The energy case: the world loves our resources, why don’t we?

The world can’t get enough of our resources, but Australia is failing to take advantage. The head of Australia’s retail energy lobby makes the case for riding on the tip-truck’s back.

Recently, the Business Council of Australia released a somewhat ironically titled report — Australia’s Energy Advantages — in which it reflected upon how we as a nation were squandering the very advantages to which the report referred. That our pre-eminent business lobby group felt compelled to issue such a report should cause us to sit up and take notice.

Australia is indeed blessed with ample energy reserves to meet its development needs. More fortunate perhaps is the location of those reserves close to our major cities. The La Trobe and Hunter Valley coal deposits helped to ensure that Australia’s largest cities enjoyed cheap electricity for much of the 20th century, enabling us to develop a comparative advantage in energy intensive industries like aluminium smelting.

Gas discoveries in Gippsland and Bass Strait, once again located in close proximity to a major centre in Melbourne, also served to establish that city as the hub of manufacturing. For cars and textiles, tariffs were essential to their development, but where energy was a major input, Australia could realistically compete in international markets.

As the BCA noted, today our advantage in low-cost electricity is gone. With it has gone a range of energy intensive jobs, contributing to a decline in electricity demand. The culprits are easy to identify and include overbuilt electricity networks, profligate subsidies for renewables and a short lived experiment with a high fixed carbon price.

FREE membership to The Mandarin

Receive unlimited access, get all the latest public sector news and features, plus The Juice, our daily news update sent direct to your inbox.

The Mandarin is where Australia's public sector leaders discuss their work and the issues faced within modern bureaucracy. Join today to discover the latest in public administration thinking and news from our dedicated reporters, current and former agency heads and senior executives.