The misleading government energy claim game

ACCURACY is rarely something associated with government, but over the past week Hogsback has seen two classic examples of nonsense dressed up by the Australian government as a correct statement of facts.
The misleading government energy claim game The misleading government energy claim game The misleading government energy claim game The misleading government energy claim game The misleading government energy claim game


Staff Reporter

The first was a list of energy and resource projects which, if unquestioned, would seem to show an ongoing boom in coal projects. That is a claim which instantly raised eyebrows because it was published on the same day Xstrata said the $6 billion Wandoan project was in doubt.

The second was a claim from government Climate Commissioner Tim Flannery that the Australian economy could be powered “almost entirely by renewable energy” in the coming decades.

That is an interesting statement as it might be interpreted as a forecast that the economy will be a lot smaller in the coming decades.

On the first matter, the updated list of resource projects, it could have been seen as a positive for Australia, but only if it was believable.

In total, according to the latest Resources and Energy Major Projects list from the Bureau of Resources and Energy Economics (BREE) there is a record $268.4 billion in committed projects and another $291.9 billion in the feasibility stage.

What catches the eye is the $75.7 billion value assigned to 63 coal projects said to be in the feasibility stage, a list second only to the gas projects list ($104 billion in 11 projects). The inference there is that many of these will actually proceed in Australia’s high-tax, high-cost, anti-fossil fuel environment.

If it was not for someone else in a red suit chanting “Ho, ho, ho” as Christmas nears it would be The Hog doing a fine imitation of the famous “Ho, ho, ho” because the BREE list is straight from Santa’s big bag of wishful thinking.

The go-slow on Wandoan is an example of coal projects being whacked by government policies. The mothballing two days later of the Airly and Mannering mines by Centennial Coal is another example of how tough conditions are for coal mining, as if anyone in the industry needed reminding.

The second government trip to Santa’s fantasy land was the “all renewable energy” claim that came out in a report released last week confirming the rapid growth in the bureaucracy administering the government’s anti-carbon policies.

According to the latest count, there are four separate agencies running the carbon agenda. They are the Clean Energy Finance Corporation, the Climate Change Authority, the office of the Clean Energy Regulator, and the Australian Renewable Energy Agency.

Just how much this explosion in bureaucrats will cost taxpayers is a subject for another day. For now it is enough to consider what Flannery said and what came back as a powerful local reply, and an even more powerful reply from Europe.

Two days after Flannery’s famous “all renewables claim” the redoubtable climate sceptic and coal-industry champion Viv Forbes dashed off a brilliant follow-up letter which said, in part, that such an all-renewables achievement was “like me saying I could beat Roger Federer at tennis as long as he is forced to use a cricket bat instead of a tennis racquet”

“Any industry can be destroyed by taxing it to death while subsidising its competitors,” Forbes wrote, with the tax burdens of coal clearly in his mind.

“So the Flannery plan can be made to work as fast as he likes, but cheap reliable coal-fired electricity will not die alone. Consumers will suffer greatly, big industrial users will migrate, asset values will be destroyed and jobs will disappear.”

As if cued to pick up where Forbes finished, two of Europe’s largest industry groups chimed in with their concern about rising energy costs in the EU, and the threat of industry migrating to the US, where energy costs were falling, not rising.

Voestalpine chief executive Wolfgang Eder told London’s Financial Times newspaper that: “The growing gap between US and European energy costs was dangerous for all industries based in Europe because energy costs do not only influence energy intensive industries, but also the entire value chain.”

Siemens, the giant German industrial group, echoed the Austrian steelmaker’s complaint and a director of Dow Chemical said the availability of cheaper gas and oil in the US was a “game changer”

A policy document published by Orgalime and Ceemet, two Brussels-based industry groups that represent 200,000 companies in Europe, said the EU should “pay particular attention not to damage European manufacturing by unnecessarily driving up energy prices for little or no environmental benefit”

“The EU’s energy and climate change policies need to be realigned with economic reality,” the policy document said, which is very much the point being made by Forbes, and one that will come back to bite Australia very hard as it pushes energy costs up and drives manufacturing out of business.

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