Several detailed studies have now shown up the Scott Morrison government’s “gas-led economic recovery” plan to be a fraud. It won’t create many jobs, it won’t lower energy prices but it will increase greenhouse gas emissions.
A study by the Grattan Institute released on November 15 found that the companies that would benefit most “contribute only about 0.1% of gross domestic product and employ only a little more than 10,000 people”.
The Grattan study also found the gas recovery plan would not lower energy prices. “The east coast has already burned most of its low-cost gas, and will not go back to the good old days of low prices, so gas will become an increasingly expensive energy source.”
Nor, it said, does gas stack up as a “transition fuel”.
“As Australia’s coal-fired power stations retire over coming decades, it would be more expensive to replace them with gas than to switch to more renewable energy such as wind and solar.”
A study by The Australia Institute on November 16 drew similar conclusions. It found 82% of Australia’s gas production goes to exports. The liquefied natural gas (LNG) export industry uses 12 times as much gas as the entire manufacturing industry and more than twice the amount used by households.
Richie Merzian, AI’s Climate and Energy Program director, said the government claim to be trying to create jobs in manufacturing “by giving money to the gas industry” is really about “just giving money to the gas industry”.
“Manufacturing jobs declined for decades when Australia had cheap abundant gas, then continued to decline when gas production tripled over the last ten years. It’s hard to think of a less effective way to create manufacturing jobs than giving money to the gas industry,” he said.
Gas contributes 19% of Australia’s greenhouse emissions — 14% from burning and 5% from “fugitive emissions” that escape in during production, processing and transportation.
But these figures understate the problem of “fugitive emissions” according to the Climate Council’s Passing Gas: Why Renewables are the Future released on December 3.
Extracting any of the three major fossil fuels — coal, oil and gas — releases significant greenhouse gases (carbon dioxide and methane) even before the fuel is burned.
But there are more fugitive emissions in gas extraction.
“In the 2018 calendar year, the Australian gas industry released at least half a million tonnes of methane directly to the atmosphere unburned, directly released seven-and-a-half million tonnes of carbon dioxide, and produced another six-and-a-half million tonnes of carbon dioxide as a result of flaring,” the study found.
These fugitive emissions were significantly under-reported because the official estimates of the industry’s emissions “ultimately rely on assessments conducted decades ago, on a different continent, at a time when the unconventional gas industry was in its infancy”.
Until recently, virtually all Australian climate assessments considered the impact of methane on global heating to be 25 times worse than carbon dioxide. But the latest studies show that methane is “up to 40 times more potent over a 100-year period” and “100 times more potent over a 20-year period”.
As conventional gas reserves run out, future gas extraction will come more from unconventional gas — coal seam gas, shale gas and tight gas — which often require “fracking” — the use of dangerous chemicals that pose a grave threat to underground water reserves.
Before Morrison announced the gas-led recovery (designed by a special committee headed by a former mining CEO Neville Power), east coast gas projects were in trouble because of rising extraction costs and greater gas production in other countries.
Corporate bail-out
The government’s grand plan now looks like little more than another expensive corporate bail-out.
Alternative ideas for a job-rich plan to turn Australia away from fossil fuel extraction, use and export have been coming together at pace, spurred on by significant technology advances to produce and store renewable energy.
Beyond Zero Emissions (BZE) launched its Million Jobs Plan in June. It demonstrated that 1.8 million jobs could be created over a five-year plan to reboot Australia as a low-carbon economy.
These jobs would be created through investment in renewable energy (202,000 job years, meaning there were would be work, on average, for 202,000 people for a year); making homes and other buildings energy efficient through retrofitting and new builds (935,000 job years); better mass transit and cycling lanes (138,000 job years); greening manufacturing (215,000 job years); land use and regeneration (200,000 job years); recycling (78,000 job years); and education, training and research (10,000 job years).
Many of these jobs could be created in the regions where jobs in the fossil fuel industries are dwindling. There is a specific chapter looking in detail at the Hunter Valley in New South Wales.
The programs to “green” homes and other buildings would create the most jobs (159,000 in construction phase and another 30,000 in ongoing maintenance), and most of these could begin as soon as the investment was made.
It estimated that retrofitting 2.5 million homes over five years to make them net zero energy emitters would require an annual investment of $15 billion (just $25,000 per home).
Governments could build net-zero energy public housing for just $273,000 per home. These would not only be good for the environment, they would slash household energy bills.
In the area of renewable energy, advances in solar panel and battery technology have not only made renewable energy cheaper and more reliable, it has reduced the time frame in which renewable energy production could be stepped up. It has also opened up the prospect of renewable energy becoming a significant export.
Renewable energy resources, BZE argues, give Australia a competitive advantage and, together with the development of green hydrogen technology, makes it possible to expand its manufacturing sector, including green steel and green aluminium production.
Many of these ideas are taken up in the reports from the Australia Institute and Climate Council and in the still-developing Green New Deal plan of the Australian Greens (who also argue that a return to free tertiary education would create many more jobs).
Some unions, such as the Maritime Union of Australia and unions involved in the Hunter Jobs Alliance are discussing some of BZE’s proposals.
Risks
The BZE plan is pitched both to government and corporations.
While it sees a major role for direct public investment in electricity transmission line projects, the construction of energy-efficient social housing and the electrification of buses and trains, it hopes the corporate sector will see the profit openings in a renewable-based economy and come up with most of the hundreds of billions of dollars needed.
But it also wants government to encourage businesses to invest by supplying infrastructure, low-cost finance, price guarantees and by fast-tracking regulatory approvals.
There are some big risks involved in this approach.
First, the corporate sector is notorious for abusing such schemes (witness the JobKeeper corporate abuses).
Secondly, many global studies show public funds have historically created more jobs when spent on public works rather than when given as subsidies or tax cuts to the corporate sector.
Thirdly, and most important, the urgency of the climate emergency means that we cannot wait for the corporate rich to make the jump and stop trying to salvage their stranded assets in the fossil-fuel economy.
Fourth, the shibboleth that governments cannot go into debt for good purposes has been blown apart since the government racked up the public debt, only to waste much its last budget on tax cuts and subsidies that overwhelmingly benefited the already rich.
It could be argued, that history has already outdated some of the key political economic assumptions on which the BZE’s million jobs plan was based.
While the government is still defending its big business mates in the gas and mining industries (and the banks who have a huge stake in their stranded interests in fossil fuels), the closest the Labor Opposition has got to any of these alternative ideas is a promise to improve electricity grid so the “market” can decide what mix of renewables and fossils fuels to use!
Meanwhile every trade union, environmental activist group or progressive political party that is prepared to build a people’s movement for the urgently-needed rapid shift to decarbonising our society should start revising the plans put forward by BZE, and others, to fit the reality that we cannot be held hostage to the capitalist class to make the urgent shift.