Chris Bowen defends the government's gas reservation plan

0:00The government has unveiled its plans for a national gas reservation scheme. Labor initially proposed requiring LNG exporters to reserve 20% of their exports, but the draft makes that a ceiling rather than a fixed requirement. Chris Bowen is the Minister for Climate Change and Energy. I spoke to him earlier. Minister, welcome back to breakfast. Good to be with you, Sally. Why the change on the 20% reservation? Well, as you know, we announced this policy last December and we said we will consult on the details and the package we announced yesterday I think shows that we have continued with the direction of travel that we outlined. On the 20%, we said we would reserve 20% of exports of gas exports for Australian use. That's a fundamental principle underpinning everything we're doing, Australian gas for Australian needs first. We also said that we wanted to engineer what we called and meant and a modest oversupply.

1:06And in the consultation period, we had a discussion with a lot of players who pointed out to us in good faith that to achieve the modest oversupply, there's various ways of doing it. And so what we've landed on is the model we announced yesterday, which is reservation up to 20% of exports. But with the Australian energy regulator assessing demand each year on a five-yearly rolling basis and determining what that modest oversupply looks like within that 20% parameter. And so therefore, that really gives us the opportunity to genuinely provide that modest oversupply each year. So, cater for all the gaps, all the shortages that are always forecast and just a little bit extra, but not reserving gas that Australians don't use or don't need. That's not in anyone's best interests. It's not technically feasible with stock gas storage and it could have unintended consequences. So, it's a result of very, and you're six months of very intense consultations and deliberation.

2:07Minister, the government says it wants to put downward pressure on prices. Why can't the government promise that this policy will ensure cheaper gas prices? Well, because there's always a range of factors which go into the gas prices, the cost of extraction, primarily. The best trade is running out of gas. That is very cheap gas to extract. It's very cheap because we've been doing it so long to get it out of the best trade. It's more expensive to get it out of places on the mainland, but we don't have much choice about that because the best trade is running out rapidly. Also, there's international factors, but what we do say, Sally, very clearly, is that this is the policy which has the best utility to reduce gas prices down to the levels that Australian industry needs to remain competitive. Under your proposal, the Australian Energy Regulator would set exporters obligations each year to provide enough gas to meet 110% of forecast domestic demand, a capped at 20%, as we've been saying. Australian Energy producers, Chief Executive, Samantha McCulloch says this would quote,

3:08"'destroy investment signals and crowd out smaller domestic focus producers. Are you taking such concerns seriously as you consult on these draft laws?' Well, we don't agree with the gas industry on that. We don't agree with Sam McCulloch on that. I'm singularly unsurprised, frankly, that the gas peck-lubber groups aren't happy. That is not our key performance indicator for them to be happy. Our key performance indicator is to come up with a policy which sees Australian gas for Australian users, primarily. What you like with the rest, export it by all means, but Australian gas Australians have rights to it first. Now, we've engaged across the board. We've taken some issues on board. We've rejected others. You know, the gas industry wanted us to get rid of the must-supply mechanism and change it to must-offer. We thought about that. We considered it. We understand where they're coming from. We don't agree. That's what the government's to listen, consult, but ultimately make a call and not everyone

4:09will be happy with that call. You're listening to Radio National Breakfast. My guest is the Minister for Climate Change and Energy, Chris Bowlin, a plan to allow state governments to earn a new type of carbon credit for protecting native forests. Had been earmarked, that had been earmarked for logging. We'll go ahead. After the Greens reached a deal with the federal government, the Greens say the party's negotiations mean that carbon credits generated by the scheme won't be sold to coal and gas companies to offset emissions. But difference will this make to Australia's action on climate change? I was good day yesterday. There was a lot of speculation that this method, but this is step-minister Josh Wilson and I were putting through the Parliament would fail because the Liberal National's one nations and the Greens would vote together, which always struck me as a pretty bizarre circumstance. I think if one nation and the Greens are voting together, Greens are voting the wrong way on climate. Look, we had good discussions with the Liberal House of Waters. I pay credit to her.

5:09Well, I'm very pleased that this passed the Parliament. I'm very pleased that the Greens' party room worked with me, the majority. And as I said, I pay to you credit to the Liberal House of Waters, disappointing that three Greens crossed the floor to vote with one nation in sort of frankly a big of ideology. Now, what we've agreed is simply this, simply this, Sally, where a state government proposes this method, which is this method un implies the state governments. And where a state government determines that a particular project won't be available to a gas and coal or particular class of producers will note that in the register, the Commonwealth register, and in force that it's not a Commonwealth decision to exclude anyone. Where a state who the one is running the scheme, I want to do that. We will facilitate that. That is the only, frankly, I think modest change in that regard. We also have increased the amount of forestry that must be protected in the area adjacent to the national park. And so this is a good day yesterday because it's practical action.

6:1130,000, putting climate, took one side for a second, 30,000 gliders. Over 10,000 koala saved. A very, a pretty good day and also good for emissions. And also providing a route for investment and economic development in the regions where this logging has occurred and where and how the economy can be diversified. Minister, as you're noting, there was a split in the Green Senators, Macim, Blair and Jordan Stiljohn said quite they do not support relentless commodification of nature. Can you understand that they're putting forward concerns that national parks or marine areas can't be created unless carbon or biodiversity can be monetised in some way? What's your view? Well, I think it's a particularly ideological view. I'm interested in practical outcomes, which sees conservation. I thought we're trying to conserve more places. And a market mechanism can see jobs created, investment created. Maybe they don't care about that.

7:12I do. I think so. And this method was supported by a wide range of groups, Greenpeace, the Nishapas Conservation Council, Ken Henry, of course, in his group, very sensible players who looked at this and said, well, here's governments, the state and federal, trying to find a way through an issue which has been intractable for many years about how we create new economic activity where native forest logging ends. You can sit in Canberra and say, well, it shouldn't be that way and not have a practical approach. It's unfortunate that the three Greens took that approach, but I have to be fair and give credit to the risk of orders and the broader Greens' party for being more constructive. Now, there are things that they asked us for we didn't do. That's what an negotiation works with, but I think the outcome in the end with those modest changes was very practical. Minister, thank you for joining me this morning. Good on you, Sally.