(Repeats with no changes to text)
By Clyde Russell
LAUNCESTON, Australia, Sept 15 When government
policies are driven by populist politics, it is almost certain
to lead to poor outcomes and a low standard of debate, as shown
by the current conundrum in Australia's natural gas sector.
The natural gas-rich Northern Territory has become the
latest of Australia's eight state and territory governments to
restrict the development of the industry, by placing a
moratorium on hydraulic fracturing, or fracking, of wells.
The Northern Territory move came as part of a campaign
commitment by the newly-elected Labor Party government, which
has promised an inquiry into the effects of fracking.
By stopping the development of new natural gas ventures, the
Northern Territory has joined the populous southeast states of
New South Wales and Victoria, as well as the island state of
Tasmania, in stymieing a vital energy source.
The main motivation is seemingly to avoid conflict with
well-resourced environmental groups opposed to fossil fuels, as
well as farmers, who have concerns about the potential impact of
fracking on water tables and on the availability of farmland.
But in caving into pressure groups, politicians are setting
themselves up for bigger problems down the track, as a lack of
supply will drive natural gas prices higher, threatening
industries and causing retail energy prices to spike.
Although the Northern Territory move has been initiated by a
centre-left Labor government, the hobbling of the natural gas
industry is not a reflection of the traditional political divide
New South Wales, the most populous state and home to the
economic hub of Sydney, has also placed a moratorium on projects
using coal seams to extract natural gas, and it is ruled by the
centre-right Liberal Party, which also holds power at a federal
level and in Tasmania.
Victoria has a Labor government, but its recent announcement
of a permanent ban on shale and coal seam fracking represents a
ramping up of the temporary ban imposed by the state's former
In stark contrast to the Victorian decision, the Labor
government of South Australia is appealing directly to petroleum
companies to set up operations in its jurisdiction.
Tom Koutsantonis, South Australia's energy minister and
treasurer, has condemned the actions of Victoria, calling it
"bad news" that will constrain the supply of natural gas and
increase reliance on dirtier coal-fired electricity.
"I strongly believe that the approval or otherwise of gas
exploration and extraction projects should be left to
independent experts, rather than to politicians," Koutsantonis
said in a statement last month.
So why is South Australia so in favour on exploring for
unconventional natural gas? It might be because the state is
facing electricity shortages since the closure of its last coal
power station in May.
While it can run on gas-fired power and renewables, when the
wind doesn't blow or the sun doesn't shine, South Australia
becomes reliant on power from neighbouring Victoria, which is
This exposes one of the greatest ironies of the campaign
against natural gas fracking.
By ensuring that natural gas supplies will be limited, and
therefore prices high, environmental activists are keeping
coal-fired power competitive.
Victoria has some of the most-polluting coal plants on the
planet in terms of emissions per kilowatt-hour generated, as
they rely on poor-quality lignite mined next to the generators.
Many of the environmental groups reject natural gas as a
transition fuel between coal and renewables, and furthermore
reject independent scientific reports that show the risks of
fracking are minimal with suitable regulation.
It appears the hypocrisy of (correctly) challenging
climate-change deniers on the basis of scientific evidence, but
ignoring the science of fracking is lost on many green
For the moment, activists and farmers appear to have some of
Australia's state and territory governments running scared.
The state leaders in Victoria and New South Wales aren't
being up front with their electorates, pretending as they are
that banning onshore natural gas projects won't have an economic
It will, especially in Victoria, which is home to many
natural gas consuming industries, such as chemicals, fertilizers
and packaging. You may imagine jobs would be a front-and-centre
issue given the state is about to lose tens of thousands as the
motor vehicle industry shuts down over the next two years.
Already domestic natural gas prices are rising and consumers
could soon have to pay, apart from transport costs, a price
equal to what the three liquefied natural gas plants in the
northeastern state of Queensland can get for their product from
With many domestic long-term natural gas contracts ending in
the next two years, it's possible that higher costs for new
supplies will cause businesses to re-evaluate their operations
or expansion plans.
Perhaps Australia's politicians should use some of their
expense money to go to one of Bruce Springsteen's concerts when
he tours the country next year.
Perhaps the rocker will perform My Hometown, his lament to
the rust-belt cities in the northeast United States. If he does,
the politicians should heed the following line. "Foreman says
these jobs are going boys and they ain't coming back."
(Editing by Himani Sarkar)