert discusses the JobKeeper program, the Technology Roadmap, role of gas in the energy mix, role of coal and Liddell power station.

KIERAN GILBERT: Minister, thanks so much for your time. Before we get to this energy roadmap which you released this week, the technology roadmap, I want to ask you about the big story of the last 48 hours, this $60 billion mistake. Given there’s room to move, should the Government now be looking to extend the program to save more jobs?

ANGUS TAYLOR:  Well, Kieran, this was a forecast, an update of the forecast. The original forecast was based on the best information available. This is about a more subsequent update so it was not an objective or a target. Only the Labor Party could think that spending more money is a target. It is actually very good news, because on the ground, and that’s what really counts, it means that businesses are in better shape than we might have anticipated when those original forecasts were put in place on the best information available. It does mean that we’re in a better position as we work our way towards recovery, and that is fantastic news. There will be a review, of course, of the JobKeeper scheme in June, and that review will proceed reasonably quickly of course, and all of those issues will be looked at. That was always in the planning. But the important point here is this is very, very good news. The position is better than we had hoped, and certainly that is important as we go into recovery.

KIERAN GILBERT: But given it is in a better position, can it be broadened out to those sectors like universities, local government, that haven’t had that JobKeeper support?

ANGUS TAYLOR: They have support. I mean, the universities have been given very important support. Casuals, of course, have JobSeeker available, an elevated JobSeeker available to them, so that’s all been dealt with. But Kieran, at the end of the day, the Labor Party are out campaigning saying we should spend more money, they’ve never seen a dollar they don’t want to spend, and that is not our way. If the economy is in a stronger position than we had anticipated, it’s good news, it means we don’t have to spend as much money, and that’s what good Liberal-National Party governments do, they use the taxpayer’s money wisely.

KIERAN GILBERT: Is the JobKeeper package underwriting some of the state premiers being able to keep their borders closed, essentially, and therefore hampering recovery? Is that a concern to you?

ANGUS TAYLOR: Look, the medical advice on this is very clear, that there’s no reason for these borders to be shut down. Ultimately this is a decision for the states, as you know Kieran. But if the medical advice is clear and this is an important step forward in opening up the economies, then premiers should be seriously looking at it. Gladys Berejiklian has taken a very strong position on this of course, and we do need to get domestic tourism going again. That’s going to be enormously important. I see it around my electorate, how important it’s going to be, and ultimately removing any restrictions that are unnecessary is going to be critical.

KIERAN GILBERT: As we heard from Andrew Clennell just a moment ago, the Narrabri decision expected within a couple of months. Obviously you would welcome an approval of that project, but do you expect there would be quite a challenge in the court of public opinion given the massive amount of objections to it?

ANGUS TAYLOR:  Well, we need more gas coming into the system, Kieran. We’ve been very clear on that. We did a deal with the state government, the New South Wales State Government a few months back where we agreed to an extra 70 petajoules of gas coming into the system. That could be achieved through Narrabri. That’s not the only option. Ultimately this is an issue for the state government as to how that gas comes through. But we need the supply. Now, the good news is we’re seeing gas prices coming down, and we were seeing them coming down before COVID-19 in a fairly spectacular way, 30-35 per cent reductions. We’ve seen additional reductions since then. We are moving into an era with lower gas prices, we have to maintain that through more supply coming through. Narrabri is a good option. We’ve got to see moratoria lifted. The Victorian Government has recently agreed to lift its moratorium on conventional gas - good news again for more supply, crucial for industry, for households wanting to get their cost of living down, and of course for small businesses who are big users of gas.

KIERAN GILBERT: So, on the technology roadmap, gas was central to that. We saw the leaked report from Andrew Liveris as well, for the COVID commission, again talking about gas. This is central to where this energy debate is right now. So can you explain for us this morning and for our viewers, because the critics of this say that, essentially, gas is going to be replaced by renewable energy with storage in batteries and pumped hydro eventually replacing gas peaking plants. How does that timeline work out as far as your thinking goes?

ANGUS TAYLOR: Gas and coal are going to continue to play a really important role in our system for many years, and gas has a particularly important role in our energy system now and into the future. Couple of reasons for that, it’s very flexible, Kieran, so when people out there, viewers who have got the solar cells on their roofs, when they stop working when the sun goes down, you’ve got to have backup, and gas can play that role and it can play that role very quickly and very flexibly. Gas is also easily usable in industrial processes like fertiliser production. We want to see our farmers continuing to improve their productivity as we move towards a $100 billion industry, and gas plays a critical role there. With lower costs of gas this becomes a very, very important fuel source for many years to come. Yes, we’ll see a balance in our system and we’ll see continued investment in renewables. Batteries will come down in cost over time but gas is going to play a very important role here, and it is all around the world, Kieran. The growth in demand for gas all around the world is quite extraordinary at the moment for all of these reasons.

KIERAN GILBERT: So what do you say to the critics, and we’ve heard a few of them over the last few days, who are saying that the gas focus is at odds with the Government’s own commitments on a lower carbon future?

ANGUS TAYLOR: Well, that’s just not right. I mean, we’re going to meet our 2020 targets by almost a year’s worth of emissions, and that was even before COVID-19 came along. We are already on track to meet and beat our 2030 targets. We’ve planned and budgeted down to the last tonne how that’s going to be achieved, and that assumes a significant role for gas. So, look, you know, the idea that you flip your energy system overnight, which some people put forward, and we hear this from the Labor Party from time to time, is just crazy. That is not how you do it. There needs to be a balance in the system, and gas and a gas-fired recovery coming out of COVID-19 is an important part of that system.

KIERAN GILBERT: There was one reference in the report, page 42, which talks about low or zero emission gasses like hydrogen, biomethane, could replace natural gas. I guess the argument is that they could use that infrastructure potentially into the future anyway, so that gas infrastructure doesn’t become a white elephant. Is that basically the view?

ANGUS TAYLOR: Well, that’s definitely true. So if you look at hydrogen, already we’re starting to look at how we can feed hydrogen into the gas infrastructure system. The Japanese and Koreans are starting to test how they use hydrogen in their gas-fired generators, they’re very optimistic about that. So there’s definitely potential to use that infrastructure. But I should also make the point that carbon capture and storage is an important part of the technology roadmap. It’s a technology that is gaining traction very quickly around the world, recommended by the IPCC, the IEA, the US and UK governments are making extensive use of carbon capture and storage in their thinking and their planning. So this is an important part of the story as well.

KIERAN GILBERT: Yeah, it’s an interesting part of the story because we have heard it around the place for many years. I remember Kevin Rudd set up that institute with, I think it was $100 million from memory, into carbon capture and storage. So there’ve been moments when Labor’s backed that policy as well. But does it work? The question is, all these years on, can it work?

ANGUS TAYLOR: Yes. It’s working now. It’s working in Gorgon in Australia, we’ve got the biggest project in the world here in Australia. We’ve got 19 projects around the world, 13 in the US, I’ve visited several of them myself. So, yeah, it’s working. Everything comes down to economics. But look, this is ultimately all about technology, not taxation. Let’s use technology in a smart way to bring down the cost of energy, to reduce the cost of energy for industry, for small business, for households. Let’s not tax fuels unnecessarily and raise the cost of living for Australians. That’s the focus, and these technologies, like carbon capture and storage, can play an important role in all of that. Labor can’t make their mind up about this. Even this week we had Joel Fitzgibbon out backing carbon capture and storage, and Mark Butler and Albo going against it. So they don’t know where they stand on it, Kieran.

KIERAN GILBERT: But just in terms of, because this is interesting this technology, and we know Santos is delivering one I think by the end of the year as well. So obviously the private sector is putting money in it. But to get to the scale you want it, what drives business to invest in this because it is an additional cost in the production process, what’s the incentive for them to do it?

ANGUS TAYLOR: Well, it is an additional process, although the total cost now, you’re starting to see technologies emerging where the total costs aren’t necessarily higher. We’ve still got a way to go on all of that. But the incentive comes from many sources. One is we’ve said we want the Climate Solutions Fund to extend to carbon capture and storage. That’s an important reform which was recommended by the King review and we’ve supported that. Of course companies themselves have their own internal objectives they want to meet, they’re under pressure, and of course that’s why many of them are actually doing it. But ultimately, Kieran, all of this should be about deploying technology to reduce our cost of energy, not raise it, and that is the focus. All of these technologies, whether it’s carbon capture and storage or hydrogen, or more efficient use of gas or coal resources, for that matter, all of these things should be about driving down the cost of energy using our ingenuity and enterprise to bring down the cost of energy at the same time as we’re reducing emissions.

KIERAN GILBERT: Indeed, and that’s a noble goal, but I guess the question is what’s the market incentive here? So, if you’re using the Climate Solutions Fund, that’s still taxes isn’t it? You say technology over taxes, but that fund is funded by taxes.

ANGUS TAYLOR: Well, it’s all budgeted, absolutely, but you know what, what we’re not going to do is raise the cost of energy. We’re not going to impose a carbon tax or a carbon price. For three elections in a row we’ve seen Labor go to the people with policies which are effectively, as their Assistant Energy Minister put it, an implicit carbon tax. So they can’t get away from it. Our approach is fundamentally different, which is let’s bring down the cost of energy, let’s look at technology to do that, and let’s make sure we’re driving down the cost of living, the cost of doing business. Look, the great incentive, you talk about incentives for businesses, the greatest incentive of all is when a technology is really working, people choose it. Households, small businesses, industry choose those technologies because they’re better for their businesses, and the whole point of the technology roadmap is to push those technologies, those emerging technologies to the point where people choose them because that’s good for them and good for their business. That’s the ultimate incentive. We didn’t replace horses with cars by taxing horses. It was technology that made that progress possible and that’s exactly what this roadmap is about. That’s the approach of the Government.

KIERAN GILBERT: On the indicative list of priority technologies, coal doesn’t get a mention. Matt Canavan said he’s provided feedback to you that he thinks coal-fired technologies must have a greater prominence in the final version of the roadmap. Have you spoken to Mr Canavan to placate him? What’s the message to those supporters of coal?

ANGUS TAYLOR: Sure, I have, and I made the point coal is mentioned in the roadmap, but it’s in the list on page 32. So it’s an important part of the energy mix. Of course that’s a well-known technology, the technology’s continually improving and the continual efficiency gains we’re seeing in gas and coal is a really important part of what we’re seeing here. And we need to have continued balance in our system. So we’ve been very clear about this, Kieran, balance and taking a sensible, thoughtful approach to this, not trying to change our energy system overnight as some would want us to do. That won’t work, that’ll turn the lights off and raise costs. It’s this sensible approach where technology is central and key to bringing down the cost of energy.

KIERAN GILBERT:  A couple of quick ones before you go, on this issue. Collinsville, you commissioned a feasibility study into a Collinsville power station, what are the chances of it actually getting off the ground, though?

ANGUS TAYLOR: Well, we’ll see. At the end of the day, we’re exploring a whole range of different fuel sources and technologies here. We need to have many horses in this race and we’ve got to back any horse that has a prospect of winning. So there’s a whole range of technologies we’re looking at. That’s the point of the roadmap. So those who say: ‘Yeah, I’ve got one technology that’s going to solve all our problems in energy’ - well, it doesn’t work that way. We’ve got to have a balance, we’ve got to have a range, and that’s one of the projects we are considering and when we get the outcome from that work we’ll have a good look at it.

KIERAN GILBERT: There’s been a lot of talk about you possibly extending the Liddell Power Station in the Hunter. Is another option putting a gas peaking plant on the Tomago aluminium site? That smelter, I think, accounts for more than 10 per cent of New South Wales’ energy use. It is extraordinary the demand there. But is a gas peaking plant on that site something you’re looking at?

ANGUS TAYLOR: Yeah, Tomago, incredibly important user of energy, very efficient user of electricity by the way, compared to other smelters around the world and if Tomago went, then emissions would go up globally so it’s an important business and an important business for many jobs in the area. But our position on Liddell’s always been clear, Kieran, which is that we either want like-for-like replacement or life extension. The idea that you can shut a major coal-fired power station, or any power station for that matter, shut it and leave a gap in the market, we’re not putting up with that. We’ve seen what happened with Hazelwood in Victoria, we saw what happened with Northern in South Australia. If you shut a major generator without equivalent replacement then you see a spike in prices and a loss of reliability. That’s unacceptable. Now, is AGL going to go down the replacement path or life extension? I mean, this is ultimately a decision for them. They have been considering a gas-fired generator at Newcastle for some time but it hasn’t come to fruition. And ultimately these have to be committed investment decisions. But what we can’t afford is a gap in the market that pushes up the price of power for industry and households and small businesses.

KIERAN GILBERT:  Energy and Emissions Reductions Minister Angus Taylor, appreciate your time, thanks.

ANGUS TAYLOR:  Thanks for having me, Kieran.

ENDS