Interview with Sally Sara, ABC RN Breakfast

SALLY SARA, HOST: Minister, welcome back to Breakfast. MINISTER FOR CLIMATE CHANGE AND ENERGY, CHRIS BOWEN: Good to be with you, Sally. SALLY SARA: Why the change on the 20 per cent reservation?

MINISTER BOWEN: Well, as you know, we announced this policy last December, and we said we would 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 per cent, we said we would reserve 20 per cent 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 a modest oversupply. And 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 per cent 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 per cent 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 gas storage, and it could have unintended consequences. So it’s the result of very – six months of very intense consultations and deliberation.

SALLY SARA: Minister, 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? MINISTER BOWEN: Well, because there’s always a range of factors which go into the gas prices – the cap.

The cost of extraction primarily. The Bass Strait 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 out of the Bass Strait. It's more expensive to get it out of places on the mainland. But we don't have much choice about that because the Bass Strait 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. SALLY SARA: Under your proposal, the Australian Energy Regulator would set exporters obligations each year to provide enough gas to meet 110 per cent of forecast domestic demand, capped at 20 per cent, as we've been saying.

Australian Energy Producers Chief Executive Samantha McCulloch says this would, quote, “destroy investment signals and crowd out smaller domestic-focused producers”. Are you taking such concerns seriously as you consult on these draft laws? MINISTER BOWEN: Well, we don't agree with the gas industry on that.

We don't agree with Sam McCulloch on that. You know, I'm singularly unsurprised, frankly, that the gas peak lobby 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. Do what you like with the rest. Export it by all means, but it's 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 good governments do – listen, consult, but ultimately make a call. And not everyone will be happy with that call. SALLY SARA: You're listening to Radio National Breakfast.

My guest is the Minister for Climate Change and Energy, Chris Bowen. A plan to allow state governments to earn a new type of carbon credit for protecting native forests that had been earmarked for logging will go ahead after the Greens reach to 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.

What difference will this make to Australia's action on climate change? MINISTER BOWEN: It was a good day yesterday. There was a lot of speculation that this method, that the Assistant Minister, Josh Wilson, and I were putting through the parliament would fail because the Liberals, Nationals, 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 Larissa Waters. I pay credit to her.

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 paid you credit to Larissa Waters. Disappointing that three Greens crossed the floor to vote with One Nation in sort of, frankly, a peck of ideology.

Now, what we've agreed is simply this, Sally. Where a state government proposes this method, which is this method only applies to state governments, and where a state government determines that a particular project won’t be available to gas and coal or a particular class of producers, we’ll note that in the register, the Commonwealth register, and enforce that.

It's not a Commonwealth decision to exclude anyone. Where a state, who are the ones running the scheme, 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. So this is a good day yesterday because it’s practical action. Thirty thousand- putting climate to one side for a second, 30,000 gliders, over 10,000 koalas saved.

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 now the economy can be diversified. SALLY SARA: Minister, as you're noting, there was a split in the Greens. Senators McKim, Blair and Jordon Steele-John said, quote, 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? MINISTER BOWEN: Well, I think it's a particularly ideological view.

I’m interested in practical outcomes which sees conservation. I mean, I thought we were trying to conserve more places, and a market mechanism can see jobs created, investment created. Maybe they don't care about that.

I do. And I think you know, this method was supported by a wide range of groups, Greenpeace, the New South Wales Conservation Council, Ken Henry, of course, and his group – very sensible players who looked at this and said, well, here's governments, 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 three Greens took that approach, but I have to be fair and give credit to Larissa Waters and the broader Greens party for being more constructive. Now, there were things that they asked us for we didn't do.

That's what a negotiation works with. But I think the outcome in the end, with those modest changes, was very practical. SALLY SARA: Minister, thank you for joining me this morning.

MINISTER BOWEN: Good on you, Sally. We acknowledge the Traditional Owners of country throughout Australia and recognise their continuing connection to land, waters and culture. We pay our respects to their Elders past, present and emerging.