Professor Chris Greig Director, UQ Energy Initiative

1. Comparing Energy (& Climate) Policies in the US & Australia Professor Chris Greig Director, UQ Energy Initiative

2. Today’s Presentation • US energy context • Australian energy context • The Energy Trilemma • Comparing Policies & Outcomes in the US & Australia • Threats to coherent policy

3. Energy in the USA • Domestic Energy Use • 1973 Arab Oil Embargo • Bush Administration: National Energy Plan • Obama Administration: • 1st Term: Economy + Stimulus = Green Jobs • 2nd Term: Climate Policy • Energy Mix dominated by traditional resources • Petroleum, Natural Gas, Coal • Nuclear • But growing investment in Wind, Solar, Hydrogen/Hybrids • And Biofuels - 1st& 2nd Generation

4. Energy in Australia • Rich in non-renewable energy resources • Major Energy Exporter (Coal, LNG, Uranium) • Investment in fossil energy production central to Australia’s economic resilience • 88% of electricity is generated from fossil fuels (including 75% coal) • Nuclear power prohibited • Biofuels negligible • Policy wise • 3 Prime Ministers in 4 years • 3 shifts in energy & climate policy

5. The Energy Policy Trilemma Energy Policy ought to manage the inevitable trade-offs Australia over the last decade has jumped between priorities The USA seems better able to manage trade-offs although Energy Security prevails

6. On Energy Security & Reliability In the US talk of future Energy Independence dominates - • Especially Petroleum • U.S. net Oil Imports falling to 20 year lows from a peak of 12.5 M bpd in 2005 to 7.4 M bpd in 2012 • Driven Primarily by Resources, Fracking & ‘Reservation’ • The IEA has declared that the US will be a Net Exporter by 2020

7. But in Australia … Energy Security remains a low order policy priority • Partly because we are rich in resources relative to population • Partly because the natural resource exports underpins the economy Priority Issues for new Energy White Paper 2014 • regulatory reform; • workforce productivity; • the development of both traditional and new energy sources; • maximising export opportunities for energy commodities, products, technologies and services.

8. Australia’s Future is tied to Asia China’s energy consumption by source (annual average 2002-12) Demand growth for Australia’s energy resources is likely to be enduring

9. The US on Environment & Climate When our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did. Over the past eight years, the United States has reduced our total carbon pollution more than any other nation on Earth. But we have to act with more urgency – because a changing climate is already harming western communities struggling with drought, and coastal cities dealing with floods.  

10. US on Climate & Environment • Pledged reduction of 17% CO2(e) below 2005 levels by 2020 • US environment & climate policy is heavily focussed on cleaning up / eliminating coal power plants • Key policies • CO2 standard on new fossil plants (NGCC equivalent) • CAFÉ standards • State based RET’s • California ETS • Biofuel targets (1st and 2nd Generation)

11. Australia on Environment & Climate Kevin Rudd in 2007 Australian Prime Minister “Climate Change is the greatest moral, economic and social challenge of our time”… • Pledged 5% CO2(e) below 2000 levels by 2020 • Proposed cuts to GHG emissions by 80% before 2050 • An expanded mandatory Renewable Energy Target 20% by 2020 • An Emissions Trading Scheme proposed in 2008 commenced with a Carbon Tax in 2012 • “Accelerating” clean energy deployment • ARENA & Clean Energy Finance Corporation • Strong support for CCS Heralded an era of certainty for investors to decarbonise the energy sector

12. And a new political reality New Prime Minister Tony Abbot campaigned on Australia’s suffering under the weight of “world’s biggest carbon tax” and has promised to repeal it. And the Clean Energy Finance Corporation To be replaced by Direct Action Policy Much more focus on Affordability Little on security and environment

13. And on affordability (electricity) US largely remains affordable while Australian residential electricity prices have more than doubled since 2005.

14. And affordability of gas • Geology + Domestic Price + Innovation + Infrastructure + Capability US Shale gas (& oil) revolution Lots of low price gas has revitalised US manufacturing

15. But Australia’s gas revolution is very different But in Australia, a strong export price signal drove development of offshore and onshore resources The domestic enablers not so present Domestic gas prices likely to range from $8-10 per Million Btu

16. The growing threat to stable, coherent policy Environmental activism and (in response) industry advocacy hijack sound long term policy Coal - Safe clean power for the world Cleaner Energy Growing Communities Creating Jobs The Australian coal industry - adding value to the economy