Morrison’s Energy Trifecta

According to Scott Morrison’s energy speech, delivered in the coal-dependent Hunter Valley, the gas-fired recovery is an overarching policy framework with three intersecting pillars. These are: an intervention into how Australia generates electricity, enhanced state support for gas extraction, and deeper support for transnational oil corporations in the name of fuel security.

The energy pillar of Morrison’s plan itself has three components. Firstly, Morrison called on “the market to deliver 1,000 MW of new dispatchable capacity by the summer of 2023–24.” For Morrison, dispatchable power means either coal, gas, or pumped hydroelectric batteries.

Secondly, he set an April 2021 deadline for investment decisions, promising that if the market failed to respond, Snowy Hydro (a government-owned electricity company) would itself build a gas generator in the Hunter Valley. Morrison also promised a series of upgrades to the transmission system, promising to create “over 5,000 jobs.”

Morrison justifies upgrading the transmission system and “dispatchable generation” as a necessary step in securing the transition to renewable energy. And he is careful not to denigrate renewable energy, instead claiming that fossil fuels are necessary to stabilize renewables. It seems as if the federal government is quite content for a privately owned renewable energy bubble to swell up within, and subordinate to, the fossil fuel bubble.

The final component of Morrison’s energy trifecta is “the biggest shake-up of the National Electricity Market since it was created in 1998.” Aside from platitudes, the only substance behind this is a promise to ensure “a resilient energy system through a balanced mix of technologies.” It’s code for locking in fossil fuels, even as the renewable share of generation grows. The lack of specificity is the point: it sends a signal to coal and gas companies to come up with a wish list of regulatory changes for continued profitability.

Getting the Gas

“We’ve got to get the gas” was Morrison’s predictably blunt preface to the second, gas-focused leg of his energy plan. Also consisting of three parts, Morrison’s plan aims to make gas available to manufacturers for heating in industrial processes, but without eating into the profits of the extractive sector.

The first element is to allocate greater public funds to support new gas supply. There is an intuitive free-market logic at work here; increasing supply should lower the cost of a commodity. Except that this is the exact opposite of what has happened. As Australia expanded gas production, becoming a globally significant gas exporter, domestic gas prices increased significantly. Domestic customers, including manufacturers, were forced to compete with the global market.

Hence the second element of the gas plan, a “prospective gas reservation for domestic use.” “Prospective” is the operative word. The gas reservation entails a double mechanism, partially decommodifying gas while increasing production. The intent is to tie manufacturers to potentially cheaper gas prices at some point in the future, provided they buy into expansion today.

The third leg of the gas plan is simple: more public support for gas infrastructure, particularly pipelines. This is dressed up as a “National Gas Infrastructure Plan.” At a time when Australia should be transitioning away from fossil fuels, the gas pillar of the national energy plan is designed to both deepen industry’s dependence on gas and lock in new infrastructure.

Australia’s Extractive Oligarchy

The third pillar of the Morrison government’s energy plan, fuel security, is often overlooked, even though it is critical to the ongoing profitability of fossil fuel assets. Much like the first two pillars, at its core, the fuel security plan involves the transfer of public money to fossil fuel corporations. Here, however, there are only two key points.

The first is a plan to build “an additional 780 million liters of liquid fuel storage in Australia.” The second aims to maintain fuel refining facilities. Over the last decade, three of Australia’s seven refineries closed, taking hundreds of good union jobs with them, and making Australia reliant on importing refined fuel products from East Asia.

Morrison’s renewed emphasis on domestic refineries clearly stems from concern about growing regional competition with China. It’s essentially a national security decision made in light of the Liberal Party’s desire to prolong the profitability of fossil fuel assets. The upshot is that American and European multinational corporations will be paid to maintain Australia’s four remaining fuel refineries.

Entrenching Fossil Capital

In short, the energy plan will entrench fossil fuel dependence in electricity, heating, and transport while maintaining extractive capital’s hegemony. Taken together, Morrison’s promise of new jobs in infrastructure, his talk about cheaper energy costs for households and industry, and the possibility of a new publicly owned electricity plant amount to a multibillion-dollar guarantee extended to fossil fuel corporations.

It’s a devilishly smart plan to offer workers some improvements (jobs, lower gas prices) while giving extractive capital everything it wants. It is, simply put, a triumph of profit over people and the planet.

This isn’t just the product of malign influence from the outright climate-change deniers who saturate the Coalition’s ranks. Nor is the issue a lack of political leadership. Rather, the government is acting at the behest of extractive capital, whose power to dictate policy has only grown since the mining industry toppled Labor PM Kevin Rudd as revenge for his attempt to take some form of climate action.

Increasingly, the Australian state resembles nothing more than an executive committee for the mining industry. Morrison’s chief of staff, John Kunkel, is the former deputy CEO of the Minerals Council of Australia. Nev Power, former CEO of Fortescue Metals, chairs the National COVID-19 Commission Advisory Board (NCC).

The NCC was set up expressly to advise the government on its economic recovery policy during and after COVID-19. Andrew Liveris, a current director for Saudi Aramco, was one of the most high-profile early members of the NCC. Morrison named Liveris twice in his energy speech, crediting him with having sat down at the prime ministerial residence, and telling him: “You’ve got to deal with gas.”

Beyond the revolving door of executives and political appointments, extractive capital’s influence runs deep into the corridors of governmental power.

The Progressive Response

Predictably, the small-l-liberal and center-left response to Morrison’s energy plan played right into the prime minister’s hands. Former Liberal opposition leader John Hewson criticized the “irresponsibility” of the plan, suggesting that it was not an example of “evidence-based policy.” Labor opposition leader Anthony Albanese attacked it as “a plan to have a plan.”

These criticisms are divorced from day-to-day life. Most people won’t take the time to read the prime minister’s speech or any of the supporting documents. Voters are not rational market actors who weigh up policy options. Criticisms of the plan as inefficient or irrational are destined to become background noise, signifying nothing.

Worse, by attacking the lack of detail in Morrison’s plan, his critics allow the government a simple rejoinder: adding more details. In light of this, funding line items in the federal budget becomes its own achievement.

Indeed, this is exactly what happened: the 2020 budget included a number of items that will expand the country’s fossil fuel infrastructure. It pledged $52.9 million to “unlock gas supply,” $50 million for carbon capture and storage, and $250.7 million split between increasing domestic oil-storage capacity and paying multinational corporations to keep domestic refineries open. The budget also included an un-costed line item to maintain a coal-fired power plant in the Hunter Valley.

Far from being irrational, the federal government’s plan to keep fossil fuel infrastructure profitable for as long as possible by shoveling money to extractive capital seems coherent enough on its own terms.

Plowing the Sea

Moreover, those who attack Morrison’s energy plan for its supposed irrationality implicitly affirm that the market should lead the transition to renewable energy. Albanese went so far as to state that “Labor believes that the best allocator of resources is markets,” criticizing Morrison’s plan as “some Brezhnev era, state-socialist model.” The market, however, has not delivered. The climate emergency is a market failure so large that it jeopardizes an ongoing civilized existence for billions of people.

These criticisms attack Morrison’s energy plan on neoliberal grounds — they are a dead end. Working-class people know instinctively that the market has not worked and will not work for them. In its operation, the National Electricity Market testifies to its own failure: it is a constant market intervention consisting of multiple regulators and thousands of pages of regulations that have been revised 150 times since it was established in the late 1990s.

Trying to make an artificial market deliver corporate profits and reduce carbon emissions at some future stage is as hopeless as plowing the sea.

A Socialist Strategy for the Climate Crisis

The present reality is daunting. The climate emergency is an existential threat to a decent society. And yet extractive capital dominates the Australian state. This is compounded by the relatively ineffectual opposition from progressive actors and other factions of capital, as well as the historic weakness of the organized left. Nevertheless, as this year has shown, capitalism is both dynamic and unstable — and working-class resistance can arise quickly.

There are businesses pushing for stimulus funding to go toward renewable energy. Australian capital in general is not unanimous in its support for the government’s extractive agenda — and this can open up new possibilities. Socialists can take advantage of this by pushing for a transition to renewable energy and by backing mutually acceptable reforms.

To this end, the very real policy divisions within Labor’s parliamentary cohort should not be read as a conflict between inherently conservative, pro-coal working-class voters and progressive inner-city professionals. Rather, Labor’s divisions are a parliamentary reflection of capital’s divisions. The Labor vote tends to be strongest in areas where extractive capital is economically less influential.

The Green New Deal is the most promising framework for the reforms sought by liberals and socialists — it’s a sort of twenty-first-century popular front for climate and democracy. The Real Deal report, authored by the policy lab at Sydney University, provides strong examples of institutions attempting to realize a Green New Deal–inspired approach in the Australian context.

While making common cause with progressive environmentalists, socialists must nonetheless stand firm in our vision for a new society and in our commitment to organizing workers’ collective power. We should pair our strong commitment to energy democracy and bringing power back into public hands with practical, prefigurative projects such as Cooperative Power (a union- and community-owned electricity retailer).

The bedrock of lasting, deep transformation is the collective strength of workers, built through organizing and struggle. That’s why it’s essential to back workers who are fighting both to protect their incomes and to build a new energy future — for example, oil refinery workers in Melbourne. There is also a broader opportunity to build on the recent wave of COVID-19 safety stoppages and to employ similar strategies in light of extreme weather events. To this end, the United Workers Union is investing in worker training on safety rights.

Recipes for the kitchens of the future have their place, of course. But any reasonable hope for climate justice depends on the practical, collective cooperation of people at work and in their communities.