Interview with Kieran Gilbert, Sky News Sunday Agenda

KIERAN GILBERT: Let's go live now, though, to the Minister for Climate Change and Energy, Chris Bowen. Chris Bowen, thanks for your time. The gas industry is howling. They're not happy with this deal. Given their recent pricing behaviour, do you believe that they had it coming?

CHRIS BOWEN: Good morning, Kieran. I don't find the complaints from APPEA convincing in the slightest. This argument really goes to say we believe we need profits as high as we can get during a war, during a global energy crisis, for our industry to be viable. Nobody's going to believe that, Kieran, because it's not true. 96 per cent of gas last year sold for under $12. The average price was $9.20 a gigajoule. And for anybody to argue that they need to be able to make more than $12 and double that is just ridiculous. And I don't think that argument is going to hold any water. And I'm surprised that Peter Dutton's bought that argument. It shows that he just doesn't understand the issues in the energy market. This is Australian gas under Australian soil and Australians should pay a fair price for that. But they shouldn't be paying a wartime price. A wartime price leading to very high profits for a few companies and endangering industries right around the country. I mean, I'm standing to you, talking to you today in Smithfield, where I live, on the edge of the largest industrial state in the Southern Hemisphere, Smithfield Wetherill Park. There would be businesses that would close next year because they couldn't afford these gas prices. And we're selling gas around the world for elevated wartime prices. And it's not okay. Peter Dutton thinks it is okay. We don't. We disagree. The states agree with us. This is a decisive package for difficult times and I'm very glad that we were able to put it together.

KIERAN GILBERT: So will this package, these caps, keep businesses afloat that otherwise would have gone under?

CHRIS BOWEN: I believe so, yes. Yes. There were businesses and industries saying to us very clearly that they would have a lot of difficulty surviving next year in the face of gas prices and electricity prices being what they were. And that's no light thing to say. And we took that very seriously in the government and we weren't going to stand by and let that happen. Ed Husic, the Industry Minister, has been very, very strong on this point and working with industry through this with me and with the Treasurer and with the Resources Minister working these issues through, and we've come up with this carefully designed package in careful calibration with the states to ensure that we have a holistic plan. Effectively, as I heard mentioned before the interview, we couldn't just act on gas and couldn't just act on coal because that would have all sorts of distortionary impacts. So we did need to take our time to work that through. We've come up with a very, very strong package which deals with both the key inputs to these elevated prices. The IEA, the International Energy Agency has made it very clear, crystal clear, they say 90 per cent of the energy price rises around the world have been caused by coal and gas going up as a result of the war in Ukraine, as a result of Vladimir Putin's actions. Now that wasn't the fault of the workers in the industrial estate where I live or in factories around the country. It wasn't the fault of the people who are going to be faced with these high energy prices in the absence of action. It was Vladimir Putin's fault and also the result of ten years of policy denial and delay with four gigawatts coming out of our energy system and only one gigawatt going on. So that needed to be fixed. We have a temporary plan, it's temporary and targeted, a short term plan to get us through the next twelve months of these elevated prices. In the meantime, we get on with our medium term plan of the transition to renewables, which is the cheapest form of energy and we've made big progress on that during the last weeks as well.

KIERAN GILBERT: The industry body says it will cost future or potential projects and investment. What do you say to that? Are there any concerns on that front?

CHRIS BOWEN: Look, I understand APPEA's job here. APPEA's job is to represent the companies who are members of them who were quite happy with the big profits they were making while the war in Ukraine is going on. I understand that, respect that. That's their job to defend those profits. It's not our job. It's our job to act in the national interest. Our job to defend the factories and the households around the country. Actually, that's Peter Dutton's job as well, one he's being negligent at. But anyway, that's a separate question. In relation to the specifics, we are very clear that this gas price cap applies to existing facilities. If somebody wants to factor in the economics of the future, that doesn't apply. This is a temporary cap in extraordinary circumstances for twelve months then we'll have a mandatory code of conduct which we will consult on. We've got time to do that. As I said, APPEA has got a job to do. They have to represent their members and their members best interests.

KIERAN GILBERT: They've got a job, but have they lost sight of their social -

CHRIS BOWEN: Our job is the national interest. Our job is the national interest, Kieran, and they’re different things.

KIERAN GILBERT: Yeah, indeed. But get to the heart of it here have they lost sight of their social licence?

CHRIS BOWEN: I have made it clear, as my cabinet colleagues have, that gas companies do have a social licence. This is Australian gas under Australian soil and Australians have a right to access it at a fair price. I don't expect everybody to agree with that, naturally. And APPEA has a different view. I respect that. But there is a social licence here and it's our job to apply that social licence. And I think that's what the Prime Minister did on Friday, frankly, across the board, to these companies, whether they be gas or coal, to say, this cannot stand. We are going to intervene, we are going to have a response. We thank our state premier colleagues, all of them, and my energy minister colleagues, obviously, for their interaction, to make this work. It wasn't an ideal situation for the Commonwealth to only use our powers. We needed the full weight of the powers of the Commonwealth and states in play here, particularly New South Wales and Queensland, the two coal states, black coal states. And that's exactly what's happened.

KIERAN GILBERT: We've got Ted O'Brien, the Shadow Minister, coming up shortly, but just to repeat what Peter Dutton said, and I'll get your reaction to it, he says ‘we're going to look back in twelve months and realise this was a catastrophic decision made by a very bad government, a government that can't get the economic calls right.’ Do you accept that there is an enormous amount of inherent risk in this intervention?

CHRIS BOWEN: I tell you what I accept, Kieran. And Ted O'Brien's got some explaining to do. Why does he think it's okay for gas companies to charge way above the odds, way above what they were getting last year, to Australian factories and households? Why is that okay? Why is it okay for coal companies to do the same to Australians? These are Australian resources that should be available to Australians. So I want to know why Peter Dutton and Ted O'Brien think that these prices, more than doubling, is okay. And why do they think it was all right to let energy prices increase by 50 percent? What's their plan? Would they stand aside and do absolutely nothing? And they continue to blame renewables and lie. I mean, renewables are the cheapest form of energy. Everybody, every expert acknowledges that. I want to know what the opposition's plan is and don't let me hear about a conversation about nuclear. That would be a gas bag led recovery, years off at best, the most expensive form of energy. But what would they do on Thursday to reduce power prices over the next twelve months? They have no plan, no clue. They think it's just fine to let gas companies charge whatever they want. I mean, Peter Dutton's talking points are basically the gas company's talking points. That's the matter for him. He's got no original thoughts, no original ideas, no plan of action at all. All he does is sit on the sideline and carp. I mean, when we went through a health crisis over the last two years, the Labor Party as the opposition, was constructive, supportive, providing support wherever we could, providing constructive advice wherever we needed to. Now we have an energy crisis and Peter Dutton is just doubling down on the denial and delay of the last ten years. And they still haven't apologised for hiding the 20 percent increase before the election, which Angus Taylor changed the law to do. I'm yet to hear an apology from Ted O'Brien or Peter Dutton or Angus Taylor for that pernicious action in misleading the Australian people.

KIERAN GILBERT: What they do argue, though, to get beyond the politics of it, is they say there needs to be more supply. That would be their plan. It's what Angus Taylor has said repeatedly, what Peter Dutton says, you drive down prices with more supply and more supply where it's needed, like in Victoria. Is there, are there options for extracting more gas in Victoria? Closer to where much of the gas is used as opposed to piping it down from Queensland?

CHRIS BOWEN: Well, these are the guys who presided over a decade where you had four gigawatts of power leave the grid and one gigawatt of dispatchable power come on. And they talk about supply now. Angus Taylor talks about supply. He oversaw a regime where three gigawatts left the system. He promised almost a billion dollars of investment and he didn't deliver a watt, let alone a kilowatt or a gigawatt of power. Now, in relation to gas exploitation, that's a matter primarily for state regulation. New South Wales, Queensland, Victoria all have different policies. The fact of the matter is that we deal with the resources we have available to us and we manage those. I mean, we had the Opposition in the last sitting week saying, just get more gas into the system. I mean, I don't know where they think we could just have a magic pile of gas on standby just to put into the system whenever they think is necessary. What we do is work, as we did in the July energy crisis, we'll work with companies across the board to ensure with AEMO and others that everything is being possible to get all the supply into the system so the lights stay on. That successfully worked in the midst of the crisis that Angus Taylor left us as his little goodbye present on the way out of the door to the new government. And I'm not going to take any lectures from these clowns who presided over a decade of 23 energy policies, denial and delay and four gigawatts leaving the system and one gigawatt coming on. I mean, they've got no clue, Kieran. No clue.

KIERAN GILBERT: Minister, when it comes to the broader impact of the package, there was an argument by the government that this is going to put downward pressure on inflation. I've seen a number of economists question that, though, saying that this is actually expansionary in terms of its sort of broader policy approach because it's going to leave more dollars in people's pockets to spend. Is it going to make the RBA's job harder?

CHRIS BOWEN: No, on the contrary. And we designed it very carefully for that reason. That criticism would have been valid if we just sent cheques to households. That would have been a valid criticism. We're not doing that. That's why we're working with the states to ensure that the bill is lower when it arrives in letterboxes and email inboxes and that is not expansionary. The Treasury has been very clear on their advice to us on that point, so has the Reserve Bank that this is not expansionary, that this reduces inflation. The Secretary of the Treasury has made that crystal clear of at least half a percent of inflation. So that argument just doesn't hold water. Might have if we've done it a different way, a less well designed way, but that's not what we're doing.

KIERAN GILBERT: Let's look at the medium to longer term, and you've mentioned it a couple of times the need to expedite the transition to renewables. The Opposition, and it's appropriate given we're heading into a discussion with the Opposition, but to get your response to it, they say that there simply isn't the capability now enough to store the solar, wind power when it's needed. What do you say to that? That it's basically - that this approach is misplaced in the longer term because there isn't that broader storage capacity.

CHRIS BOWEN: Well, Kieran, if you don't understand renewable energy, you can't manage it and clearly the Opposition doesn't understand it. The stuff you see come out of Peter Dutton's mouth about renewable energy just is gobsmacking. It's basically just a continuation of the denial of delay. He says he's not against renewable energy, he just opposes any policy which gets more of it into the system. Now, of course you need to store renewable energy. Absolutely you do. That's exactly what the task we’re getting on and doing. This week I reached unanimous agreement with state and territory energy ministers Labor, Liberal and Green, all of us working in a Team Australia moment to develop the Capacity Investment Scheme which will support dispatchable renewable energy. So that's renewable energy accompanied by storage. Now, Peter Dutton doesn't realise that there's such a thing as a battery, it was invented in 1800, and that hasn't occurred to him yet. He doesn't realise that wind actually works at night as well as day, including offshore wind, which the government is proceeding with at a massive pace. He doesn't realise that you can have not only batteries, you can have pumped hydro and in due course you'll be able to have hydrogen as well. All this is storage.
Now, that's like ‘saying the rain doesn't always fall, so we can't drink water.’ I mean, we store water and we can store renewable energy and you can also strengthen the grid to enable energy to be moved around the grid more effectively. That's exactly what we're doing as well in Rewiring The Nation. So this is just more of ten years of what we've seen, of not getting it, not getting the opportunities in renewable energy. Sure things need to change in terms of storage. We're doing that, we're getting on with the job. Peter Dutton says batteries don't work for more than a few minutes, he just doesn't get the role of a battery. I mean, you could say that about many traditional fossil fuel installations as well. They're not designed to cape the whole system by themselves. They're designed as part of a network to come together to ensure stability. And given the mess that we've inherited from the previous government with the lack of storage across the system, of course, we're proceeding at pace. That's why the Capacity Investment Scheme accompanied by Rewiring The Nation, which we've made huge progress on in our first six months, is so important.

KIERAN GILBERT: Chris Bowen, Climate and Energy Minister. I appreciate your time, as always. Thank you.

CHRIS BOWEN: Thanks, Kieran. And last show of the year. Happy Christmas to you and your family and to everybody watching at home.

KIERAN GILBERT: And to you and yours. Appreciate your time. Once again, Chris Bowen.