Australian Politics

The theology of gas: LNG bad, LPG good

Keeping up with the Greenie religion

It is a little-known fact that liquefied petroleum gas (LPG) is not included in Victoria’s natural gas (LNG) phaseouts, which means the clean, green gas will play a major role in Australia’s pathway towards net zero carbon emissions.

This is why Brett Heffernan, CEO of Gas Energy Australia, was optimistic about the potential of LPG in powering homes across the country.

“From our perspective, there’s nothing but upside,” he told The Epoch Times. “Not a lot of people know what’s happening in Victoria, and it’s fair to say the Victorian government isn’t singing it from the rooftops.

“But in terms of the ban on new gas connections that came into effect from Jan. 1, LPG is exempt.”

According to Gas Energy Australia’s website, “green gases will transform how we work, relax and play, ensuring families and businesses can continue to reliably and affordably use gas—renewable, zero-emitting gases—to 2050 and beyond.”

The industry already generates over $121 billion (US$81 billion) in economic activity, while fuelling 7 million homes.

LPG differs from liquefied natural gas (LNG) in its composition and contains double the energy content of natural gas, making it cheaper in many cases.

Government’s Bid To Phase Out Natural Gas

The CEO added that state governments—particularly the Victorian government—have “made it pretty clear that they see no future for natural gas in residential and commercial settings.”

“They see natural gas being used purely and simply for industrial uses, and as backup for electricity generation.”
Under the Victorian government’s Gas Substitution Plan, natural gas connections are banned in all new estates from Jan. 1 of this year.

However, the state Liberal opposition criticised this restriction as one that would only add to the national cost-of-living crisis.

“Premier Jacinta Allan and Energy Minister Lily D’Ambrosio are oblivious to the pain of Victorians during the cost-of-living crisis that Labor has made worse,” Shadow Minister for Energy David Davis, said as the new law came in.

“Their new gas plan will hit families and small businesses even harder, forcing up energy costs further, as Victorians pay the price for Labor’s mismanagement.”

What Does LPG Do?

LPG is a fuel gas that contains a flammable mixture of hydrocarbon gases, specifically propane, n-butane and isobutane. It is used in heating appliances, cooking equipment, and vehicles.

Clean, odourless, and colourless, LPG is typically 85-90 per cent methane, which contains less carbon than other forms of fossil fuels.

“And what that means is when you burn it, the only C02 that gets emitted is the C02 that you took out of the atmosphere to make it in the first place,” Mr. Heffernan said.

It Does Have Its Critics

Despite being a source of clean energy, not everyone is convinced that LPG is the way forward to power homes or cars.
Environment Victoria CEO Jono La Nauze stands against all forms of gas usage on Australia’s net-zero journey.

“Pretending gas is a climate solution is a throwback to the Scott Morrison era and is straight out of the gas lobby playbook,” he said in a statement.

“Gas is an expensive disaster for our climate and our health. We already know that burning gas at home has health impacts on the level of second-hand smoke and is responsible for 12 percent of all childhood asthma in Australia.”

While the Climate Council has echoed similar figures and has consistently opposed any future gas development in the country.

https://www.theepochtimes.com/world/gas-energy-ceo-optimistic-about-lpgs-future-amid-victorias-gas-phaseout-5680652

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High Taxes Slowing Down Housing Construction

If house prices are so high, why aren’t the private developers out there, with or without government help?

Well, some of them are, but not in the numbers we need when we are importing the equivalent of a Canberra each year.

The reason why they aren’t able to cope, apart from the sheer immensity of the task, is the way states have loaded their tax systems onto the housing sector.

They do this via stamp duty, land tax, and infrastructure charges which interact not just with house prices, but with availability as well.

Some states also tax the uplift in value of rezonings, making it unprofitable to develop.

Stamp duty, which is levied on the value of a house when it is sold, makes it harder for people to buy, and less likely to move once they have.

State governments tend to discount stamp duty for first home buyers, then claw the foregone tax back from second and later home buyers and investors. This discourages down-sizing and moving for work.

Land tax has an impact on development and investment.

It’s an efficient tax and Adam Smith, the father of modern economics, favoured it more than other taxes. But we only levy it on investors, and at high rates, starting at some threshold, generally around the median house price.

For investors, this means that the first rental property they own probably falls below the land tax threshold, but the second one will take them above it. This changes the investment math and discourages landlords from owning more than one property.

If people are going to be renters, they need someone to rent from, but this tax structure encourages that potential landlord to invest anywhere but housing after their first housing investment.

It also penalises developers because it makes the cost of holding land more expensive.

State governments also tend to tax overseas investors more heavily than local ones.

Capital only speaks one language, the language of commerce, and penalising it because it comes from overseas is absurd.

Only Big Developers Stand a Chance

But the really big problem is in infrastructure charges. While infill development—development in existing urban areas—can meet some of the demand, broadscale subdivision is where the real grunt comes from.

The land available for this sometimes comes in very large parcels. North Lakes in Brisbane, for example, was a pine plantation. And sometimes it is fragmented amongst a large number of small landowners.

North Lakes needs a very large developer. The original developer wasn’t large enough, went bankrupt, and almost took his financier Elders Lensworth down with him.

They are now the joint venturer in the project with Stocklands, an even larger developer than the first.

One of the reasons it takes a large developer isn’t just the size of the parcel, but the fact that the state government loads all the infrastructure costs onto the developer—things like upgrading highways, road intersections, water, sewerage, electricity, and social infrastructure.

This adds billions to these large developments that have to be outlaid before a single house block has been sold, so only really large developers can undertake the project, and they have to load the costs onto the house buyers.

If the land is not in large parcels, by definition it is fragmented.

Here the problem is that unless you can amalgamate an impossibly large number of properties, no one can afford to pay for the trunk infrastructure required to unlock the land, so it remains sterilised from development.

These infrastructure costs should be regarded as an investment by the state in the development.

As they are currently structured, the developer passes the cost onto the buyer who pays the capital cost upfront for facilities that they will then be charged a fee, incorporating a provision for depreciation of the asset, which means they pay twice over for using infrastructure.

Our States Must Become Competitive Again

What this country desperately needs is for one state government to implement a revised tax system that doesn’t penalise developers or new home buyers, and returns us to the competitive development markets that we had in states like Queensland as little as 30 years ago.
This would re-introduce competition into the market as smaller developers could compete against mega-developers.

https://www.theepochtimes.com/opinion/state-budgets-tinkering-around-the-edges-of-our-housing-crisis-5675484?ea_src=au-frontpage&ea_med=top-news-opinion-australia-0-title-0

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Labor’s FMA gambit nothing more than crony capitalism ‘on steroids’

Judith Sloan

Last week Jim Chalmers introduced the Future Made in Australia Bill into parliament. It is a cross between Trumpian chest-beating and old-style government picking winners. It smacks of crony capitalism cloaked in an unconvincing rationale about the “global economy being transformed by the net-zero opportunity”.

In reality, most of the FMIA is simply repackaged policies jammed into a box with a new title. The political reality is that one of its main components, the National Reconstruction Fund with its $15bn of funding, was not cutting through with the electorate. There has been so little commercial interest in the NRF, notwithstanding the “free” government money on offer, that the understandably infrequent board meetings were not going to meet the required number of meetings under the law.

While there may be general public support for stuff being made in Australia, the actual content and the speed of delivery of this initiative are likely to leave voters feeling dissatisfied. The Treasurer is kidding himself when he talks about Australia’s advantages of “our industrial resources, skills and energy bases and our attractiveness as an investment destination”.

The truth is that we have high labour and energy costs, our electricity system is becoming unreliable and our resources are hardly unique.

One of our key comparative advantages is the extraction of iron ore, coal and gas, but these commodities are of no interest to the government, although it is happy to receive the tax dollars.

Of course, no one would deny that “the world is changing and the pace of change is accelerating”. But Chalmers needs to keep up with the latest developments before he makes unfounded claims about the potential for renewable energy to form the basis of our future industrial development.

The markets for most critical minerals have tanked recently, particularly nickel and lithium. Green hydrogen is going nowhere overseas and even less so here. All that talk about Australia being a renewable energy superpower is just that – talk.

The balance of overseas developments involves a shifting away from net zero, although there is a noticeable uptick in investment in nuclear energy, something the Albanese government simply refuses to acknowledge.

The conservative opposition in Canada is likely to win the next election and is pledging to rescind its carbon tax. If Donald Trump become US president again, he may seek to withdraw from the Paris climate agreement (again). There will be considerable support for the fossil fuel industry in the US, support that was reduced only marginally under the Biden administration.

Post the EU parliament election, climate policies are being furiously adjusted in several countries, including Germany.

To be sure, the new Labour government in Britain will be full steam ahead with the promotion of renewable energy but the country accounts for an even lower proportion of global emissions than we do.

And, of course, China, India, Russia and most developing countries pay lip service to net zero at best; many simply ignore it. Affordable and reliable energy is a much higher priority than some ephemeral commitment to net zero in several decades.

The Treasurer also appears to be strangely bad at numbers. And the numbers relevant to the FMIA are worth looking at.

For example, in the latest Integrated System Plan released by the Australian Energy Market Operator, it is estimated that an additional 25,000km of high-voltage transmission lines will be required for Australia to become a renewable energy superpower. This is both extraordinarily expensive and impractical.

Then we come to green hydrogen and the scope to make green steel, another pipedream of the government. The numbers simply don’t add up, even though the government has estimated that $6.7bn across 10 years will be spent on production subsidies in addition to $2bn for the “hydrogen headstart” program.

Consider this example. For four million tonnes of green hydrogen to be produced annually at the Gladstone, Queensland hub, 110 gigawatts of renewable energy will be needed. Bear in mind that the total capacity of the entire east coast national electricity market is a tad over 54GW. To achieve this, 10,000 wind turbines will be needed around Gladstone as well as 2500sq km of solar panels. In other words, it ain’t going to happened.

Alan Kohler has also worked the numbers. According to his calculations, “the estimated cost of $670m per year would subsidise 335 million kilograms of hydrogen at $2 per kilogram, which would make five million tonnes of steel requiring eight million tonnes of iron ore. That’s 0.84 per cent of Australia’s iron ore exports … and hardly worth doing.”

The reality is that the early hype of green hydrogen has now died down. The idea that Australia could become a major exporter of green hydrogen is highly unlikely, with the use of intermittent power ill-suited to power expensive equipment 24/7.

The only bit of good news with the FMIA scheme is the expected outlay is just under $23bn across 10 years. By the standards of government programs, this looks relatively modest.

To be sure, there are some serious risks – the uncapped nature of the production subsidies and tax credits is one example.

But the real damage is the message that it sends to investors: don’t bother seeking out profitable opportunities that can meet customers’ needs as well as make money; head for Canberra to seek handouts.

The distortion to the allocation of capital is the real cost of these wrongheaded interventions, a lesson that was learnt in the past (think WA Inc, the Victorian Economic Development Corporation, and so on) but has been unlearnt by the Albanese government.

The initial cabs off the rank under the FMIA are particularly dispiriting, including throwing close to $1bn at a solar panel manufacturing plant in the Hunter Valley. The market for solar panels, which is dominated by China, is extremely competitive and oversupplied, with low or negative returns for operators.

The idea that Australia has a comparative advantage in solar panel manufacturing is completely fanciful.

The decision to spend another $1bn on a US-based infant quantum computing firm is equally depressing. Awarded without any formal competition or explicit guidelines, this grant has all the hallmarks of potential disaster, particularly as we are being told that there may be a few jobs in Queensland but the main benefit will be our right to use the computer, if it ever works.

In a recent article in Nature, it was noted that while “scientists are exploring the potential of quantum machine learning, (it’s unclear) whether there are useful applications”.

The bottom line is that the world may have changed but the economic rules are essentially the same. Offering massive subsidies to selected firms within preferred industries is not a game we should play. The Treasury should be telling the government this, but its officials are strangely silent – even supportive. It is simply not possible for governments to pick winners, but losers are very good at targeting governments.

https://www.theaustralian.com.au/commentary/labors-fma-gambit-nothing-more-than-crony-capitalism-on-steroids/news-story/6b64f9e2dce7ece2abd5a782e6e5c937

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‘Curriculum wars’ are distorting history for political advantage

The desecration of the memorials to our fighting men and women in Canberra is a physical manifestation of the broader cultural conflict that is currently afflicting our nation.

The delinquents who committed these acts of vandalism are part of a nihilistic movement that seeks to dismantle the modern state of Australia through activism, statue toppling, and the eradication of a positive narrative about Australia from the history books well as from public consciousness.

One of the main battlegrounds in this conflict is our education system, which has been designed to produce exactly the type of individual who will arm themselves with an angle grinder, don a balaclava and attempt to saw through the ankles of Captain James Cook’s bronze likeness in order to punish him for being a “racist coloniser”.

From childcare onwards, Australian children are being funnelled through a depressing pipeline of propaganda that depicts this country as being racist. Recent research by the Institute of Public Affairs has revealed that the government-mandated Early Learning Framework tells toddlers this nation is so fractured that their role in life is to mend it by being active citizens in the journey of reconciliation.

The Centre for Independent Studies' Peter Kurti says we need to ensure the school curriculum and teaching of history don't try to “sidestep or tear down” our past and identity but help children come to terms with it.

In the syllabus entitled “Belonging, Being & Becoming”, we learn that “early childhood education has a critical role to play in delivering this outcome and advancing Reconciliation in Australia”. It is expected that educators should not only recognise “diversity contributes to the richness of our society and provides a valid evidence base about ways of knowing” but also that “for Australian children it also includes promoting greater understanding of Aboriginal and Torres Strait Islander ways of knowing and being and actively working towards Reconciliation”.

Educators are also encouraged to decolonise early childhood education. They are to reconsider “education spaces, which focuses on acknowledging colonisation and its continued impacts, while seeking to disrupt and reconceptualise colonial understandings”.

Decolonisation might involve “critically reflecting on existing curriculum, resources and practices, and considering whether they serve to sustain or privilege colonial narratives and how they can be reconsidered to make visible Indigenous and First Nations perspectives”. Toddlers are able to spot the Indigenous and Torres Strait Islander flags at a hundred paces, but they have no idea what that red, white and blue flag is in the corner.

Thanks to the addition of the Aboriginal and Torres Strait Islander Histories Cross Curriculum Priority in our National Curriculum, the single narrative currently taught to primary and secondary school students is that Australia was founded on racism, and that the arrival of the First Fleet in 1788 resulted in dispossession and genocide.

It is no coincidence that the Acknowledgement of Country ceremonies are becoming more elaborate and increasingly performative by the day. It recently came to light that students in a Sydney primary school start their day by putting their hands on the ground and repeating “always was, always will be Aboriginal land” before each assembly. In a Victorian school it was uncovered that the “Aboriginal national anthem” was being played in lieu of the official version for assemblies.

In our universities, Australian history as a discipline has been enlisted to support political causes by academics. Those who teach at university today seem more concerned with rewriting the past as a way of empowering minorities and the oppressed than they are with constructing a narrative motivated by professional rather than political concerns.

While the abuse of history for political advantage is hardly a new phenomenon, the current movement threatens to destabilise us by undermining our self-confidence. It seeks to divide the community and cast a shadow of doubt about whether we should even exist at all.

There can be no doubt what we are seeing playing out in society is the concerted and energetic efforts of the few to impose their version of history on society. No longer can it be perceived as an expression of concern for the oppressed; the pendulum has now swung too far. Australia is a fundamentally decent and tolerant country, and the narrative of constant racial strife is now being rejected by mainstream Australians who believe there is more that unites us than divides us.

The voice referendum and the backlash against Woolworths’ decision not to stock Australia Day goods earlier this year confirm which side of this conflict the majority of Australians are on. The pushback against the corrosive nature of this movement is only just beginning.

https://www.theaustralian.com.au/commentary/curriculum-wars-are-distorting-history-for-political-advantage/news-story/42770520ced6cb3d28eb963e0475f3f6