Carbon Tax – part 2 and Energy Security

Carbon Tax – part 2 and Energy Security

Posted 11 May 2012

Carbon Tax policy of the federal government lacks cohesive policy detail and vision to enable a clean energy future. The $23 tonne carbon tax is predominately aimed at providing compensation to the majority of Australians rather than establishing a clear pathway to a healthier economy and environment.

The carbon tax primarily targets the 500 most carbon polluting businesses, who could still continue to pollute and pass costs onto the consumer. The policy lacks incentives, such as a feed-in tariff; to actively encourage clean energy generation, as occurs in Spain and Germany.

It is a huge leap of faith by the federal government to believe that industry on its own will deploy clean energy generation on a mass scale necessary to abate greenhouse emissions. The likely scenario is that industry will move towards utilising another fossil fuel – natural gas as an alternative to coal.

Whilst natural gas generally is cleaner than coal: natural gas (ie. thermogenic gas) obtained from fracking process, such as shale gas deposits and coal seam deposits using a fracking process unleash methane gas, which initially is 25 to 33 times a worse greenhouse gas than CO2  over a hundred year period. Over a 20 year period, methane is regarded as 72 (and according to research published by NASA in 2009; 105 times worse greenhouse gas than CO2 .) (1) It is considered that natural gas obtained by fracking process, such as in Bowen and Surat Basins in Queensland, is as bad for it’s greenhouse effect as burning coal (2)

There are also environmental concerns with use and extraction of thermogenic gas. (3)

Whilst the increased use of natural gas may or may not contribute to a cleaner energy future. It does not constitute moving towards a ‘clean energy future’ (through adopting clean fuels like solar, wind, etc.) as extolled in the Government’s spin.

What is a concern, is that investments in natural gas infrastructure will lock us in to using this fossil fuel in the future and divert investments in renewable clean energy technology. (4)

What is missing from the Australian federal government’s carbon tax plan is a comprehensive and innovative strategy to minimise greenhouse emissions, whilst encouraging prosperity of the nation.

We suggest that funds be directed to develop alternatives to importing foreign fossil fuels at a cost of $15 billion+ per year and rising to $30 billion in 5 years, which contribute to the wealth of overseas nations. Such as working with car industry to specifically develop vehicles that could be run on bio-fuels, such as ethanol and bio-diesel and electric vehicles (with bio-fuel motors that generate electricity to extend range of the vehicle). (5)

Qantas, with a fuel bill of $4 billion dollars is investing research monies overseas into bio-diesel production for its aircraft fleet. (6) Qantas has recently powered an A330 plane using 50-50 blend of traditional jet fuel and bio-fuel made from recycled cooking oil (7) sourced from (McDonalds) restaurants in the USA. Using imported bio-fuel from USA, the reduction in carbon emissions is about 60 per cent; up to 80 per cent savings on carbon emissions is possible using Australian sourced bio-fuels. (8).

Use of Australian produced bio-fuels would mean that money and jobs would stay in Australia and that we would be less dependant on foreign fuel imports. This would assist in making our aviation industry more sustainable, particularly with turmoil that exists in the middle east and other oil exporting regions.

The Federal Government’s draft ‘Energy White Paper’ lacks vision and proper assessment of our energy security. It disregards the effects of looming closures of our oil refining capacity in the Caltex’s Kurnell & Lytton plants and Caltex’s Clyde plant. This would leave only four oil refineries remaining in Australia. According to Des King, former managing director of Caltex Australia: “Retaining a substantial oil refining capability is essential to Australia’s energy security.” (9) Yet the Government believes that we can continue to be reliant on imported liquid fuel without concern about our energy security. (9)

The Energy White paper outlines an investment of $240 billion in electricity and gas infrastructure will be needed to meet energy demands over the next 20 years. (10) The paper is biased towards the extraction of Australia’s gas and coal seam gas resources to meet our energy needs. We believe the Energy White Paper suggestion of further privatisation and removal of consumer price regulation will only exacerbate the price of energy in the future.

The Federal Government’s rhetoric about a ‘clean energy future’ is contradictory to media reports regarding the position adopted by Energy Minister Martin Ferguson, calling for government regulation that encourages investor confidence. Meaning we need to make the conditions attractive (more profitable) to attract sufficient investors in our energy sector. Mr Ferguson is said to regard clean energy is costly and requiring government assistance or subsidy. (11) What Mr Ferguson does not acknowledge is the substantial subsidies paid to support the use of fossil fuels by the government. (12)

According to The Sydney Morning Herald (AAP): Mr Ferguson regards extracting our gas resources will be a priority for the Government. And said

“The development of Australia’s gas reserves over the next decade will be critical – not just for export but also for our domestic objectives,” (9)

Furthermore, all monies raised from Carbon Tax or Cap and Trade system needs stay in Australia and not reinvested in some questionable overseas carbon abatement scheme through investment bank with large administrative costs.

Such monies should go towards creating carbon offsets here in Australia; preferably in Government enterprises or significantly owned Government enterprises, such as production of bio-fuels through waste materials, algae production or cropping on marginal land; or towards hardwood production that would generate a future financial return, particularly with the increased deforestation that has occurred around the world to accommodate population growth and increasing food production.

There are many benefits from the development of bio-fuel production and electrification of light vehicles: they can be carbon neutral, reduce monies going overseas and create wealth and jobs in Australia and provide wealth in selling of carbon permits in the Australian and overseas markets.

What Australian’s need is a cohesive policy detail and vision to enable a clean energy future and one that will increase the prosperity of Government and its people. Which will not necessarily be achieved through the current carbon tax policy introduced by the federal labour government.












Picture source:  thewritingzone, Flickr/CC BY-SA