PHILLIP O'NEILL: Prepare Australia for global energy politics

NOT surprisingly, there is much interest and concern here in London about the latest blow-up between Israel and Palestine. 

Britain has a long history of involvement in the Middle East. For over a century, the British have tried to transform the tribes and ethnic and religious groups of this troubled region into stable nations. 

Central to Britain’s motivation has been its desire to shore up access to plentiful, cheap oil.

The United States joined the game in the 1950s, with the same purposes as the UK, as well as to support the partitioning of Palestine to create the state of Israel.

I’ve just finished reading a remarkable account of the politics of oil and nation building in the Middle East. The book is called Carbon Democracy, by Timothy Mitchell (published by Verso).

Carbon Democracy explains how British and American governments have manipulated Middle East politics over many decades to ensure access to cheap energy, while guaranteeing handsome profits to British and US oil companies.

Yet, there is serious discussion over here that dependence on Middle Eastern oil may be about to end, particularly for the United States. The catalyst is seen to be liquefied natural gas, or LNG. Industry experts say that the US could become independent of Middle Eastern oil within the next 20 years. Instead of importing oil, the US will complement its own oil supplies by tapping its vast gas reserves, especially by extensive use of the controversial fracking techniques which release gas from coal and shale rock seams.

If the US achieves energy self-sufficiency then there will be little need for the US to maintain a military presence in the Middle East – apart from its obligations to Israel. And how Middle Eastern politics play out in the absence of the US’s military strength would be a worrying question.

The point of my raising the matter is to expose how naive we are in Australia when it comes to the global politics of energy.

The prediction here in the UK is that Australia will become the world’s largest exporter of LNG by 2030. No doubt most of our LNG output will be Asian bound. But are we ready to play the tough game of energy politics, or will we stand aside and let multinational corporations and Chinese state companies make their own running?

And then what will become of coal? It has become a cliché that the Hunter Region is the world’s largest exporter of black coal. But what power do we in the Hunter wield as a result of this position? What long-term benefits are flowing to the Hunter as a result of the sweat and skill of our miners and as compensation for the devastation of our valley? Where are the billions of dollars promised from the federal government’s resources rent tax, for example?

Can anyone point to a document that explains the world energy outlook and the Hunter Region’s contribution? Is there a strategy for clever deployment of the power that is within our reach?

Or are we just a resources backwater open to exploitation by outsiders without an eye to the future?

Do we in the Hunter have anything to say to those who mine our hills and plains, who run giant trains down our valley, and who configure our port so it ships coal and little else?

Mitchell’s book exposes our naivety, our silence. In what other domain of human activity could you be the “world’s greatest” but then have nothing to say?

So how might we build a better understanding of global energy politics and, thereafter, of how to better perform our role as a world energy supplier?

What say we? Establish a world-class centre for better understanding the future of energy and for developing strategies for better outcomes for the Hunter? Call it the Institute for Energy Politics of Coal.  Fund it by a one-cent levy on every tonne of coal produced  which would give it well over a million dollars each year. Bring together the scholars from our  university and the CSIRO energy centre. Throw in the guile of our business and union leaders. Enlist the experience and foresight of our public service. 

Enrol the passion of our environmental activists. And ensure this time in our history leads us somewhere better.

Phillip O’Neill is a professor of economic geography at the University of Western Sydney.

PREDICTION:  Australia could become the world’s largest exporter of liquefied natural gas by 2030.

PREDICTION: Australia could become the world’s largest exporter of liquefied natural gas by 2030.


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