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

Todays Presentation US energy context Australian energy context The Energy Trilemma Comparing Policies & Outcomes in the US & Australia Threats to coherent policy Security & Reliability Affordability Energy Policy Environment & Climate

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

Energy in Australia Rich in non-renewable energy resources Major Energy Exporter (Coal, LNG, Uranium) Investment in fossil energy production central to Australias 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

The Energy Policy Trilemma Security & Reliability Affordability Energy Policy Environment & Climate 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

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

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.

Australias Future is tied to Asia Demand growth for Australias energy resources is likely to be enduring Chinas energy consumption by source (annual average )

The US on Environment & Climate 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. When our childrens 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.

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

Australia on Environment & Climate Climate Change is the greatest moral, economic and social challenge of our time… Pledged 5% CO 2 (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 Kevin Rudd in 2007 Australian Prime Minister Heralded an era of certainty for investors to decarbonise the energy sector

And a new political reality New Prime Minister Tony Abbot campaigned on Australias suffering under the weight of worlds 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

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

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

But Australias 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

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