Interview with Kieran Gilbert, Afternoon Agenda

Subjects: Gas supply code of conduct, Transition to renewables, Net zero agency, Rideshare EV fleet

KIERAN GILBERT: Back home now and the government’s announced the new code of conduct for the gas industry. With me is the Minister for Energy and Climate Change Chris Bowen. Thanks for your time. You’ve consulted with industry. For our viewers who might not be across the code, the draft and so on, will this guarantee supply going forward in terms of gas?

CHRIS BOWEN: Yes, it will – short answer. What we’ve done is consulted very heavily across the board – with gas users, gas producers – hours and hours of consultation to make sure we get this right. And basically what we’ve done is said, “Look, we’ll have a code of conduct which will lock in the price cap but also will provide exemptions where you guarantee supply – legally enforceable – and very strong rules around that and penalties for not complying with what you said you would do. ACCC and legally enforceable undertakings. And if you give one of those, then obviously we will then provide you with certain exemptions.” And that strikes the right balance. It means that Australian gas under Australian soil and Australian water is available for Australians at a reasonable price, but also that we are making sure that those gas shortages that both AEMO and ACCC have warned aren’t imminent, but they’ve warned they are a few years down the track because the southern fields, the Bass Strait fields are depleting, they’re not producing as much gas as they used to –

KIERAN GILBERT: But they’ll be avoided now?

CHRIS BOWEN: Well, we have dealt with that certainly in relation to 2027. So we’ve got indicative at this point gas supply commitments which will then turn into legally enforceable undertakings to avoid that shortfall in 2027.

KIERAN GILBERT: So the industries, are they on board now? Because initially they’d had some concerns about things like the exemptions being too complicated and various other things. Are they on board now?

CHRIS BOWEN: Look, I’ll leave industry to talk for themselves, but there has been very heavy consultation and this is a complicated area. But where you – basically the feedback to me from gas users and producers is this is a very sensible way forward and, you know, they thanked us for this consultation. This ticks the boxes of what we need. You know, we’ve talked many times about the transition that’s underway and moving to 82 per cent renewables, but there’ll still be 18 per cent in the system in 2030, which is fossil fuels, and that’s not counting the needs of industry directly for gas, industries which use a lot of gas, whether it be plastics or cement et cetera, who use a lot of gas. They need gas supply guarantees until and unless green hydrogen steps forward to replace. So there’s a long way to go. This is a very well balanced, sensible package which has taken a lot of effort on behalf of the government, myself and my fellow ministers – Jim Chalmers, Ed Husic, Madeleine King – all working together very closely to make this code of conduct a reality.

KIERAN GILBERT: And the code has got a price anchor in it that includes that $12 per gigajoule cap.

CHRIS BOWEN: That’s right.

KIERAN GILBERT: How does that work? So that price cap basically remains?

CHRIS BOWEN: That basically continues on, but we also provide an opportunity for gas companies, gas producers, to seek an exemption from that if they are guaranteeing new supply on to the system to help us fill gap in 2027. Most particularly not just 2027, but 2027 was the year we were most concerned about based on that AEMO, ACCC advice.

KIERAN GILBERT: And so they get that exemption. One of the things, I guess, in a broader sense, you spoke about that transition to 82 per cent renewables. And most energy experts would say we’re in the sort of final phase or investment period for new gas assets. Are you worried that this deal will preclude those dollars being spent here? Is there a risk there?

CHRIS BOWEN: Sorry, I’m not quite sure –

KIERAN GILBERT: In terms of, like, gas investments and gas contracts?

CHRIS BOWEN: No, on the contrary.

KIERAN GILBERT: The industry doesn’t come forward and invest because we’re sort of in that last phase before renewables take over.

CHRIS BOWEN: Well, when you’re talking about – on the contrary. But when you’re talking about sort of “new gas” – I’m not having a go at you here – but a bit of a slogan here, “Well, are you talking about new gas-fired power or new gas to existing gas-fired power stations?” As I’ve said, we need to ensure that the existing gas-fired power stations, which are very important for peaking and firming as we transition to 82 per cent renewables, have adequate supply of gas. That’s the key, and also there’s adequate supply of gas to those industries that use it directly, separate to the energy grid. All the evidence I’ve seen, all the advice to me, particularly from the ACCC and to my ministerial colleagues and the feedback from industry is that this provides the certainty and stability whilst requiring gas at reasonable prices in Australia for them to ensure that that supply continues.

KIERAN GILBERT: Okay. So that gets the balance right, because you do want to keep those dollars coming in at least for the foreseeable future.

CHRIS BOWEN: Yeah, those who say we can just switch off gas or we don’t need to worry about supplying gas-fired power stations, with respect, are just plain wrong.

KIERAN GILBERT: With the transition as well – and you and the Prime Minister have announced the net zero economy agency today – Ross Garnaut, Greg Combet among others – will the agency deliberately divert jobs to places like the Hunter and Illawarra, which have been the location of those traditional industries?

CHRIS BOWEN: Well, it will certainly have – it’s whole focus is those regions undergoing economic change as part of our energy transformation. So whether it’s directly with coal-fired power stations closing like the Hunter or elsewhere or more indirectly like the Illawarra, as you correctly point out is under a transition, I see the job of this authority as being, one, to identify obstacles to investing in these areas, particularly in relation to new energy and new energy-related jobs, of which there’ll be hundreds of thousands. So to work with industry to identify obstacles and to work with us then to knock those obstacles out of the way, working with the states. To be a one-stop-shop for those industries looking to invest in the regions. So, you know, if you’re thinking of opening up in the Hunter or in Central Queensland but you have some issues you want to talk to the Federal Government about, you’ll be able to go to the net zero authority if it’s energy related or energy sort of adjacent investment and be a one-stop-shop. They can then come to me and Ed Husic and other ministers to talk about what we’re doing to support those. And also to work with those communities on the skills that those communities need, their energy skilled communities, but the type of skills you need can need some refinement in a more renewable economy. So to talk with those communities, with TAFEs, with the entire sector about building those skills to make sure that those regions are at the heart – and we want them at the heart – of the job-creating, energy-creating, investment-creating revolution that’s under way.

KIERAN GILBERT: You know the Opposition is going to pick up on Greg Combet’s appointment as chair. The argument being jobs for the boys. What do you say to that?

CHRIS BOWEN: Well, I’d say a couple of things: Greg Combet is a very well-credentialed individual not only as someone who used to do my job with that experience but also very well linked in with the investment community through his work in superannuation. I mean, well respected. I would hope and expect, well respected on both sides of the aisle, given the previous government appointed him to the Covid commission to work with the Covid commission. So they recognised his abilities and skills there. We’ve recognised his very substantial abilities and skills. It’s a very well balanced, very credentialed, very high-powered board that the Prime Minister and I have announced today across the board – not just Greg but across the board – with those appointments.

KIERAN GILBERT: You, just finally, announced something for the EV sector today for share vehicles, a share ride company.

CHRIS BOWEN: Yeah.

KIERAN GILBERT: What about the – if you can elaborate on that, that’s great, but the EU Trade Deal, to me that would have been a real gain-changer in terms of getting cheap EVs or cheap high-quality EVs into the country. That must be a priority to get that deal done for you?

CHRIS BOWEN: Well, those negotiations are just underway. I’m supporting Don Farrell in that work. I won’t go into the details because there’s negotiations with the EU and it’s not my place to comment on them. It’s no secret that EV taxes are part of those conversations, but we’re not ready to make an announcement. To be fair, that’s mainly focused at the more expensive end of the market those conversations. No secrets there. But what we’ve announced today is very important because everybody these days goes on ride shares, uses ride shares. And when you think about it, ride share cars are very emissions intensive because they’re always driving. Unlike your car, my car, where they might drive to work, park it all day and then drive it home, these cars are always on the road. So making that transition is very important. So we’re providing $20 million of concessional finance to a firm which, of course, Splend, which is, if you like, a leasing company to ride share drivers. So the ride share driver doesn’t have to buy their own car, they can get it off Splend. That will lift their EV fleet from 500 to a thousand.

And, Kieran, the other good thing when you think about this is if people are thinking about EVs and thinking about making that transition, if you happen to book one of these cars, you get in it and you talk to the driver about, “Oh, this is a nice car. This is an EV. How does this go,” the driver will say, “Oh, this is a beautiful car to drive and I’m always the first off at the lights,” because EVs by and large are beautiful cars to drive, it helps with that sort of spreading the word through the community that EVs are not only good for emissions and good for society, they’re actually very good to drive and a much more pleasurable driving experience a lot of people say when they make the transition to EVs. It’s a very good thing for them to do.

KIERAN GILBERT: Minister, thanks for your time.

CHRIS BOWEN: Always a pleasure, Kieran.

END