How to reindustrialise Australia?
This week we heard that that Australian steel producer BlueScope will invest $1 billion in an Ohio-based American steel plant, citing the United States’ energy-friendly policies which have driven power bills down to a third of what Australians pay as a decisive factor. This hasn’t just been good news for American businesses. It has also meant thousands of high-quality jobs in a sector that has long been thought of as resigned to an inevitable decline and end due to automation and competition from developing countries with low labour costs.
It’s time that we did away with the myth that Australia has deindustrialised simply because other nations in our region pay their workers less and force them to endure harsher conditions. If this were the case, then the same disappearing manufacturing sector would be seen in nations like Germany and the United States – yet we don’t see this phenomenon.
The United States has reinvigorated its manufacturing sector thanks to its shale gas revolution and the cutting of red tape to lower electricity bills. This has delivered immense benefits to American workers and businesses. Unfortunately, successive state and federal Australian governments lack the guts to do the same and have chosen to bury their heads in the sand instead.
While Australia’s immense natural gas reserves rival those of the United States, much of it remains locked away thanks to nonsensical fracking bans in places like Victoria, South Australia and parts of New South Wales.
Meanwhile, Australian power bills have skyrocketed in recent years to some of the world’s highest as our coal-fired power stations go into premature retirement and our reliance on natural gas for base-load power increases with the insertion of intermittent solar and wind energy into the grid.
Locking away the country’s natural gifts while pensioners shiver through the winter due to expensive heating, and businesses continue to close their shutters due to high operating costs, is both cruel and unconscionable. It’s also not environmentally friendly given that the United States has reduced its greenhouse gas footprint significantly by transitioning from coal to natural gas.
Natural gas must be harvested closer to where it’s used to provide viable and affordable energy. Domestic gas reservation policies, which have actually increased gas prices over the long-term in countries like Argentina and Egypt by curtailing incentives to invest in extraction and resource development, are no replacement for reducing supply-side restrictions.
Let’s take the pressure off hardworking taxpayers, our businesses, and families by enabling the natural gas revolution that Australia deserves.
This article appeared in The Spectator on 23 August 2019.