Corporate heavyweight Andrew Liveris, the Morrison government’s special adviser on manufacturing, has declared Australia and the world can hit net zero emissions by 2050 by significantly expanding the supply and domestic use of gas – despite gas being a fossil fuel with “roughly 60% of the emissions of coal”.
Liveris, who is one of the business architects of the Coalition’s much vaunted “gas-led recovery” plan, told the National Press Club on Wednesday Australia burned “far too much coal” and “switching to gas will automatically bring [emissions] down”.
Asked how his push to re-industrialise Australia and increase the supply of gas, a fossil fuel which creates pollution during extraction and use, would get Australia to net zero emissions by 2050, Liveris said the pathway to net zero emissions was “optimising your fossil fuel mix and developing alternative technologies using gas as a transition fuel and setting targets … And you can get to net zero by 2050 by doing that.”
Asked again how increasing the supply of a fossil fuel, even one that has less emissions than coal, lined up with Australia’s obligations under international climate agreements to reduce emissions, Liveris said: “Go study the US numbers, go study the UK numbers and the numbers in Europe – they’ve all decreased because of the introduction of gas.”
Gas is often described as having about half the emissions of coal but studies have suggested this could be more due to leakage of methane, which is a particularly potent greenhouse gas.
Scott Morrison on Tuesday put some flesh on the bones of the government’s gas strategy, pointing to new commitments in the October budget, including funding of $52.9m to unlock more gas supply and boost transport infrastructure.
As well as flagging that the government would back the construction of a new gas-fired power station in the Hunter Valley if the energy company AGL failed to replace Liddell, Morrison held open the option of taxpayer underwriting for priority gas projects, streamlining approvals or creating special purpose vehicles for new investment.
The gas-led recovery has been championed by the government’s business advisers, including Nev Power, the former Fortescue executive who heads Morrison’s Covid coordination commission, and Liveris, a former Dow Chemical executive and current Saudi Aramco board member. Liveris produced a report for the commission as part of a manufacturing taskforce appended to the group.
A leaked version of that report recommended the government underwrite an increased national gas supply and that government agencies partner with companies to accelerate development of new fields such as Beetaloo Basin, and that states introduce subsidy schemes for gas-fired power plants.
The report, revealed by Guardian Australia, also proposed a role for government in helping develop gas pipelines between eastern states and the north, and potentially a $6bn trans-Australian pipeline between the east and west, by either taking an equity position, minority share or underwriting investments. Power later characterised that leak as a draft.
Despite the government flagging potential subsidies, and the leaked version of the manufacturing taskforce report championing subsidies, Liveris told the National Press Club he did not favour subsidies.
“In none of the recommendations made yesterday, or the announcements, did I see the word subsidy,” the corporate chief said. Liveris said the gas strategy “is actually a redirection of funds that have been fully deployed. That’s a key part of the plan.”
He said the plan Morrison had outlined was about providing certainty. “If you give the private sector a trajectory like a hub and access to demand, ie the demand you can put in place, and you say that demand can now underpin a power station or two … then why wouldn’t you do that?”
Despite that answer suggesting the government would be active in marshalling infrastructure, or in lining up demand for new gas-fired power plants, Liveris said the plan has “no new subsidy required, no new taxes, no anything – that wasn’t part of my recommendations”.
Morrison said this week the government’s preference was for the private sector to invest in infrastructure but “we are prepared to go further if we need to”.
“The commonwealth stands ready to step-in to support pipeline development if necessary, as we are doing now with other nationally-significant infrastructure like electricity interconnectors, water infrastructure and of course major highways,” the prime minister said.
He said the government’s long-term aspiration was to create a transparent and competitive Australian gas hub on the east coast, “with a family resemblance to the Henry Hub system in the United States”.
Morrison said the government intended to create the conditions for an open and transparent trading hub, “and act as an honest broker to match supply and demand”.
Gallery: The modern-day gold hunters (Lovemoney)