The aim of this (lengthy) post is tofollow the Coalition government’s messaging on gas and PEP 11 to see if itgives an insight into the pending decision.
We don’t have access to NOPTA orMinisterial documents, so we can only go on what is in the public domain.
The following tracks how the politicalnarrative is playing out. It’s not perfect and - in advance - please excuse theoveruse of the word “narrative”.
Political narrative is a tactic whereyou use selective information to achieve political dominance. It’s less aboutfacts and more about storytelling. Psychologist Jonathan Haidt said humanbeings are not logic processors, we are story processors.
FormerUS President Donald Trump used political narrative to ascend to the Oval Office. His “makeAmerica Great Again” was a compelling political narrative. It was a greatstory.
Gas-led recovery is apolitical narrative. It’s a great story. Who doesn’t want recovery during thedark days of Covid 19?
Federal Minister for Resources, KeithPitt, has repeatedly pushing his narrative (telling his story) to set up thelegitimacy of the decision that we are all waiting on. It’s a story of lower energybills, safeguarding supply and a greener future.
I mainly cite mainstream media, ratherthan ‘citizen journalism’ outlets. You might not like the editorial policy ofthe ABC, Sydney Morning Herald etc but at least they are committed in principleto high standards of journalism.
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January 2020: PM ScottMorrison says there is no credible plan for Australia’s energy plans that doesn’tinvolve the greater use of gas. At the end of January, he strikes a deal withNSW that requires it to pump more gas into the state.
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January2020: PM speak at the Press Club. Nick Malley from The Age and SMH subsequentlyreports:
“It is not clear when Morrison madehis own transition from coal to gas but the nation learned of it mostunequivocally during a speech he made at the National Press Club in January, asthe COVID-19 crisis was slowly beginning to unfold but before its staggeringramifications were clear.
"There is no credible energytransition plan, for an economy like Australia in particular, that does notinvolve the greater use of gas as an important transition fuel," saidMorrison at the time, arguing that switching from coal to gas had helped othernations reduce their greenhouse gas emissions. Gas would help the Australiangrid absorb renewable energy by providing power when, as he keeps saying,"the sun doesn’t shine and the wind doesn’t blow".
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August 2020: It’slogical that politicians work with people they trust to give themrecommendations – and sometimes to stand at the front of the stage and push thestory along.
The Chief Scientist inAustralian is Dr Alan Finkel. Dr Finkel would neverhave been influenced to pump up the gas story – he’s his own man and he cameunder heavy fire for recommending it as the way of the future. In true Finkelstyle, he came back strong:
·“Australia's Chief Scientist, has defended his position on the useof natural gas after being criticised by some of the nation's leading climatechange scientists, saying it would remain one of the nation's key energysources.”
·"There will be times whensupply from renewable electricity generators will be inadequate to meet demand”
·"the adoption of morerenewable electricity will be faster, more economical and more reliable ifnatural gas fired electricity generation continues to be available in the near-to medium-term."
Finkel’s defence of gas was picked upby the Greens (no surprise there) who attacked the Prime Minister. The PM seemedto enjoy it. He used the opportunity to restate his position during QuestionTime.
·"… we want to see more of it (gas) and get moreout of the ground, Mr Speaker, so we can fuel the jobs that this country needsas we come out of the COVID-19 recession."
·It was reported that “he noted that governmentmembers were ‘united in that view of gas’.”
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"We all support it, Mr Speaker. We are allbehind it. I believe the Australian people will also."
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August part 2.
AustralianConsumer and Competition Commission chair Rod Sims reveals Australia is sellingsome of our gas ‘below the prices offered to domestic users, despite the costof liquefaction and shipping’. This naturally provokes a demand that governments intervene more to control pricing and push down the price of gas for the average Australian.
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September 25, 2020: The PM’sstorytelling remains clear: “Gaswill help re‑establish a strong economy … making energy affordable for familiesand businesses and supporting jobs as part of Australia’s recovery from theCOVID-19 recession.”
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Now let’s roll forward to 2021.
On 21 January this year, the PrimeMinister was effusive about “east coast gas”.
His message was “The Liberal Nationals Coalition Government is keepingdownward pressure on energy prices for families and businesses ...”
·“Gas is critical to our economic recovery and this Agreementensures Australian businesses and families have the gas supply they need at thecheapest possible price.”
·“This is about making Australia’s gas work for all Australians,while also supporting economic growth and backing important regional jobs inour expanding LNG sector.
·“As part of our JobMaker plan we are delivering more Australiangas where it is needed at an internationally competitive price, thisparticularly includes manufacturing businesses who employ more than 850,000Australians, many of which rely on gas to operate.”
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Minister Pitt was part of thatjoint statement. He stated: “Both the AEMO andACCC have found the east coast of Australia has a low, but increasing, risk offacing a gas shortfall.”
A few other highlights,quoted here word for word:
·“The Coalition Government is also continuing withits commitments to unlock new gas supplies through the Strategic Basin Plans”
·“Affordable gas is also a critical component of theGovernment’s Modern Manufacturing Strategy”
·“The Liberal Nationals Coalition Government iskeeping downward pressure on energy prices for families and businesses”
On that last one, it’simportant to note that the media release starts with the words “The LiberalNational Coalition Government”.I went through the last 20 media releases from Keith Pitt’s office and none of them start with this “Liberal National Coalition” wording.
Clearly the Nationalswant their names up in lights when it comes to gas. That means the pressurewill be immense on the PM and the Libs if they want to go against the relevantMinister, Keith Pitt, who is a National.
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On 12 February, Pitt went intoover-drive to counter the negative messaging around the Offshore Sydney BasinExploration Permit PEP 11.
An ABC headline states: “Ministerbrushes off gas exploration fears, as company seeks PEP-11 licence extension”.The main points are:
·The Federal Resources Minister Keith Pitt hasdismissed concerns about a proposed exploratory gas well off the New SouthWales coast, describing it as "the size of a dining room table".
·"We obviously need to continue have reliable fuel sources,which the government is clearly focused on, and once again, to do that, we needexploration."
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He said other states,like WesternAustralia and Victoria, were benefitting from offshore gas projects, and the risks were low in New South Wales.
In summary: the narrative is benefits, low risk,reliable and “we need exploration”.
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15 February: Pitt shows his support for offshore gas.He issues a media release stating that he “welcomed news from BeachEnergy of the success of its recent drilling at the Enterprise gas andcondensate field offshore southwest Victoria.”
THIS may be one of our biggest clues about how hesees offshore drilling.
“The Beach success demonstrates that there continuesto be a bright future for the offshore sector which remains critical to meetingthe Australian Government commitment to a gas-led recovery.
“This is a great example of the industry operatingsafely and successfully in an environmentally important area like offshore PortCampbell.
“It is contributing to the local, regional andnational economy and co-existing with important local industries like tourism,”Minister Pitt said.
THE Minister can’t be anyclearer than that, surely? Gas is good and don’t worry NSW coastal tourism, theVictorian evidence/story shows you can both live in harmony.
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The next day, 16 Feb,Minister Pitt teams up with the Treasurer – as well as the Energy Minister – totalk about the “government’s gas-fired recovery”.
He says he wants to “unlock” our vast gas supplies.Here’s his official statement:
“Minister for Resources, Water and NorthernAustralia Keith Pitt said developing Australia’s gas reserves will help secureour energy future as well as delivering further economic benefits.
“Investing in gas projects is an investment inAustralia’s future,” Minister Pitt said.
“We’re unlocking Australia’s vast gas supplies tomeet our domestic gas demand well into the future while creating thousands ofjobs around the country, mainly in regional areas.”
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17 Feb: PEP opponentsrejoice when NSW Deputy Premier John Barilaro says that PEP 11 should not berenewed.
The news plays out allday. It’s one way traffic: the story is that PEP 11 is bad.
BPH shareholders knew thiswas coming – it had been clearly flagged by Barilaro, just as Pitt is flagginghis intentions. As a consequence, the share price rose.
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18 Feb: Minister Pitt startsto retake the high ground in the political narrative war.
He hasalready stated: “The Coalition Government isleading the way in bringing on new gas supplies – states and territories needto get on board.”
Now he tellsradio broadcaster Paul Turton that HE makes the decision, not Barilaro.
Pittemphasises that his obligation is to the people of Australia, not coastalresidents.
FOR a while it’s relatively quiet as we wait for the Minster’sdecision. A local east coast media outlet quotes the minister as saying it willbe made soon – but the weeks drag by.
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March 1: Announcement of a $50 millionCarbon Capture, Use and Storage Development Fund.A joint media release is issued with Minister for Energy and Emissions Reduction, Angus Taylor. Taylor is sometimes cited as a weak link in the Coalition’s ability to sell a story (narrative) but it’s quite obvious he will be a BPH ally within Liberal ranks.
The two ministers state that carbon capturetechnologies would be critical to achieving net zero emissions from powergeneration, natural gas and hydrogen production.
BPH has CCS as part of its proposal. Some see thisas Pitt continuing his scaffolding of the decision he is yet to make (ieapproval of PEP 11).
Pitt says: “The Fund is part of the Government’s$1.9 billion new energy technologies package in the 2020-21 Budget. The $1.9billion package included resourcing to support the development of a CCS methodfor the Emissions Reduction Fund, which is expected to be completed by the endof the year.”
“The Fund builds on the Government’s previoussupport for CCS technologies, including one of the world’s largest CCSprojects, Chevron’s Gorgon facility in Western Australia. The facility hassequestered over 4 million tonnes of CO2 since it first started operating inAugust 2019 and will ramp up to 4 million tonnes annually once operating atfull rate.”
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March 4 saw the narrative take anunexpected turn. People knew Barilaro was going to say no and handball thedecision to Pitt. But on this day, the PM was asked about the PEP 11 permit andhe said “no” when asked if he supported the PEP 11 renewal.
It seemed “off message” to all andsundry, and the PM shut it down quickly during the media conference - but thedamage was done.
Suddenly the government’s messagingwas turned on its head!
Unsurprisingly, Minister Pitt quickly steppedin to calm the waters and reassert his message:
·“While I appreciate the issue has generated a lot of publicdiscussion and differing opinions, as the decision maker I will carefullyconsider the proposal taking into account advice from [the National OffshorePetroleum Titles Administrator] and the legislation under which the applicationhas been made before making an announcement.”
He did it with Barilaro,now he was doing it with the PM.
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As an aside, it hasrepeatedly been acknowledged that Scott Morrison does not have an iron grip onpower. He is no John Howard, nor a Bob Hawke. He played the numbers to get thetop job and he is still having to play that game.
When he said “no” hesounded like “Scotty From Marketing”, playing to a local audience. When herepeatedly says “yes to gas”, he is speaking directly to the Liberal/Nationalsheartland, his key electoral support base.
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As a second aside, the PM used thefollowing words to fend off an inquiry into Christian Porter, after he was thesubject of alleged sexual assault claims.
The Financial Review reported: “Scott Morrison is arguing that the rule of law is fundamental to the proper functioning of liberal democracies such as Australia.”
The rule of law in the WestminsterSystem of Parliamentary Democracy is that the relevant Minister is delegatedthe authority to make certain decisions on behalf of the government. Theseinclude resource exploration permits, such as PEP 11.
So the PM has a ready-made defence forpersonally saying no to PEP 11 but letting his Minister approve it.
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March 10: Six days after the PM’sunexpected “no” comments, the gas/energy debate takes another unexpected twist.
We hear of the “early closure of Victoria’s Yallourncoal plant”.
To bevery clear – this supplies up to 22 per cent of Victoria’s electricity demand. It’sa big deal. A like car makers deserting Australia, they often set a date that’sa long way off but then move it closer when the heat dies down.
EnergyMinister Taylor is reported in the Sydney Morning Herald: “Private energycompanies have been put on notice to replace power supplies that will belost …”
“MrTaylor told Sky News he found out about Yallourn’s closure on Thursday and theMorrison government “won’t stand idly by” and watch power price rises.”
WHAT’Sthe narrative here? Saving the poor consumer from higher energy bills – and thisis fundamental to the story they will pitch for PEP 11. If the governmentapproves an exploration rig in NSW’s coastal waters, they will need people tounderstand that it’s either that, or pay more.
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Thenarrative played out during the day.
TheAustralian Energy Market Operator stepped up to the plate and warned of theneed for “new dispatchable capacity to keep consumer prices low and energyreliable”.
What is dispatchable capacity? Well, turns outit’s gas.
So re-read that quote above using the wordsgas. It reads: there’s a need for new gas capacity to keep consumer prices lowand energy reliable.
PITT is happy to let the experts do thetalking. They are singing his song so why get involved?
The Australian Energy Market Commission refersto “gas-fired generation” as critical to dispatchable capacity.
AEMC advisesthe likes of Minister Pitt. Its website states that it is “The rule maker forAustralian electricity and gas markets” and that it “We also provide marketdevelopment advice to governments.”
Bottom line: the rule maker and advisor toPitt say we don’t have enough gas.
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Same day (March 10). The Oppositioncomments on the closure and what it means.
Federal Labor makes it clear that is stillon board with the push for gas. It is increasingly clear that Labor understandsthe need for gas but will still grab easy “green” headlines in localised fights– and has done so with this project. But it also poured cold water on a push toscrap BPH’s permit in Federal Parliament, so it’s clear that they won’t makethe Government bleed excessively over this issue if Pitt gives BPH the greenlight.
When you analyse Labor’s priorities, itgoes like thi:
1.jobs
2.family finances
3.keeping the lights on
4.and a long way back is emissions.
This can be deduced from words thewords of Chris Bowen, Labor’sclimate change and energy spokesman on the issue:
“It’spast time for the Morrison government to face up to market realities andoutline a serious plan to create new jobs, improve energy affordability andreliability, and reduce emissions,” Mr Bowen said. (Note the placement ofemissions.)
ADDING weight to this, last Friday Iposted some commentary, which underscores Labor’s pragmatic stance. It’s fromthe left of the debate, from Renew Economy (“Clean Energy News and Analysis”):
And
The writer doesn’t like it but itsounds positive for BPH.
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March 10 really was was a busy day forgas. Minister Pitt addressed oiland gas majors about decommissioning old infrastructure. He specificallyreferences "offshore oil" and talks about the future challenge.
It’sall part of the narrative about responsible and safe offshore exploration anddrilling. The pitch is - Low risk for high reward. The evidence in this storyis – ‘Just like the Victorian example mentioned previously, where rigs andtourism operators co-exist in blissful harmony.’
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SUMMARY
It’s now mid-March. The ministerresponsible for the PEP decision, Keith Pitt, has been laying down hisnarrative in consistent, repetitive fashion. He’s been aided by a range ofgovernment ministers, including the PM for the most part.
Pitt has a clear narrative. Whensomeone takes it off track, he’s quick to reassert his messages, which are:
·The decision is mine as the relevant Minister (ie not the PM’s).
·I will make a decision in the national interest.
·That national interest is as follows:
oEnergy affordability – everyone hates high power bills.
oReliability of supply – the east coast faces a possible shortfall;short supply pushes up prices.
oCarbon capture and storage to achieve the government’s stated aimof “net zero emissions from power generation”.
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All of this all pointsto a “yes” decision for PEP 11.
As the general public,we don’t get to see the Minister’s confidential documents. But – and it’s a bigBUT - but there is absolutely nothing in Minister Pitt’s public narrative tosuggest he will knock PEP 11 on the head. To do so will cause him untoldpolitical damage after all the effort he has put into his messaging.
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FINALLY, ask yourself this: if Pittwas going to kill it off, why would hebe talking it up?
(20min delay)