Name: Government's COVID Commission manufacturing plan calls for huge public gas subsidies - ABC News
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Government's COVID Commission manufacturing plan calls for huge public gas subsidies - ABC News

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State bans on coal seam gas development would be scrapped and the Federal Government would underwrite gas prices and massively subsidise costs and investment for gas companies, under confidential plans for a "gas-led manufacturing recovery" post-COVID-19.The draft plans, obtained by the ABC, call for the scrapping of "green and red tape" on gas development, including a relaxation of Australian standards for equipment used in gas infrastructure and a loosening of environmental regulations and approval processes.They are set out in an interim report from the manufacturing taskforce of the National COVID Coordination Commission (NCCC).The NCCC is a hand-picked team of business leaders and former bureaucrats set up by the Prime Minister's Office to shape the economic recovery from the virus and lockdown, and .The manufacturing taskforce includes business representatives as well as union leaders from that sector.Its draft report advocates "underwriting new [gas] supply with government balance sheets" to allow gas producers "to invest with confidence and new pipelines to be built to get the gas to markets".The taskforce says the Government should be "taking a non-operating equity position, minority share, or underwriting position" in gas projects and "provide support, such as low-cost capital, to existing small and mid-cap market participants".It also wants mechanisms to put a government-guaranteed floor under gas prices, so companies can borrow against that guaranteed price.And the NCCC wants massive government spending to underwrite a network of new pipelines linking gas projects in the north-west of Western Australia to the east coast.Loading...New gas ventures that meet state-based environmental standards would be exempt from the need to gain federal environmental approvals under the Environment Protection and Biodiversity Act if the recommendations of the commission and taskforce are adopted.Concerns about the environment and the impact on agriculture and groundwater have led to the shelving of coal seam gas developments in NSW and Victoria.But the NCCC is urging governments to "lift the moratorium in NSW and the remaining moratoria in Victoria", "initiate a rapid 'red & green tape' reduction" and "establish a global best practice gas development regulatory framework in the Northern Territory — to unlock new supply for the east coast."The contents of the plan highlight potential conflicts of interest for businesspeople involved in the NCCC and its manufacturing taskforce.West Australian businessman Nev Power, who chairs the NCCC, is a director and shareholder of WA-based Strike Energy, which aspires to be "the lowest cost onshore gas producer in Australia" and would potentially benefit from government investment subsidies and the underwriting of gas pipelines.The NCCC report obtained by the ABC advocates "accelerated developments for highly prospective opportunities" including the Perth Basin, which is Strike Energy's main exploration area.The commission's special advisor on manufacturing renewal, former Dow Chemical global chairman and CEO Andrew Liveris, is deputy chairman of the world's biggest oil and gas consultancy and engineering firm, Worley, and is also a director of Saudi Aramco, the world's biggest oil and gas company, which has ambitions to invest in Australia.Facilitating foreign direct investment in the gas industry is one of the report's recommendations.A Senate committee which examined the taskforce last week was told that members of the NCCC were required to sign a conflict of interest declaration but, as a "special advisor" to the commission, Mr Liveris was not.Speaking at the committee hearings, the CEO of the NCCC, former Productivity Commission chairman Peter Harris, said the commission had established "what you might consider to the normal declaration process" for conflicts of interest at the start of each of its meetings.He said that as NCCC chairman, Nev Power had "taken it upon himself to advise commissioners that … should they encounter something which involves commercially sensitive information which could create a perception that they are being put in an advantageous position, they should draw that matter to his attention or, in his absence, to my attention."Mr Harris added that the commission would "construct an arrangement by which they can either continue their involvement in this or remove themselves from involvement … and another commissioner will take over."In a statement to the ABC from the Department of Prime Minister and Cabinet, on behalf of the NCCC, the commission reiterated that it follows "best-practice arrangements for managing the integrity of its advice"."That includes recusal from discussions where there may be a conflict of interest and written declarations to the Department of the Prime Minister and Cabinet recording their interests and those of their family members," the statement noted."The commission has also put in place additional processes to manage potential conflicts of interest, such as commencing each meeting of the NCCC with a declaration of any relevant conflicts."When asked by The Business host Elysse Morgan in an interview earlier this month whether his involvement with Strike Energy presented any conflict of interest given his role at the commission, Mr Power said he supported all types of energy.He described Strike as "an emerging player in the gas market in Western Australia".When asked again about the potential for conflicts in , Mr Power said "we are very transparent about our interests" and the commission had "processes" to address that issue."We are there to provide business advice and we are upfront about that."Mr Power said, ultimately, the government would make decisions, not the commission.In the vision of the taskforce, gas development goes hand-in-hand with development of energy-intensive manufacturing industries, including chemicals and "mineral tech".But the NCCC's emphasis on a "gas-led manufacturing recovery" and call for government subsidies and relaxing of environmental controls has drawn severe criticism from analysts and advocacy groups who support a shift away from fossil fuels to renewable energy."It's a blueprint for the gas industry, it's not a manufacturing blueprint, it's pathetic," said Tim Buckley, director of energy research at the Institute for Energy Economics and Financial Analysis, who spent 30 years in senior roles in investment banking."They say we need to correct the 'market failures' of our current energy supply to reduce electricity costs and 'break the investment logjam'."As far as I am concerned, spending 80 billion dollars in east coast gas markets in the last eight years is an exact opposite of an investment logjam."Mr Buckley said there was a huge irony that the gas industry's massive, unprofitable investment in three giant gas export terminals off the coast of Queensland was responsible for a massive rise in gas prices for Australian industry."The very industry that has created a massive inflationary pressure that has undermined our manufacturing base is now saying the gas industry should get massive subsidies," he said."Their answer to the gas industry absolutely decimating the manufacturing industry is for tax payers to underwrite a rescue of the gas industry."They say they want 'a free and open trading regime', yet they are calling for taxpayers to provide massive capital subsidies and to underwrite gas prices."On the reckoning of the NCCC, Australian gas prices have tripled since 2014, when the export terminals were built.While there is mention of gas reservation policy — which would see a set amount of gas set aside for domestic use, rather than export — it does not feature in the report's key points, which focus on public investment, increased production and pipelines.Dan Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility, accuses the industry of using COVID-19 as cover."This is predatory behaviour from the gas industry," he argued."They are opportunistically using the COVID-19 crisis to push through uneconomic, polluting plans dependent on taxpayer subsidies, which until the pandemic hit were beyond their wildest dreams."While aspects of the draft plan have widespread support within the gas sector — such as reduced environmental regulation and more streamlined approval processes — the construction of an east-west pipeline has received widespread criticism within the industry for its prohibitive cost.The interim report has an extensive list of people the NCCC's manufacturing taskforce spoke to in devising its plan.It includes a large number of executives from the energy and resources industry including gas giants Santos and Inpex, oil and gas explorers Pangea Resources and Blue Energy, chemical giants Dow, Orica, and IncitecPivot, oil and gas engineering consultancy Worley, and mining giants BHP and Rio Tinto.Only one firm from the clean energy sector was included in the list, EPC Technologies, and it was the company's senior gas and hydrogen expert who was consulted.However, the commission noted that the Manufacturing Taskforce was only one of its working groups."The commission has liaised with well over a thousand stakeholders representing a broad cross-section of the business community including individuals and organisations with expertise in renewable energy," it said in a statement."The commission has established a number of working groups to explore issues and bring forward ideas for further consideration, of which the manufacturing working group is one.", More on:

State bans on coal seam gas development would be scrapped and the Federal Government would underwrite gas prices and massively subsidise costs and investment for gas companies, under confidential plans for a "gas-led manufacturing recovery" post-COVID-19.The draft plans, obtained by the ABC, call for the scrapping of "green and red tape" on gas development, including a relaxation of Australian standards for equipment used in gas infrastructure and a loosening of environmental regulations and approval processes.They are set out in an interim report from the manufacturing taskforce of the...

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Government's COVID Commission manufacturing plan calls for huge public gas subsidies - ABC News

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