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Change in Energy Minister could send bad signal

December 13, 2018
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In the past, it has been considered normal to combine the Ministerial portfolio of Energy with the separate portfolio of Mines and Petroleum, giving both responsibilities to the single Minster - at least here in Western Australia.

In the past, this pairing made some sense because most (if not all) energy was derived by burning coal or petroleum products such as gas, oil, or diesel. The role of the Mining and Petroleum Minister is to support and promote the development of the mining and oil and gas sectors. This fitted with managing energy because the mining of coal and the extraction of oil and gas provided the inputs for our energy system, which required these fossil fuels to keep the lights on and the factories in operation. More coal mining and oil and gas extraction meant more fuel became available, which helped deliver cheaper energy. In other words, the objectives of these portfolios were in complete alignment.

Today, with climate change a central issue in energy policy and renewable energy becoming cheaper than fossil fuels, the situation is very different. The urgent imperative to respond to climate change and to meet renewable energy targets means we must actually reduce the amount of coal and gas in our energy mix - not expand it. And because renewable energy is now able to supply energy cheaper than coal or gas, the job of keeping energy prices down requires the replacement of fossil fuels with renewable energy. This should include measures such as support for household and commercial scale solar installations, commissioning of large-scale wind farms, and policies to bring batteries and other forms of energy storage online to capture excess renewable energy generation and make it available when needed.

In other words, the task of today’s Energy Minister might be described as diametrically opposed to the task of the Mining and Petroleum Minister. So putting these portfolios together no longer makes sense like it did in the past. But the ‘minor’ portfolio reshuffle announced by Mark McGowan today has done just that - handing the Energy portfolio to Bill Johnston, Minister for Mines and Petroleum.

Minister Johnston will now have to wrestle with the tension of these very different objectives in his new role. On one hand, Johnston will have a coal mining and petroleum sector lobbying him, expecting that as the Minister responsible for their sector, he will ensure these industries remain viable into the future by retaining and even expanding their role in the energy mix. On the other hand, he will have thousands of households and businesses knocking on his door, wanting access to cheaper, cleaner energy, asking him to lead the transition away from fossil fuels and embrace the renewables revolution as the Minister for Energy.

While in opposition, Bill Johnston held the shadow Energy portfolio. Despite the WA Labor policy platform calling for renewable energy targets and measures, Johnston did not support these policies, and as a result they did not become the policies of the McGowan Government. Instead, in government Minster Johnston stood in the minority as a strong advocate for gas fracking, which is to be expected given his role as Minister for Mines and Petroleum.

Given his previous positions while Shadow Minister for Energy, and his recent focus as Minister, handing the Energy portfolio to Johnston may send a bad signal to energy consumers, people who want to see action on climate change, the renewable energy sector, and any business or household hoping for lower energy bills in the future.

Johnston will have a key test ahead of him – will he support the transition to affordable, clean renewable energy that so many Western Australians are calling for? Or will he maintain his position in support of expanding oil and gas production, setting policies that promote the development of a new gas fracking industry, and ensuring that energy prices remain high enough to support this industry?

Perhaps instead, the Minster will deftly deliver a win-win solution for the climate, for energy consumers, and for the mining and resource sectors. This will require an acknowledgement that expanding fossil fuel extraction is not a viable pathway for the state, instead shifting focus to our natural advantages in other minerals and mining developments, which could benefit enormously from the transition to cheap, clean renewable energy.

Leading economist Professor Ross Garnaut has pointed out that the combination of WA’s world-leading renewable energy resources with our world-class mining, minerals, and engineering sectors could see WA become the global destination of choice for mineral processing using cheap, clean renewable energy. The development of a lithium and battery metals mining and processing industry here in WA also has great potential as part of such a renewable energy-powered future.

Not to dismiss the other environmental impacts from these industries (which can be significant), it does present a possibility for how the Energy and Mining portfolios do not necessarily need to be in complete tension. In taking this win-win pathway, the central challenge for Minister Johnston will be to shift his attention away from supporting the further development of the fossil fuel and fracking industry, which has been a central focus of his role as Minister for Mines and Petroleum so far.

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