It has always been argued that gas, while not a squeaky clean fuel, is a least a better bet than coal. But now it turns out that gas may be even dirtier, because the methane leaks that cannot be contained will probably nullify any advantages from emissions of coal.
Last week’s numbers brought us the bad news we were expecting: Australia has fallen into the worst recession in nearly a century.
But now for the worse news: it is now clear that the recession has collapsed into a full scale depression, three consecutive quarters of what the economists euphemistically call negative growth, with the likelihood of a fourth to follow.
The official figure was a fall of seven per cent in the June quarter, catastrophic enough. But the human cost is still more dire.
Whatever jiggery-pokery our treasurer can devise, unemployment will go into double figures by Christmas – unhappily, the latest date Scott Morrison has fixed on for his wildly optimistic turnaround. And it will be months, possibly years, before they subside to an acceptable level.
Confidence at all levels is at rock bottom: both consumer spending and business investment have plummeted. And with much of the government support that has had the survivors hanging by their fingernails about to be reduced or removed entirely, the chances of a revival in hope are slim indeed.
Morrison’s plan, if it can be dignified with such a name, is, as usual, tax cuts for the medium to rich, cutting red tape, tweaking industrial laws. At least, that is what the well-informed leaks are telling us will underpin the budget next month.
But this formula has been tried before numerous times without success, and in any case has been so well trumpeted that the likely response will be at best indifference and at worst disappointment. Infrastructure programs already in the pipeline may help in the medium to long term, and starting new ones will always be welcome, but will be no panacea.
What Morrison needs – what we all need – is big jolt, shock treatment to bring our timorous and torpid economy to some semblance of life. If Morrison and his indefatigable treasurer Josh Frydenberg have the electrodes in their kit bag, they have kept them securely hidden.
They are, however, still determined to look on the sunny side: things may be tough here, but you should see the rest of the world. Not all of it, perhaps, but with a little judicious cherry picking we can find a few countries in an even more parlous position.
And sure, there has been, is, and still will be, a huge price to be paid, but Australia has got through the Covid pandemic better than almost anyone – our rates of infections and deaths are surely something to be celebrated. Well, they certainly were. But unfortunately those days have come and gone; we are now back in the pack, even if we only consider the developed world.
The advantage Australia had was that we were always a bit behind; as the virus raged around the northern hemisphere, it paused at the equator, and Australia was able to learn from the depredations and profit from the experience.
Hence we closed our borders, implemented lockdowns, refined social distancing rules and brought the public, horrified by the figures in places like Italy and the United States, largely on board. So we came through the first wave better than most, and all governments and their agencies deserve considerable credit.
But then, in spite of all the warnings, complacency crept in. The feds failed to heed the vulnerability of aged care, Victoria was negligent over quarantine, the public decided that it wasn’t really too bad and now it was just about over. So when the second wave broke, as it was always going to, Australia was reduced to playing catch up.
And the disillusionment spilled through into a widespread resentment: why haven’t the authorities fixed it by now, as they had promised? Why have we missed out on the curve flattening, snap backs, return to normal? Trust was broken, and an unintended (certainly from Morrison) consequence was that so was confidence. Restoring it will be far harder the second time around.
So the budget cannot be just more of the same. There will have to be a genuine circuit breaker, and perhaps – just perhaps – this might mean jumping outside the square, devising a new, exciting, even visionary approach. Anyone for a real energy policy?
After about 20 failed attempts, it is obviously time for one, and as the consensus moves inevitably away from coal and towards renewables, there just may be an opportunity now that gas, once the remedy for the transition, is being shown to be not a saviour but a Trojan horse.
It has always been argued that gas, while not a squeaky clean fuel, is a least a better bet than coal. But now it turns out that gas may be even dirtier, because the methane leaks that cannot be contained will probably nullify any advantages from emissions of coal.
Methane is a far more damaging greenhouse gas than carbon dioxide, so only a little can be a big problem. Add in the damage wreaked on agricultural land and, crucially, water supplies, and gas looks a lot less attractive than its proponents claim.
It has, however, one big plus: unlike coal power or renewables, gas can easily be turned on and off. But with the advances in batteries, this last advantage is becoming obsolete. As a former government chief scientist, Penny Sackett, points out, that ship has sailed.
The current Chief Scientist, Alan Finkel, is still a gas pusher, but he is becoming increasingly isolated: not just the environmentalists, but business and agriculture are jumping aboard the renewables bandwagon. And if it is not already, it is rapidly becoming not just the cleanest, safest, and most acceptable option available, but the cheapest.
Many in the coalition ranks will never be persuaded but the evidence is irrefutable. And what a coup for Morrison it would be if, on top of stellar polling, he could bring this one off – forget buggerising around with feasibility studies and inquiries to try to justify throwing taxpayer money at his bankers in the mining industry and embrace the science, engineering and even the economy he constantly invokes.
Of course it won’t happen. But he needs to do something, and quickly. He is already the leader who gave us the second depression in a century. If he is to salve his legacy, nothing less than another of his miracles will suffice.
Mungo MacCallum is a veteran political journalist and commentator. His books include Run Johnny Run, Poll Dancing, and Punch and Judy.
mungomccallum@staging-johnmenadue.kinsta.cloud
Comments
8 responses to “Falling into depression”
Mungo
While you are right about gas I see a subversive result. Gas plants, if built, (and that is a big if) will be fast start types like the Barker Inlet plant in SA. Unlike a coal plant they don’t need to keep running just in case, moreover, their fuel costs are quite high so if there is excess wind or solar they shut down.
The lowest cost way of replacing say Yallourn’s annual output at the moment is a combination of 1,600 MW of wind 1,800 MW of rooftop solar and 1,200 MW of large scale solar. That will generate slightly more energy per year than Yallourn, but there are periods where it is only generating 1/8th of Yallourn and other times where it is generating double Yallourn’s capacity but no-one needs the energy so that means if you are to close Yallourn you need at least 1,000 MW of dispatchable capacity/storage and even if it is all storage there will be times where some of the wind and solar is wasted.
Now most days 1,000-1,100 MW of backup for two hours will be more than enough, because periods of very low renewables always correspond with periods of restricted demand. Hot days are accompanied by large solar output and then sea breezes if not strong northerlies so 1,000-1,100 MW of backup will be enough.
However we do get long periods where renewable output is a little over half the average power i.e. over a year the above system would average 1300 MW and Yallourn averages about 1240, but we will get long periods where the system only averages 600-700 MW for two weeks. So to be sure than you can replace Yallourn you would need not 2,000 MWh but 800 x 336 MWh. If it was batteries you need a system that was six times the output and 1,400 times as much storage as the recently expanded Tesla big battery or more than Snowy II. If it was battery storage even at a 25% discount on Hornsdale it would cost $150 bn
One alternative is to put in 600 MW /1,200 MWh of batteries ($700 m) and 800 MW ($1,000 m) of fast start gas plants. The gas plant would not even start on most days but would run for about 1,000 hours a year at an average of 80% capacity so its emissions would be about 250-300,000 tonnes per year. Yallourn averages 15 m tonnes + much more NOx, SOx, heavy metals, unburned hydrocarbons and particulates. Thus for 1% of the cost you get 98% of the emissions reductions. As technology moves on gas use will fall but you still have the security of supply in emergencies.
Never let the perfect be the enemy of the good.
I’m glad you said that, Mungo, ‘Of course it won’t happen.’ Just for a moment there I thought….
Crikey Mungo, have you just woken up that gas is no bloody good? Simply, it is a fossil fuel, and therefore should play no part in the resurrection of the economy of Australia. There is also a world wide glut of gas, leaving behind ravaged landscapes scarred by fracking.
The problem in Australia is that we have a government that is willingly controlled by the fossil fuel industry, whose minions have infested Canberra like a cancer. Fortunately, this fossil fuel cancer is curable, but to do so will require a complete change of government, not only in Australia but in the USA.
As Kevin Rudd pointed out in an SMH article this morning, we need Biden to be elected to get the USA back in the Paris Agreement, and to put pressure on countries like China to stop using coal and fossil fuels so that climate change can be battled, something that Morrison has no wish or desire to tackle.
One good circuit-breaker to pull us out of the poo faster would be to face facts and BAN POKIES. They are responsible for an estimated loss of about 200,000 jobs in Australia every year…with businesses being starved, especially in regional areas. Since pokies are robotic and employ just 3 people per $1million taken…they employ very few people for all of the huge damage they do to taxpayers as well as communities!
If we spent that same $1million in other shops and businesses, instead of pokies that suck money addictively….Australia could employ up to 20 people in new, healthier businesses!
Dirty coal etc is only part of the problem we are now facing! We need a bloody good plan to create clean, healthy businesses right through the system. We need decent JOBS!
We cannot allow a wealthy gambling industry to kill communities any longer. It is also doubly worrying now that online sports gambling is taking hold! Pokies gamblers tend not to be sports gamblers so that market is growing independently no doubt. It is wrong to assume that online gambling has only grown while pokies have been shut down. New cohorts of gamblers, young working men have embraced sports gambling.
What will happen if both pokies AND online gambling grow in coming years?? We can no longer afford the “luxury” of destructive pokies. That is obvious…..but more than anything we need to license ALL gamblers, at least, if banning of pokies cannot be achieved! Simples!
We need a totally new business plan that includes far wider scope than “just” coal, or gas or other energies.
All this is true, but the real big catch is that pokies bring governments literally billions of dollars per year.
Billions that most governments badly need. And it is easy money as it depends on lots of suckers. Few governments have sleepless nights about the damage caused by gambling, as seem average Australians.
That’s where to start.
That is wrong. Governments lose from pokies! The political parties win from gambling industry donations. Blocking donations would be good. Taxpayers all lose! Pokies are a net loss for governments. You are only telling half of the story!
Well said – the Mungo-man!
But Mungo, think of the (carbon) donors. They need at least a $10,000 return per $1 of donations for the risks.
they took /sarc. We have not seen what Palmer’s payoff is going to be. He will be looking for several $ bill.