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Energy: policy vacuum « Previous | |Next »
January 19, 2004

There is an article in today's Australian Financial Review (subscription required) on energy by Joel Fitzgibbon, the ALPs mining energy and forestry spokesperson.

He makes two points.

The first point is what the gas fire at South Australia's Moomba gas plant highlights. Australia can supply natural gas to China and the US west coast, but cannot guarantee supplies of competitively priced gas to its industrial and domestic customers.

The second point Fitzgibbon makes is that though Australian-owned gas shores up the future strategic reserves and energy needs of its trading partners, there is no long-term plan for Australia's own gas supply and transmission infrastructure.

Fitzgibbbon says the result is that Australia is facing a looming energy supply and infrastructure crisis. In a globalized world the private energy companies focus their gas marketing almost entirely on export opportunities to bolster the companies bottom line. Little is being done to use the wealth of the offshore gas reserves to fund the development of a national domestic gas grid.

I would add that Australia has an energy policy vacuum, given the failure to modernize the electricity grid, the shortage of electricity, using coal fired power stations to generate power and the unwillingness to shift to renewable energy. That vacuum has been filled by the market. It now shapes energy policy.

The most that politicians say these days is that is "we need more competition" to sort things out. The mantra indicates the poverty of ideas about energy beyond the protection of an old-fashioned industry. If there is anything beyond that it is about efficiency: ie., energy market reform measures that aim to lower the rate of growth of emissions by improving the economic efficiency of energy supply. The reality is that power campanies paid too much for the privatised energy infrastructure, are now debt laden and so do not have the money to fund the modernization of the energy infrastructure.

And consumers have to with live power cuts.

Smart management all round, don't you think?

| Posted by Gary Sauer-Thompson at 11:20 AM | | Comments (0)