National small business administrator and advocate Kate Carnell has called on State and Territory governments to end their blockers to development of natural gas, predicting “dire consequences” if energy policies are not changed quickly.
High energy prices combined with unreliability of electricity supply were putting small businesses “in a precarious position”, said Ms Carnell, the Small Business and Family Enterprise Ombudsman.
“If we don’t fix the policy settings there will be small business closures and job losses, it’s that simple,” she said.
The change most urgently needed was for state governments to “stop their grandstanding and get on board with a national approach”.
“For manufacturers, the rising cost of energy has also heightened their vulnerability to foreign competition, eroding one of the few cost advantages that Australia has compared to other countries.
“It’s a terrible shame that one of the most energy-abundant nations in the world has reached this point.”
“Bans and moratoria on gas production are part of the problem and should be lifted.”
Ms Carnell’s comments follow warnings from the food, chemical and industrial manufacturing sectors, as well as from unions, the ACCC and the Federal Government.
Her comments urging state governments to cease grandstanding were echoed by The Australian Financial Review in an editorial column this week.
Anti-gas states needed to reconsider their “flat-earther moratoriums”, the AFR said.
They also needed to stop “grandstanding” on their own “daft” ideas of running their own clean energy target schemes.
The existing disconnect between national and state energy policy had already produced “a mess of distortions”, the newspaper said.
“Chief among these has been the force-feeding of subsidised virtually zero marginal cost wind and solar power into the energy grid – particularly in South Australia – via state renewable energy targets.
“The problem is this new electricity is unreliable. It is cheap enough to put (older) coal-fired power stations like Hazelwood out of business but not reliable enough to replace coal.”
Natural gas has historically been an ideal fuel to back-up coal-fired and renewable energy electricity, but it is currently less economic due to a reduction in the previously plentiful supply.
State Governments blocking or hindering natural gas development in Victoria, NSW and the NT were making this situation much worse.
“The gas which should have come online to help bridge the shortage, but hasn’t, has effectively been banned by some of the state governments that demand we accept the science of climate change, while themselves rejecting the much more provable science of fracking.
“Victoria, blind to this hypocrisy, even gave in to inner-city green biddies and lock the gaters and banned conventional gas exploration.”
Victoria has a near 100-year record of safe natural gas extraction. Its own Environment Department said its significant reserves could be developed with “low risk” to land and water.
However, the Government decided to side with enviro-activists rather than the State’s millions of gas users and instituted what may well be the world’s only ban on conventional gas drilling.
The situation has been strongly criticised by unions, industry groups and current and former politicians such as Jeff Kennett, who described it as “criminal” and Senator Nic Xenophon, who called it “absurd”.
Ms Carnell said the Finkel Report on Australia’s energy needs provided a way forward.
“The recommendations are technology agnostic, they support growth in renewables and storage, and encourage lower emissions from coal and gas,” she said.
“Business as usual is no longer an option. Business as usual is lack of reliable power and unsustainable price increases.
“The only growth will be in high-polluting diesel generators and off-grid generation.
“Without confidence and stability there won’t be investment in baseload power generation.
“Without investment there will continue to be price hikes and unreliability.
“The consequences for small business, employees and consumers are potentially dire and can’t be allowed to occur.”