Energy policy has turned this country into a land of nonsense

I’m reminded of this book whenever I contemplate Australian public policy because Australia has descended into the land of nonsense. We’ve been through a few years when the government has been telling us we have to reduce dependence on fossil fuels. We have to invest in renewables. We have to increase the price of fossil fuels to make them less attractive and cross-subsidise investment in windmills.

We’ve been told that for years, and many people have been persuaded that by doing this we’ll somehow change the weather. What’s more, we are told we have to move away from carbon-emitting industries because that, too, will change the weather. So instead of emitting carbon dioxide from our own industries, we have moved to importing products that in their production are high carbon emitters.

Since global warming is a global phenomenon, how does that make sense? We produce only between 1 and 1.3 per cent of global emissions. Nothing we do is going to make the slightest difference to the global climate. Sure, we should make a contribution to a global effort to reduce carbon dioxide emissions, but not a disproportionate effort that will be all costs and no benefit.

What is incredible is so many people believe that by building more windmills and solar panels we will stop bushfires and floods. And, quite apart from anything else, we believe by doubling up on our energy production and thereby reducing productivity in the electricity sector this would somehow bring prices down. That’s nonsense: using intermittent renewables, and having to back them up with coal and gas, has increased the price of electricity, not reduced it, and it’s obvious why. The renewables don’t give us 24/7 electricity.

We need to maintain coal and gas-fired generation to produce constant energy but we have reduced the output of those power stations. We have to run two energy systems where once we ran one. The government says we have a productivity problem in Australia. It’s the government that is causing it. Productivity in the electricity generation sector has declined by 30 per cent across the past 20 years. You see what I mean by nonsense.

Then the Iran war came and we saw more nonsense. Once upon a time, Anthony Albanese was running around the world telling everyone we had to reduce our dependence on fossil fuels. Now he’s climbing on board his fossil-fuel driven aircraft and flying from country to country, begging them to maintain supplies. Yes, you guessed it, supplies of fossil fuels.

At home we’re told we need to move to electric cars, and the government has been subsidising electric vehicles in many ways to make them cost competitive with petrol and diesel cars. While there are heavy excises on petrol and diesel, EVs are free of that impost. What has happened in the past few weeks? The government has reduced the tax on petrol and diesel, but surely an increase in the price of petrol and diesel will encourage people to move towards EVs. Introducing subsidies now for all forms of transport is just nonsense.

Then there are the steelworks and the smelters in South Australia and Tasmania. By increasing the price of electricity – and steelworks and smelters need electricity – these fossil-fuel dependent industries have become decreasingly competitive.

Surely that’s good. That’s what the government wants: to get rid of industries that are big carbon dioxide emitters. These industries are subject to the so-called safeguard mechanism that limits their carbon emissions. If they exceed those emissions, they pay a penalty.

Once these industries struggled financially, what does the federal government do? It introduces subsidies for these industries to keep them going.

The government and its counterpart government in South Australia are spending around $2bn to keep the Whyalla steelworks going. Subsidies also are being poured into smelters.

In the world of nonsense, no one does a cost-benefit analysis before spending money. Take Snowy 2.0. It’s now estimated the total cost of the project could be as much as $40bn. That is just a staggering amount of money, which even a wealthy country such as Australia can ill afford. Snowy 2.0 is essentially an electricity storage system, like a huge battery. That’s fine, but at $40bn it’s just a staggering waste of money.

Not surprisingly, much of the world thinks Australian energy policies are just nonsense. How is it that a country so rich in coal, gas and uranium has its Prime Minister flying around begging for energy from neighbouring countries? Australia has substantial reserves of oil as well, but they’re not being exploited.

The Dorado field off the coast of Western Australia is said to contain 155 million barrels of oil. Because the federal government is against fossil fuels (or it used to be anyway), that oilfield is lying fallow. And when it comes to gas, we are one of the world’s two biggest exporters of liquefied natural gas. But our governments, state and federal, have been restricting the exploitation of gas. Victoria, which has huge reserves of gas underground, is building an LNG receival terminal. That’s just nonsense.

Finally, there is uranium. We export uranium and we have the world’s largest exploitable reserves of it. However, uranium mining is apparently controversial. But it’s fine to export it from designated places. We’re happy to provide fuel for nuclear power stations abroad but opposed to nuclear power stations at home. Our government is happy to have nuclear reactors in submarines but it thinks nuclear power is too dangerous as a source of electricity.

You see what I mean? It’s another example of a country that is descending into nonsense. In 50 years, historians will look back at what we were doing during the 2010s and 2020s and think we had gone slightly mad. I think they will be right.