Magazine of Socialist Action in Australia

Public ownership only way to resolve energy crisis

Reading Time: 3 minutes

When South Australia lost power in late September, during the worst storm seen in decades, the capitalist media and right-wing politicians were quick to blame renewable energy for the blackout. They wasted no time in placing the blame on clean energy, to divert blame away from the failing privatised power network.

The real reason for the blackout however was the collapse of transmission towers throughout South Australia. The power lines going down forced electricity to be drawn from the national power grid, via Victoria, since it is the only connection South Australia has to the grid. We then had the failure of the Victoria-South Australia interconnector power lines, due to the extra strain of meeting the power demand, and this effectively cut the state off from the rest of the country.

Tony Wood, Energy Program Director for the Grattan Institute pointed out at the time that “If you’ve got a wind farm or a coal-fired power station at the end of a transmission line, and that system either is taken out by a storm or is forced to shut down to protect itself from a storm, it doesn’t matter what the energy source is.”

South Australia has also experienced other, much smaller, blackouts since September. Another storm in January caused thousands of homes to lose power, and in February a heatwave forced rolling blackouts. This has led to speculation that the state is on the brink of an energy crisis.

There are clearly problems with the state’s power industry, but the blame placed on renewable energy was clearly a baseless and opportunistic attack meant to draw criticism away from the policy failures of state and federal governments in managing the energy industry, their over-reliance on fossil fuels and their mistaken trust in capitalist markets.

While South Australia has been in the spotlight, there is also a concern that the rest of Australia is facing an energy crisis caused by a natural gas shortage. This is despite the fact that Australia is actually one of the world’s largest exporters of gas.

It is expected that by summer 2018-19 New South Wales and South Australia will be experiencing a gas shortage, with Victoria set to follow in only a few years. There are warnings that this will not only affect industry and electricity supply, but also household use.

Malcolm Turnbull has blamed the problems on state governments not allowing the development of new gas fields, and other restrictions like Victoria’s fracking ban. He is using the issue as leverage to see these restrictions overturned.

However, once again when you look into it the shortage is actually due to the profiteering of energy companies. New infrastructure in Gladstone, Queensland makes possible the liquefaction of natural gas for transportation. This has allowed gas in eastern Australia to be exported and sold on the world market for the first time.

Bruce Robertson of the Institute for Energy Economics and Financial Analysis explains that “the market on the east coast is controlled by a cartel of producers and is restricting supply to the domestic market to drive up the price, and they’ve been very successful at doing this.”

The federal and state governments have in effect allowed energy companies to exploit natural gas reserves without demanding any guarantee of sufficient supply for use in Australia. Robertson commented that “Australia is unique in its sheer stupidity in allowing companies to exploit our resources and not insist they provide for our domestic market.”

The absolute absurdity of Australia facing a domestic shortage while exporting gas at unprecedented levels almost perfectly exemplifies the problems inherent in capitalist markets. The idea that the market can offer any solutions to our problems is ridiculous. Continued reliance on the markets and private energy companies will only exacerbate problems now and in the future.

Socialists are in favour of providing security to the energy sector so that industry, transport and households can access what they need. That said, the only way to provide real security is to put the sector in public hands and for a national energy plan to be democratically developed. On a socialist basis, nationalisation of the sector would also allow us to transition to renewable energy without the interference of profiteers.

By Dane Letcher


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