A rural headache for the Coalition's energy strategy

One of the challenges for a Coalition federal government in its new iteration of the energy white paper is that it cannot afford to ignore the voices from the bush.

However, as the government is finding with the new free trade agreements, the farmers are frequently singing from different hymnals to those in use elsewhere in the nation – and asking for things that are unlikely to be delivered.

Under the Gillard government, the dominant tendency on virtually every energy-related issue was the combination of a quasi-left wing mindset and the Greens’ monkey on the prime minister’s back. Martin Ferguson produced a rational white paper in late 2012, but it did little to appeal to the green leanings of other senior ministers.

For the Coalition, it is not enough to ditch the Gillard/Swan/Combet approach and to reinforce Ferguson’s pro-market stance. It also has to take heed of strong lobbying from the agricultural, manufacturing and resources sectors.

How it proposes to balance all this will emerge in the energy green paper to be published next month and in the renewable energy target review promised for mid-2014.

It’s a fair bet that one of the 250 submissions on the 2014 white paper being read carefully by Industry Minister and farmer Ian Macfarlane comes from the National Farmers’ Federation.

The NFF is not just concerned about energy prices. It is also giving a national voice to the rural worries about the physical expansion of the onshore energy industry.

Its submission is quick to get to the point. It complains that “continuous expansion of the energy sector and escalating energy price pressures have had a severe impact on individual farmers and agriculture, contributing to significant financial hardship in some areas.”

It’s obvious from the submission that irrigators, dairy farmers and cotton growers have had a big influence on the document. It throws up the challenge of Australia managing both food security and energy security, and argues that the emergence of the coal seam gas industry has raised the importance of this.

The upstream petroleum industry has argued in reply that the CSG developments in Queensland have improved the financial lot of thousands of farmers and many small rural towns. It cites Queensland’s Roma versus Narrabri in New South Wales as an example.

Roma, in a region where CSG development is flourishing, has had economic growth of 120 per cent in six years and unemployment reduced to 2 per cent while its population has risen 9 per cent. Meanwhile, Narrabri, one of the centres of the agitation against CSG, has seen its population fall 6 per cent and unemployment exceed 5 per cent while the economy has risen by a quarter.

The NFF says the problem is that the CSG sector has been allowed to expand without appropriate regulation and oversight, something both the gas producers and successive Queensland Labor and Coalition governments would dispute. It also sounds an alarm about what may happen if shale oil and gas development takes off in areas where it competes with agriculture for land use.

While unhappy about energy prices and encroachment of energy operations on farmland, the NFF is keen to speak up for the development of utility-scale renewable energy as a new business in regional Australia. It then calls for an inquiry in to transmission networks in regional areas as part of “a robust, least-cost transition to bio-energy, solar, wind and other renewable supply”.

It also wants the federal government to commit to investment in energy distribution infrastructure to “deliver efficient national markets”.

One would like to see Joe Hockey’s face when this is brought to his attention.

Much the same can be said about the NFF’s push for “extensive” spending on R&D to enable farmers to improve the efficiency of fuel use and to promote hydrogen, solar, biofuels and, curiously, wind. 

This is separated by five pages in the submission from a declaration that any policy adding costs to farm businesses should be removed – “and the renewable energy targets have clearly driven up costs on farms.”

The other rural bugbear brought to the fore in the NFF submission is the need for electricity tariffs to be tailored to meet farming needs. Ideally, it says, a farm business tariff should be based on the energy used rather than network infrastructure charges.  A short answer from the urban side of things might be “dream on”.

Clearly, the Coalition must acknowledge the bush perspective as the white and green papers are composed. But squaring “what farmers want”(the submission is littered with this heading) with its overall national energy strategy will be an interesting proposition.

Keith Orchison, director of consultancy Coolibah Pty Ltd, publisher of the This is Power blog and editor of OnPower newsletter, was chief executive of two national energy associations from 1980 to 2003. He was made a member of the Order of Australia in 2004 for services to the energy industry.