Part 1
Part 2
Alan Moran was the Director of the Deregulation Unit at the Institute of Public Affairs from 1996 until 2014. He was previously a senior official in Australia’s Productivity Commission and Director of the Commonwealth’s Office of Regulation Review. He has also played a leading role in the development of energy policy and competition policy review as the Deputy Secretary (Energy) in the Victorian Government.
He was educated in the UK and has a PhD in transport economics from the University of Liverpool and degrees from the University of Salford and the London School of Economics.
Alan has published extensively on regulatory issues, particularly focusing on environmental issues, housing, network industries, and electricity and gas market matters. He has also contributed Australian chapters in a series of books on world electricity markets, edited by Fereidoon Sioshansi.
Alan’s most recent book is “Climate Change: Treaties and Policies in the Trump Era” published in 2017. He also assembled and contributed to a compendium Climate Change: the Facts published in 2015
Transcript
Part 1
Speaker 1:
You’re with Senator Malcolm Roberts on Today’s News Talk Radio TNT.
Malcolm Roberts:
Well G’day, it’s Today’s News Talk Radio, tntradio.live. Thank you very much for having me as your guest, whether it’s in your lounge room, your kitchen, your shed, your car, or wherever you are right now. Thank you very much for listening. And I remind you before we get into our programme, we’ve got a wonderful programme again today.
Malcolm Roberts:
The two most important themes for all my programmes are freedom, specifically freedom versus control, the eternal human battle. And secondly, personal responsibility and integrity. Both freedom and responsibility and integrity are fundamental for human progress and for people’s livelihoods, and we’re going to be discussing them today.
Malcolm Roberts:
Did you just hear on the news that the Ukrainians have been asked to ignore their need for warmth? Australians are also being asked to ignore our need for warmth. We now face in a country that had the world’s most reliable electricity and the world’s cheapest electricity, we now face blackouts. The new term though sorry is demand management. There are so many politically correct terms being bandied around to hide the mismanagement and destruction of our electricity sector.
Malcolm Roberts:
Before going there, I want to share with everyone that I had two wonderful days in Brisbane in the last week. Thursday evening I met with and spoke at and listened to many doctors and health professionals at the Australian Medical Practitioners Society AMPS, A-M-P-S. The summit on Thursday evening was astounding. We had people from all over the world, literally experts, but we most importantly we had homegrown Aussie experts and they did a phenomenal job. It was an honour to be on the stage with them speaking, because what they want to do is to restore our health practitioners independence. They restore the doctor, patient relationship, restore informed consent, restore fair and objective oversight and accreditation.
Malcolm Roberts:
Then the next day, I had two wonderful meetings in my office, one after the other. Firstly, some of the doctors who spoke and these doctors, their courage is amazing. They’ve given up their jobs rather than get injected under mandates from state bodies. They’ve given up their jobs and some of them have had their jobs and livelihoods and professional careers, decades in the making ripped from their lives because they have dared to tell the truth when it comes to informing their patients about the injections and about the adverse effects.
Malcolm Roberts:
We learned about the adverse effects and there are millions of people threatened. So I had two meetings, one with the doctors and then with Senator Gerard Rennick who continues with us to restore health and restore safety for the people of Australia and restore fairness and good governance for the doctors and the health professionals, including the nurses. Ambulance workers were there. Paramedics were there. And we also had two very, very credentialed medical experts; one a retired doctor and the other, a retired former American doctor who’s been in Australia 30 years working with the TGA and he told us what was going on there. And it’s shocking.
Malcolm Roberts:
So there’ll be more about that in coming months. And then last night, my wife and I went to the AMPS, the Australian Medical Professional Society dance. It was really an opportunity for people to let their hair down and talk. And we had the same doctors there. We had many, many people from the public coming in and just appreciating what those doctors are doing. The courage of these men and women, the stress that they have been under, unfairly, dishonestly, inhumanely, and immorally as they try to protect their patients.
Malcolm Roberts:
I was blessed and honoured Thursday and Friday four times by these people. Thank you so much for what you are doing and we will back you. We will hound the people that have been hounding you. We will get them to stop and leave you alone and let you get on with truthful medicine to protect people’s lives to bring safety to people. There are enormous number of people with long COVID and even more, many, many more with severe, serious injection injuries, adverse effects, and we need to protect these people and we’ll be there helping them.
Malcolm Roberts:
But coming back to the topic of energy today, the primacy of energy at the moment, and I’ll ask my guess today to explain more about this, but there are strikes going on in Britain and parts of Europe because people are without their power or because they’re facing huge increases in energy costs, huge increases. And this is in the so-called third world. And these disastrous conditions, threatening conditions are due to neglect, dishonesty, deceit and our guest will explain that.
Malcolm Roberts:
Before we go on to discussing the primacy of energy, our whole standard of living today depends upon modern energy, reliable energy, affordable energy, stable energy, secure energy, environmentally responsible energy and energy price itself is not only significant for our standard of living, it’s a price multiplier because everything is affected by electricity, our raw materials, our agriculture, our food processing, our transport and our jobs. That’s why we’ve exported our jobs to China.
Malcolm Roberts:
We’ll be talking about the benefits to the environment of having affordable, reliable, secure, safe, and environmentally responsible energy. We’ll be talking if we have time about the absurdities that are going on with our so-called modern electricity sector, which is a return to being dependent on nature. Australia has gone from the lowest price electricity to the highest price, despite having the world’s largest gas exports and the second largest coal exports. We have abundant resources. We’re the number one exporters of energy, and yet we can’t keep the lights on at home and people can’t afford to use electricity. Now my guest is Dr. Alan Moran. He was the director of the deregulation unit at the Institute of Public Affairs from 1996 until 2014.
Malcolm Roberts:
He was previously a senior official in Australia’s productivity commission when it was really doing a very, very good job, and director of the Commonwealth’s Office of Regulation Review. He has played a leading role in the development of energy policy and competition policy review as a Deputy Secretary of Energy in the Victorian government, previous Victorian government I’m sure he’ll hasten to add. He was educated in the UK and has a PhD in transport economics from the University of Liverpool and degrees from the University of Salford and the London School of Economics. Alan has published extensively on regulatory issues, particularly focusing on environmental issues, housing, network industries, and electricity and gas market matters.
Malcolm Roberts:
This man knows energy. He knows government. He knows how the bureaucrats work. He has contributed Australian chapters in a series of books on world electricity markets edited by [inaudible 00:08:27]. Dr. Moran’s most recent book is Climate Change: Treaties and Policies in the Trump Era published in 2017. He assembled and contributed to a compendium climate change, the facts published in 2015. This man knows his stuff and he’s got a diverse background. Welcome Alan.
Alan Moran:
Hi Malcolm. Thank you for that intro.
Malcolm Roberts:
Well thank you for coming on TNTradio.live. Let’s start with something you appreciate, mate.
Alan Moran:
That I appreciate.
Malcolm Roberts:
Yes. Anything at all, just to get the heart and mind synchronised.
Alan Moran:
Well, I think I appreciate living in comfort and being able to turn on the television, being warm, going and playing tennis and having a hot shower afterwards. All of these things are a variation of what we all I think appreciate in the civilised world and what we’ve become accustomed to thinking is just the norm. But of course it wasn’t always the norm and may not be the norm in the future.
Malcolm Roberts:
What do you mean by that, it wasn’t the norm in the past? What would we rely upon for energy before our modern sources?
Alan Moran:
Yeah, well, we probably used per capita at least a hundred times as much energy as we used before, say the 15th century humans per capita. Really energy defines our abilities to enjoy life, our income levels and whatever else. If you think in terms of the development of humanity from out of Africa, et cetera, we basically became somewhat better off when we managed to get forms of energy in terms of harnessing oxen to plough fields, in terms of sales ships to trade, et cetera. And this was, I guess, the first start of rising above just the hunter gatherer stage into something which we would now call civilization. And of course, if we think in terms…
Alan Moran:
If we think in terms of the progression from that early civilization with oxen and sailboats, et cetera, it was quite slow until the 15th or 16th century. The oxens became horses and we bred them better. The sailboats became more sophisticated sailboat, which traversed the world. And all of that contributed to a basic increase in our living standards, not only contributed, without it, we couldn’t have had that increase in the living standards. And this is in the sort of prior to the modern era, which I guess would’ve started maybe in the 19th century and with the ability to harness bigger licks of energy, which meant coal, oil and gas, and allowed us then to move very quickly from harnessing oxen and horses and sailboats into an era where we were using oil and gas and diesel, both to power our homes and light our streets and cook our meals and to traverse the world.
Alan Moran:
A manyfold increase in our productivity resulted from this increased use and the development of energy which we now call fossil fuel energy and has become since then expanded into nuclear energy and hydro energy, but basically the modern forms of energy until we discovered or thought we discovered an ability to go back to wind with windmills and to sun with sun farms and, which I’m sure we’ll talk about later, has partly crippled and may well much more fully cripple our ability to enjoy those quite obvious and universal pleasures that we have as a result of our consumption of energy.
Malcolm Roberts:
Well, it’s a very important point you make and I want to extend it. You say we released animals from being a burden on animals to produce our energy for us. And we all need to understand that what energy does when we get it from somewhere else other than their own body, what energy does is it leverages our productivity. It enables us to be more productive and therefore have an easier life. And I loved your term there, energy defines our ability to enjoy life. But it also increases our wealth. And many centuries ago, people would harness another man’s energy called slavery. People would harness animals, and now those animals and slaves fortunately have been liberated because we found other forms of energy, which are more moral and cleaner and much, much more effective and much higher productivity. And that’s why coal and oil and natural gas came in, correct?
Alan Moran:
That’s right. Yeah. And many, many times more efficient.
Malcolm Roberts:
Yes. And the other thing, Alan, is that nature is very variable in its production of energy, sources of energy. We used to have sailing ships, but they were unreliable. We used to have windmills, but they were unreliable. And so what the hydrocarbon fuels, coal, oil and natural gas did was they made us independent of nature for our energy. And that’s extremely important, isn’t it? Because it enabled us to end the famines. It enabled us to minimise the impact of droughts, floods, not by changing the climate, but by adapting to it by using energy to make us more productive regardless of the climate. So that is extremely important for our wealth, for our ease of living, for our longevity. And the key point you’ve made is that that remarkable transition has occurred in 170 years, but has been due to hydrocarbon fuels, coal, oil and natural gas, correct?
Alan Moran:
That’s right. And of course, without those assets that we now have developed, we would be back to a very primitive living standard and to ability on the vagaries of weather, we would see the sorts of things that mankind throughout most of his history has faced which is famines and droughts and mass near extinctions of people as a result of that weather dependency. The weather is something we talk about, we ramble about, but it was something which was so vital to living before we actually managed to harness it.
Malcolm Roberts:
Yes. And let’s talk about the fundamentals of energy so everyone understands it and sees where we’re going with our conversation. Correct me if I’m wrong, the fundamentals of energy are cost or affordability. That enables accessibility for everyone if it’s cheaper energy. The very important thing though is as energy prices decrease, productivity increases because we can spend more on energy. So it’s very important for productivity.
Malcolm Roberts:
And as we increase productivity, we increase prosperity. As we increase prosperity, we increase wealth, not just for a few, but for many because one of the things oil, coal and natural gas have done, have put slaves, mechanical slaves at our disposal for carting us around, for transporting our food, for refrigerating our food, for cooking our food, doing our dishes. So we’ve become much more productive and that’s gone down to ever lower income levels. So cost, affordability. Second one is reliability. Third one is security of supply. And the fourth is stability. And I’d add a fifth one there, and that is environmental responsibility. Any others you can think of and do you have any comments on those? Am I right?
Alan Moran:
No, I think you’re dead right. I think that’s all covers the gamut of energy, of what we mean by energy by its ability to enhance our human happiness and ability to live high standard of living. And indeed the great thing about the increase in energy supply is that it allowed what is sometimes called a trickle down effect, whereas gradually if we think in a modern economy today, there are very rich people, but there’s not very many very poor people. The energy that, or they may be very poor in terms of relative to, but compared to the historical poor, they’re immensely rich. And that’s largely because we have harnessed energy and we’ve technologically developed it and we’ve actually put it through wires to our homes, through pipes to our homes, et cetera, in factories.
Alan Moran:
And we’ve done so in ways that by and large have allowed it to become reliable, to be available when we want it, not when it becomes available. And that’s something which we may talk about later is the difference between energy developed by and controlled by humans, which is the fossil fuels, hydroelectricity and nuclear, and that which is not controlled by humans, but which is determined by nature. And which in the past, we made immense advances in harnessing nature in terms of animal power, in terms of shipping or sail ships, et cetera. But those advances were nothing like the ones that we’ve made in the last couple of centuries in terms of harnessing the fossil fuels and hydro and more recently nuclear.
Malcolm Roberts:
We’re on TNTradio.live. I’m Senator Malcolm Roberts. I’m the host. And I’ve got a wonderful guest on right now, an internationally accomplished economist, Dr. Alan Moran and we’re talking about energy. So we need to go to a break in a couple of minutes, Alan, so could you tell us why hydrocarbon fuels, coal, oil, natural gas, what you call fossil fuels, it’s a term I refuse to use, but you can use it. Why are hydrocarbon fuels superior? Isn’t it because of the energy density, they provide high energy density?
Alan Moran:
Yeah, that’s in a nutshell what it means. There’s very low energy density with animal power, with human power, et cetera. And the denser the energy is, that is the more compact it is per the biggest bang per buck if you like it is then the better off we are. Now I’ve got to say the densest energy is nuclear, but nuclear is [inaudible 00:20:24] form of energy, but it’s not, certainly in Australia anyway, it’s not the cheapest form of energy because its density is such that it’s, well, it’s explosive, more explosive than other energy and therefore does require a great deal of sheltering from that to actually operate it. So nuclear, at least for the present is more expensive than other energies, which are less dense than the hydrocarbons and hydropower. But yeah, the energy density defines its cost, its basic cost.
Malcolm Roberts:
Thank you. And perhaps before we go to the break, I’ll just mention that you’ve raised an important point in that nuclear is even more dense than hydrocarbons coal, oil and natural gas, but it needs elaborate protection, which raises the cost. And fundamental to cost is the amount of resources going into produce the energy. So in a coal fired power station for the unit of energy that it produces, it’s on average $35, sorry, 35 tonnes of steel per unit of electricity produced.
Malcolm Roberts:
Alex Epstein has produced the figures in the states showing that wind, a wind turbine, requires a 546 tonnes of steel for the same amount of energy. Huge increase in resources, not only because it is a larger use of resources in developing wind power, but also much, much less energy comes out. So we’ve got very high cost of energy per unit of energy produced.
Malcolm Roberts:
We’re with Alan Moran and we’ve just established the superiority of hydrocarbon fuels and the benefits that they have blessed on humanity. We’ll have a quick ad break and then we’ll be back to listen to Alan Moran on what is happening to our energy sector.
Malcolm Roberts:
The voice of freedom is TNTradio.live. And we’ve been talking about a topic that I don’t think you’d hear about on the ABC, Alan or on channel 7, 9, 10, a topic that would be banned on many or downplayed or distorted and misrepresented many stations around the world.
Malcolm Roberts:
So let’s move to the replacements for hydrocarbon energy. Why are unreliable intermittents like solar and wind inherently inferior and fundamentally will never work because of their lower energy density and high resource consumption? Can you explain that to people?
Alan Moran:
Yeah. You start with the first base is you say, okay, well, the cost of the fuel inputs for solar and for wind is zero more or less. So basically the air’s free and the sun’s free. So building upon that, many then argue, “Well, this is the fuel of the future. It’s zero cost as an input.” But as you point out with quoting Epstein’s estimates on the amount of raw materials in harnessing that solar and wind, by the time you’ve actually produced it, it’s obviously far more than zero. But there’s been tremendous advances in terms of the ability to produce from wind and solar. It’s much more than halved over the past 20 years. And probably it will reduce a little bit further in the future, but it follows a kind of a trajectory of diminishing improvements in efficiency and it’s difficult to see major additional ones.
Alan Moran:
But if you look in terms of crude for Australia and other countries are slightly different, but for Australia, if you’re producing wind, by the time you put all the costs of capital involved and that’s from the wind generator, it might cost about 60 or $70 per megawatt hour. Solar would probably cost a bit more, about a hundred. But 60 or $70 isn’t that much more expensive than the cheapest form of sustainable power, which is with coal based, would be about the same amount.
Alan Moran:
So many people would draw off that and then say, “Well, this is obviously the future, and there’s no pollution involved” and we might want to talk about what pollution means here. And it’s going to get cheaper in the past. People have been saying that for 30 years since I’ve been involved in it, but the answer is that for some reason or another, it doesn’t quite cut the mustard that we have never come from a situation where these solar and wind resources are able to be produced and installed in any numbers without a subsidy.
Alan Moran:
And there’s a very good reason for that. Although you might be able to get wind at 60 or $70 per megawatt hour, which is fine, you get it A, from the factory, which is unlikely to be located in your backyard and B, you get it when the wind blows, not when you want it. So in order to actually bring that wind to factories, which produce goods to households which want heating and lighting, et cetera, you’ve got to spend a lot more money. And clearly one aspect of it is that, well, you’re only going to get the wind and solar when the suns shining and the winds blowing. So you’ve got to find out ways to, they call it firming that power by utilising other power to supplement it when it’s not available.
Malcolm Roberts:
So what you’re saying then is that with wind and solar, you still have to have other sources of power or storage devices. So that’s additional cost.
Alan Moran:
Right. Yeah. And not only that, but you talked about density before and because this is the less dense form of power, in other words, you think in terms of huge power stations, they pump out electricity and it then goes through the wires to the town and to the factories. This is far more dispersed as power. So there’s a lot more wires required. And I think this is graphically illustrated by the Labour parties policy in Australia, which is to say that they’re going to spend $20 billion of taxpayers money and another 70 billion or 60 billion in terms of private sector money to replace the grid. In other words, they call re-powering the future. So that grid today, the grid of tomorrow, which they envisioned would cost $80 billion. Now you can contrast that with the grid we have at present, which cost only $20 billion.
Alan Moran:
In other words, so you’re not only going to have this firming power, but you’re going to have a lot more poles and wires around the place to ensure it is delivered. And even then, you’re unlikely to ever have enough firming power to actually cope for situations where there are lengthy, what’s known as wind droughts. And these can go for weeks on end where there’s hardly any wind at all. And in that case you very quickly run out of any kind of [inaudible 00:28:56] that would be feasibly constructed batteries or pump hydro or whatever you quickly run out of that.
Alan Moran:
So you never get the degree of security. So it’s got the three strikes against it is A, you’ve got to firm it up. And that $50 very quickly becomes doubled or more, far more. And B, you’ve got to transport it to where people need it and that adds another 30 or 40%. So even before you started thinking about what the implications are for ensuring a hundred percent availability, which is what we have with fossil fuels and nuclear and hydro, you’re into a situation where the energy costs three or four times what it would cost under the previous systems or present systems of coal, oil, gas, et cetera.
Malcolm Roberts:
That’s startling. So can you just answer and explain to me please and our listeners, you said that you have to get the power from the power generation at the solar panels or the wind turbines to the industrial areas, to the residential areas. You’d have to do the same with coal and nuclear and hydro. Why is it so much greater for solar and wind?
Alan Moran:
Yeah. If you’ve got a hydro or station, it’s compact. The energy is produced in a compact way. You just send it down a wire. Whereas if it’s from a wind farm, you’ve got hundreds and hundreds of turbines you’ve got to actually link together and push that power into where it’s needed into the households and into the factories where it’s needed. Hence the reason why the consultants who did the report for the Labour party in Australia came to the conclusion that you would need four times the amount of transmission that we need with the present system.
Malcolm Roberts:
Thank you. That’s a great explanation. And firming is just backup power for wind, solar and wind are unavailable due to nature’s variability. So that’s an additional cost that, excuse me, coal, hydro, and nuclear don’t face. There’s also the matter of stability isn’t there? There, I think it’s called synchronous power. Coal, hydro, and nuclear have synchronous power. They’re very, very stable. Whereas solar and wind are highly unstable because they’re asynchronous.
Alan Moran:
Right. So you have to spend a lot more money in terms of the grid in terms of capacity and various devices along the grid to actually allow the operations of this electricity without installing the whole system. It’s a bit like an air block in a peshel pipe in the car. You’ve got to prevent against that. And that does cost quite a lot of money and is an additional cost which you have to incur through a wind rich system, which is not there with the systems which are mechanical systems, a lot of heavy electricity and they continue churning along. Even if you stop the coal, they continue churn along. Whereas the wind farms, as soon as the wind stops blowing, they virtually stop straight away.
Alan Moran:
So you have this system where you’ve got to discontinuity, an immediate discontinuity, and you have to spend a lot more money in terms of either supplementing that and the modern way I suppose is batteries or adjusting the way it’s transmitted in the system to allow that continuity. Because of course, if you lose a continuity in [inaudible 00:32:51] a blackout and it’s quite a serious event to actually reconnect.
Malcolm Roberts:
Especially in some industries like aluminous melting and the whole thing is ruined.
Alan Moran:
Yes. Yeah. Aluminous melters have worked the way towards allowing cessations of power for some time, usually about an hour before they totally seize up. But aluminous melters could not survive more than an hour or so without constant power.
Malcolm Roberts:
Let’s just summarise quickly the various costs. Hydro, my understanding is hydro’s the cheapest.
Alan Moran:
It is the cheapest, but hydro typically only works for about quarter of the time. It’s not necessarily like that if you’re in a country like Norway, basically it’s a lot of water and not many people. So the hydro is operating for about maybe 80% of the time. But in Australia, even if we hadn’t stopped doing more hydro, hydro would never supply more than about 10% of our electricity.
Malcolm Roberts:
Yes. I accept the unreliability, except in areas where there’s constant rain and there aren’t many areas like that in Australia. We’ve got high rainfall areas, but they’re not necessarily constant. So places like Quebec in Canada, Norway like you said. So hydro in a pure sense is the cheapest by far, but it’s not always suitable. And in Australia it may not be reliable.
Malcolm Roberts:
The next cheapest, as I understand it, overall is coal. Then the next cheapest is nuclear. And it’s interesting by the way, they now classify hydro as renewable. And it seems to me that’s done to pump up the amount of renewables, give people confidence that they’re coming when they’re not. So hydro, coal, nuclear, and then a long way behind comes solar and wind. Is that correct?
Alan Moran:
Yeah, I think hydro is a special case, at least in any country other than say Norway and some degree in New Zealand as well, which you’ve got immense resources of hydro compared to the population. Hydro is only ever going to be used intermittently, but is controllable. So you’d only use it when for peak periods. Basically, that’s what it’s designed for. But in Australian terms, coal electricity would be 50, say $50 per megawatt hour when you’re going to quantify all this.
Alan Moran:
Gas, well, it depends on what the price of gas is, but when the gas price, before it took off like mad in the last few months, gas would be about $70. Now it would be three or $400. Nuclear is always difficult to place because my reading of it, nuclear would be rather more than that, more like $80, but the price could come down and we might talk about that a little bit later.
Alan Moran:
But yes, solar, firmed solar to the main grid, to the main demand nodes, you’re probably talking about 150 and wind about 120, 130, 140. And that’s before you actually start talking about some of the issues which you mentioned in terms of stability where they do cost a lot more management to actually offset their inherent disadvantages in terms of abilities to supply things which are called reactive power, for example. Inability to do that cost a lot more. So you’re talking again about that kind of hierarchy of costs. Now in terms of the future… Sorry, yeah.
Malcolm Roberts:
So just summarising there, Alan. Coal, about $50 per megawatt hour. Gas around about 70 if you take away the current blip, but if we return to gas prices they were several months ago, then $70 per megawatt hour. Nuclear may be around $80 per megawatt hour, many variables. Solar wind, when they’re firmed, then they’re $150 per megawatt hour, which is three times the price of coal. And plus, on top of that, stability factors for managing their instability. What about storage? If we wanted to go to complete solar or even 70% solar and wind, wouldn’t we need to have mammoth storage capacity?
Alan Moran:
Oh yeah. Many more times the Snowy 2 proposal, which of course is a proposal which proposes-
Malcolm Roberts:
We can talk about that. We can talk about that later.
Alan Moran:
Yeah. The amount of stories from batteries… See, it would not even be conceivable to do it through batteries in the present technologies. Batteries can perform quite a useful task in a wind rich and solar rich environment which we have right now, but it’s just basically for seconds, rather than hours. Even the most comprehensive battery system you would conceive of in Australia, which would cost billions, hundreds of billions of dollars, even that would only give you a few hours supply if you were doing without fossil fuels and hydro, well, with some limited hydro and batteries, it would cost hundreds of billions of dollars, but that would only give you a buffer of about a couple of hours. So batteries aren’t a solution in the end for the so-called wind droughts, which can go for days.
Malcolm Roberts:
Right. And solar droughts that can go for days in the same way with heavy cloud cover. So not only is solar and wind three times the price of coal, it is highly unreliable and very insecure and very unstable. So what the hell are we doing?
Alan Moran:
Well, and this is the irony where some of the detractors of coal will say, “Oh, all the coal power stations broke down and that caused a problem.” The irony is that wind breaks down every minute. It sort of varies almost by the minute, certainly by the hour. And solar varies quite considerably during the day as a result of cloud cover and of course [inaudible 00:39:51] varies from possibly a hundred percent capacity factor to zero in the night times. So the reliability issue of the renewables is massively understated in terms of its dangers by its adherents.
Malcolm Roberts:
Well, on TNT Radio, we are free to actually tell that truth because the only thing TNT Radio mandates is truth.
Alan Moran:
Right.
Malcolm Roberts:
So let’s go to an ad break. And when we come back, we’ll talk about the term pollution and we’ll talk about the cost so far to Australia and to Australians and families and businesses and jobs and employment of this mad swing to solar and wind. And we’ll talk about how much it will cost to continue to a hundred percent of world energy coming from solar and wind. It’s fundamentally impossible. We know that. But if we were to do it, it would cost a huge amount. So you’re on TNTradio.live with economist, internationally renowned economist, Dr. Alan Moran and this is Senator Malcolm Roberts. Stay right there, come right back in a minute or so and we’ll have more of this amazing economist telling us the truth about energy.
Malcolm Roberts:
Welcome back. This is Senator Malcolm Roberts with my guest, Dr. Alan Moran, internationally renowned economist. And we’re talking about energy, something that is really starting to come into people’s hearts and minds and lives and livelihoods these days. Alan, you raised the word pollution. Now in response, I would say two things. First of all, the word pollution comes to mean something like sulphur dioxide, nitrous oxides, particulates, toxins that impact life. Now, carbon dioxide is a trace gas essential for all life on this planet. And the level of carbon dioxide in the atmosphere does not affect climate. The level of carbon dioxide in the atmosphere is not affected by humans. So carbon dioxide is in no way a pollutant. We do not control the level of it when we produce it at the levels we do produce, it’s nothing like a threat to us.
Malcolm Roberts:
In fact, the CSIRO’s climate science team when I’ve put them under a scrutiny under cross examination, they have admitted that they have never said that carbon dioxide from human activity is a danger and needs to be cut. They’ve never said it, yet politicians tell us it is. Politicians also say that this gas that they’re exhaling is supposed to be a pollutant. So koala bears are polluting our planet according to them. Am I on track with that definition of pollutant? Because the real pollution, the sulphur dioxides and nitrous oxides and particulates and others that used to come out of coal-fired power stations no longer do because they’re scrubbed out. We’re basically pollution free and all we’re producing from a coal-fired power station is water vapour and carbon dioxide, both essential for life on this planet. Am I right?
Alan Moran:
That’s right. We’ve sort of gone into new speak in terms of what is pollution. It used to be, as you say, carbon monoxide or sulphates or whatever, and it’s now shorthand, everybody says, “Oh, highly polluting fossil fuel stations.” Well, the only pollution, and it’s not pollution, of course, is you just said, it’s carbon dioxide emerging from them. And the levels of people saying that this is a dangerous pollution, well, it’s a trace gas, and we’re talking about 300 parts per million that is gone up to more than 400 parts per million, was a lower 300. It’s been-
Malcolm Roberts:
400 parts per million is just 0.04%. It’s 4/100 of 1%. It’s a trace gas because it’s bugger all of it.
Alan Moran:
Yeah. If there was like 10 times as much carbon dioxide in the atmosphere as there is now, you might start feeling a bit sleepy occasionally. Certainly that amounts people, some Mariners, for example, have that much carbon dioxide in their atmosphere and ships and appear operate, well, obviously operate successfully. It’s not a poison in that sense, in any conceivable amounts that it would reach or has reached in the past. The higher levels of carbon dioxide are associated with different climates.
Alan Moran:
Now whether the cause and the effects of this is debatable still. But it is argued that if carbon dioxide levels double in the atmosphere, which they may well do in the next a hundred years, that this will increase temperatures by about one degree Celsius and others then go on to argue that want to have a feedback of this through water vapour, then the temperatures could increase by more 2%, 3%, some even say 4% degrees. I’m talking Celsius.
Alan Moran:
All of which is said to be disadvantageous, although if you do the sums on that, you can’t really find any net disadvantage. And a lot of people would prefer to living in warmer climates than in colder climates, most people indeed. It is not a pollutant in that sense. The amount of additional carbon dioxide that could conceivably be put in the atmosphere is limited. And if there is a relationship between that and temperature, it’s a relationship that tails off with each increment until it becomes virtually zero.
Malcolm Roberts:
Well, I know that professor Ian Plimer, wonderful geologist and award-winning geologist, an Australian who’s worked overseas, worked in many fields, knows his stuff, he said that when carbon dioxide levels in the atmosphere, many millions of years ago, were five times what they are today. Instead of being 0.04%, they were 0.2%, that life flourished because carbon dioxide is a stimulant for life. It’s a fertiliser for plants and it’s essential for all animal and plant life on this planet. And the other thing, we don’t need to discuss this here because I’d like to move to another topic about carbon dioxide in regard to the environment, humans do not control the level. Some people have said, and I’ve cross-examined the CSIRO, they have never been able to provide me with any effect of carbon dioxide on climate.
Malcolm Roberts:
None at all. Not even temperature. None at all. And there isn’t any. But we’ve had an experiment twice now in recent years following the global financial crisis in 2008. 2009 was a major recession around the world because of the global financial crisis and there was less hydrocarbon fuel, coal, oil, natural gas used in 2009 then in 2008. And carbon dioxide levels in the atmosphere continued to increase, even though we had a massive cut in human production of carbon dioxide, which is what the UN wants and our governments want, but it had no impact on the level of carbon dioxide in the atmosphere.
Malcolm Roberts:
The next experiment was in 2020 when we had an almost depression around the world because of government COVID restrictions and the level of carbon dioxide produced by humans decreased dramatically due to reduced use of hydrocarbon fuels, coal, oil and natural gas. And what happened to the level of carbon dioxide and atmosphere? Continued increasing. So we have no effect on that and that’s what the science shows as well. But there is another aspect and that is recycling. A coal fired power station lasts what, 50 years. A nuclear power station, I don’t know how long that lasts, perhaps you could explain. A dam lasts for many, many decades. Solar and wind installations last for about 10 to 15 years under current technology and then they can’t be recycled. Is that correct?
Alan Moran:
Yeah. More or less. Certainly coal power stations last a minimum 50 years. Some of them last much longer than that. I don’t know how long nuclear lasts because they’ve not been around that long, but certainly 50 years. And as you say, the best you could expect from wind and solar would be 30 years, but more likely far less than that, more likely 20 years. And yeah, there are issues because the raw materials in which their base can’t just be recycled or can’t be added onto, they’re totally different [inaudible 00:50:47] so you got to get rid of them and dump them. And there are a lot of suggestions, well, more than suggestions, there’s a knowledge that they’ve got highly toxic ingredients, which certainly need to be carefully treated to avoid getting into the water supply and polluting the land generally.
Alan Moran:
As you say, there’s no pollution from nuclear or fossil fuel plants or virtually no pollution at all. So yes, there are huge costs of actually eradicating the materials, which are longer used. And actually, unfortunately it is around the world is there are no bonds required of wind farm, solar farms.
Malcolm Roberts:
Good point.
Alan Moran:
Whereas, if you want to open a mine anyway, you’re paying a bond up front for electrification and certainly-
Malcolm Roberts:
So could you explain what that bond is?
Alan Moran:
The bond basically says… The authorities say, well, you built a mine, you built a power station, whatever else. And when it’s finished and whatever it is year’s time, you basically got to rectify the land so that people don’t fall down shafts or people that don’t live on what may be some toxic materials. You post a bond. Basically, it’s a requirement. Sometimes it’s a cash requirement, but it’s always enforceable on the power station or the mine. As far as I know, anywhere in the world, there are no bonds on wind farms or solar farms. There’s certainly none in Australia. And so basically we are coming to a situation where these facilities, many of them are 20 years old now, will be required to be removed and stored and dismantled. And it’s not quite clear how that will be covered-
Malcolm Roberts:
That’s being kind, not quite clear.
Alan Moran:
[inaudible 00:53:00] problem.
Malcolm Roberts:
I was just saying that’s being very kind. It’s not quite clear how they’ll be recovered and reclaimed. They’ve got no idea. And there’s no responsibility. As you said, when a mine owner clears some land, he or she must pay a bond to the government and they get the bond back if they reclaim the land and they’re supposed to reclaim the land. And that’s fair enough. But there’s no such bond for solar and wind, which gives them even more an unfair advantage. So there are many unfair advantages and yet, despite that, despite the fact that the society gives them a crutch, solar and wind now account for 2% of the world’s energy after decades and claims of price reductions. We’ve got 2%. And that’s cost us, I’ve forgotten the figures, but it’s many billions of dollars, Alan.
Alan Moran:
Yeah. Well, we know how much it’s costing us in Australia and Germany. I think we’re talking trillions of dollars there. It’s costing us somewhere north of $10 billion a year, we’re spending every year in terms of the subsidies for wind and solar. And we have more than 2%, it’s more like 15% of supply in Australia. But it’s a colossal cost, which isn’t present in hydrocarbons, which of course, as you pointed out, are not only cheaper as a result, but more reliable.
Malcolm Roberts:
Right. And we are coming to the top of the hour and we’ll be having a break for the news and some advertisements, then we’ll be coming right back. So stay right here because Alan Moran will be back. We’ll continue the talk about energy. We’ll talk about the moral case for hydrocarbon fuels, coal, oil and natural gas and current policies. Because Dr. Moran, to give you an inclination, has done a comprehensive report on the cost of solar and wind. $13 billion a year additional costs. $1,300 for each family on average. $19 billion to the economy. And for every so-called solar and wind job, there are 2.3 jobs in the real economy that have been destroyed and lost.
Malcolm Roberts:
We’ll be right back after the news to hear more from this wonderful economist talking the facts and the truth accurately about something that is so important to human life, the primacy of energy.
Part 2
Speaker 1:
This is the Malcolm Roberts Show on today’s news talk radio, TNT.
Malcolm Roberts:
Welcome back. This is Senator Malcolm Roberts, and I’ve got my guest today, Dr. Alan Moran, an economist who specialises in understanding how governments waste money and what to do about stopping them from wasting money. And he’s a specialist on the cost of energy and the generation and supply of energy and its importance in society. Now, before the break, I mentioned four figures. The cost of subsidies and policies for solar and wind poses an additional $13 billion a year on the Australian economy. That’s the additional cost to our electricity sector, not the cost, the additional cost of solar and wind. That averages out at around $1,300 per household.
Malcolm Roberts:
Now, Australia’s median income, perhaps Alan will correct me, but Australia’s median income, I understand, is about $49,000 a year. Half the people in Australia earn more than 49,000. Half earn less than 49,000. After tax, what’s that? Around, say, 39,000, $40,000. $1,300 a year is one hell of an impost to put on people earning less than $49,000 a year. The subsidies on solar and wind are a highly regressive tax. The poor are the ones who pay proportionately more for this government largess. And who benefits? Billionaires, Chinese multinationals, other multinationals, because we’re subsidising them to destroy our power sector with subsidies from solar and wind.
Malcolm Roberts:
Third figure, the additional cost to the economy is $19 billion a year. And I’ll ask Alan to explain these in a minute. And for every wind or solar job supposedly created, there are 2.3 jobs in the real economy lost. Australia has the highest level of subsidies for solar and wind in the world. Everywhere, as solar and wind subsidies increased, the price of electricity has increased dramatically. We have gone from being the lowest priced electricity in the world to the highest price. And in addition, the United States is the second. I think that’s correct, isn’t it, Alan? The United States has the second highest level of subsidies, and they’re half Australia’s levels. So, we are going crazy in this country supporting something that costs three times the cost of a coal fired power station to produce electricity. Solar and wind is three times the price. What the hell is happening, Alan?
Alan Moran:
Well, I mean, you can estimate those numbers a different way, but they’re certainly of that order. The actual costs that I’d estimate, the tax, the direct tax effects of the subsidies, is about $7 billion a year, but that has an effect in boosting the cost of electricity considerably, and perhaps to the level of 19 billion that you mentioned there. But whatever that taxes level was, the $19 billion has being demonstrated now to be a massive underestimate, because that was at a time when it was boosting the price of electricity from, say, it’s underlying value of $60, that’s a ex-generator, to something of the order of $100 ex-generator.
Alan Moran:
Well, since April of this year, well, right now, it’s 300, even though the market seems to have recovered. In other words, it’s three times as much as it was not long ago. And when we were in the crisis and the market was suspended, it was 10 times as much. Now, so, there’s issues about the subsidy as such, which is bad enough. You can figure what that is. But essentially, it’s poisoning the whole of the energy market. And repercussions of that is that the price goes shooting through the roof as a result. And I mean, not only is it hardship for individuals, indeed, it’s almost certain that in the next few months that the average price of electricity to households will double. I mean, it’s just the pure arithmetic.
Malcolm Roberts:
What?
Alan Moran:
They will double. The pure arithmetic is that the generation component is now three or four times what it was at Christmas time. That will have to pass through. There is no other way of doing it. It’s basically, here is the cost to the retailer, essentially, and that cost gets passed on to the consumer. So, they will do. This has already happened in the UK. UK doubled in 1st of June of this year as a result of these same factors. It will increase there again by another 50% in September. So, not only do we have this high cost imposed through the subsidies, which we all pay, but the subsidies are driving out the lowest cost available generation, which in our case is coal, and raising the aggregate price of electricity to astronomical levels, which are a real burden on the household in just of themselves, but then that burden is passed along the lines through it being incorporated in the goods and services we buy as well. So, we-
Malcolm Roberts:
So, let me just understand that. So, what you’re saying is that by themselves, the subsidies for solar and wind dramatically increase the price of electricity. I get that. But there’s an additional factor, and that is that solar and wind destroy the investment in coal. So, coal pulls out, which, because it’s the cheapest form, further raises the price of electricity.
Alan Moran:
Right. Well, I mean, basically, we first saw this in 2017 in Australia, with the loss of two major power stations, one in South Australia and one in Victoria. We saw then the price of electricity ratchet up by double. That’s with the ex-generators, which is a third of the total cost to the household, if you like. But we saw that cost double. And it came down because of COVID when we stopped using as much electricity, but with the recovery from COVID, we’ve now seen the prices escalate through the roof. And the reason is quite simple, because we’ve got subsidised renewables, which operate… The marginal cost of them is zero, more or less. We know that the cost of them is high, but the government subsidise them and sank costs in there. So, they will always make themselves available whenever they’re available at zero cost.
Alan Moran:
And that plays havoc with the economics of coal and gas, to some degree, and certainly uranium as well. And it’s forcing these into unprofitability. And when they’re unprofitable, they close. And when they close, the price shoots up again. And so you have this zigzag ratchet effect of the price of electricity going up and up and up as the poison in the system, which is the renewables, takes out the more efficient fossil fuel or nuclear plants and raises costs. And that’s happened. The nuclear plants, of course, are being taken out in the US and even in France, which has other problems with its nuclear plant, but even in France, and certainly Germany where the Greens are now in control and are closing nuclear as fast as they’re closing coal, in fact, faster than they’re closing coal. So-
Malcolm Roberts:
Germany’s actually opening coal.
Alan Moran:
They’re opening some new coal now, so they’re resurrecting coal. Actually, the irony is we can’t do that because when we closed ours, the state premiers arranged for them to be dynamited, which was just the most-
Malcolm Roberts:
Yeah, crazy.
Alan Moran:
… criminal action you can imagine.
Malcolm Roberts:
Terrorism.
Alan Moran:
They’ll probably get away with it. But at least in Germany, being Germans, when they closed it on ideological grounds, they left the plant basically available to be resurrected. But yeah, so we’ve got these situations. It’s difficult to see the cost, the aggregate cost. I know there’s a McKinsey’s report came out recently saying, “Well, the cost of going net zero in Europe will be a 5% reduction in everyone’s incomes.” I mean, that seems much smaller than you would imagine given the fact, basically, that energy, as we’ve discussed, is so much a part of our ability to live comfortably and our ability to produce efficiently that if we are abolishing this low cost energy, which we’ve developed painstakingly over the last 100 years and replacing by a superior form of the wind that drove us until the middle of the 19th century, then we basically are going to be losing an awful lot more than that.
Alan Moran:
And we’ve got this malaise throughout the Western world. It’s hard to find a Western country which is bucking the trend. Certainly, President Trump’s America was at the time being, and certainly other countries are bucking it like India, like China, like Russia, like Indonesia. These countries basically pay lip service to the notions that the Western politically correct people require about the importance of renewables, but basically don’t know about it.
Speaker 4:
I’m learning how to choose the right audio apps for you.
Malcolm Roberts:
So, let’s have some idea of what it would cost to go 100% solar and wind. Because can you recall, I can’t recall it, the number of billions of dollars or tens of billions of dollars that it has cost to get 2% of the world’s energy onto solar and wind? Do you know that figure?
Alan Moran:
Well, I think there’s a trillion dollar actually being mentioned, but that may have just been Europe. So, it’s probably a bit more than that. And the Germans have higher proportion of wind and solar than we do, a little bit higher anyway now. As you say, we have spent more per capita than anybody else. It’s difficult to know. It’s difficult to disaggregate what the taxes are because there are different local taxes and federal tax. It’s difficult enough in Australia for the work which you’ve cited before, where you’ve got to find out how much state governments are paying, how much federal governments are paying and that some of them aren’t. Obviously, they’re not just from the government budgets, they’re from the regulatory budgets. And the governments make it very difficult to actually estimate those sorts of numbers. Although, I’m sure they’re known internally how much they would be, they don’t publish them. They used to, actually. They used to publish back 15 years ago how much was being spent to assist renewables, but it became less fashionable once the cost became apparent.
Malcolm Roberts:
Oh, that was the other figure from that report too. Governments are telling us that the proportion of our electricity bill that we can attribute to solar and wind is just six and half percent. In fact, government’s own figures, state and federal, show it’s 39% of a power bill. So, we can lop off 40%, basically, off our power bill if we stop these stupid subsidies that are just killing our industry. So, let me tell everyone a story. This is a true story. Pauline Hanson, Senator Pauline Hanson, and I received phone calls from some farmers living in the valley of Neera Creek near Kilcoy, which is not far from Brisbane. And Neera Creek, the water flows into Brisbane River, which flows into Wivenhoe Dam, which is a storage for water that goes to two and a half million people in Southeastern Queensland, including all Brisbane people.
Malcolm Roberts:
Now, Neera Creek, we got the call because farmers there were upset that the Chinese appeared to be convincing the state government, the state Labour government, to convert the area into a solar complex. I won’t call it a solar farm because that’s a cute term. That’s why they’ve used it. Solar and wind pushers are using the term “farm.” It’s a solar industrial complex. Neera Valley, Neera Creek, has very good agricultural land, tillable land for crops in the valley floor. On the lower slopes, prime beef country. They wanted to build the biggest solar industrial complex in the Southern hemisphere and possibly the world. There’d be 10 kilometres of a hillside completely covered in solar panels.
Malcolm Roberts:
Now, think of the consequences. The farmers there know that in flooding, the solar panels in the lower parts of the valley would be seven metres underwater. We know that there are carcinogens coming off solar panels. I think it’s cadmium and two other toxins, and also lead. So, this water, and then this whole area is under threat from hail storms. And so what would happen is we would have these carcinogens going into Neera Creek, going into the Brisbane River, into Wivenhoe Dam and throughout Southeast Queensland, into drinking water. So, that’s the first impact. The second impact, sterilising wonderful land, increasing the erosion of top soil. The third aspect is that we users of electricity in Queensland would subsidise the Chinese. And I’ve got nothing against the Chinese. They’re savvy business people. We’re the mugs with voting the governments in that we’ve got. We would be subsidising the Chinese to instal these solar panels in Neera Valley.
Malcolm Roberts:
That would then raise the price of electricity in Queensland. That would then shut some manufacturing facilities. It would impact the livelihoods of many Australians. It even has stopped the pumping of water in agricultural land. So in a drought, there were some farmers in Central and Southern Queensland saying that they would not be planting fodder crops because of the price of pumping water due to electricity prices. Then it goes on. We take our coal, which is the best in the world, and we can’t burn it here because of the green policies, but we can export it to China. So it goes over land, then it goes over the sea thousands of kilometres, then over to China, then over land again to a power station in China. The Chinese use coal, and they produce nine times the amount of coal Australia produces. We produce 500 million. The Chinese produce 4.5 billion tonnes of coal a year, nine times what we produce.
Malcolm Roberts:
When they import our coal, they feed it into power stations and they produce coal reportedly at eight cents a kilowatt hour, and that’s what they sell it for. Australia sells it for 25 cents a kilowatt hour. So, the largest cost component of manufacturing used to be labour. It is now electricity because we’re using machines that use electricity instead of humans in manufacturing a lot. So, that means we are destroying our manufacturing sector and that goes to China. So, we dig up our coal and send it to China to make solar panels. We dig up our coal and send it to China to make wind turbines. They ship it back here. We pay them subsidies to do so. Then we pay some Chinese companies and other multinationals subsidies to run this, to destroy our energy sector. This is insane, Alan.
Alan Moran:
Yeah. And we’re seeing the results of this in terms of the closure of many parts of manufacturing, et cetera, and in terms of some of the costs of living which we’re seeing. The interesting thing we’re seeing in Australia at the present time, we had a wages case where the Commonwealth government advocated a 5% increase in wages. Fair enough, because prices have gone up. Well, why have prices gone up 5%? Well, they’ve gone up 5% because of the energy crisis which we’ve created, and that’s only the first instalment, 5%, by the way, which has resulted in these high costs.
Alan Moran:
There’s an interesting comparison of that with Europe, which has got lots of strikes. I think there’s a rail strike in the UK now, but lots of strikes breaking out in the EU and in the UK, because basically they’re facing a situation where the energy crisis has resulted in prices increasing at about 8%, whereas wages have only increased at 2%. Why have wages only increased at 2%? Well, because that’s all that can be afforded in terms of the productivity. The costs, and therefore the productivity of European industry, has dropped about 8% over the past year as a result of this energy crisis. And it will go down even further, as will ours. So, there’s an impasse occurring where politicians, populous politicians, and nothing wrong with politicians, as you know, but-
Malcolm Roberts:
Well, I disagree with you. There’s a lot wrong with the bastards.
Alan Moran:
But politicians say, “Well, it’s unfair. It’s unfair that people should be forced to actually have their living standards reduced.” But the fact of the matter is is that living standards depend on productivity. And if your productivity goes down, so do your living standards. It’s just a law of gravity which is not possible to counter in any sense. So, we have a situation where we have purposely reduced the living standards in Australia, and in other developed countries as well, by adopting inefficient forms of energy. As a result of the Ukraine crisis, this has come to a head. It’s not caused by the Ukraine crisis, by the way, but it brought it to a head because it actually highlighted the deficiencies that we have in the economies. It’s brought it to a head and therefore then we can see that we are less well off now.
Alan Moran:
As a result of that, people are unhappy. They don’t understand why we’re less well off. Politicians told them the new world, we’re in this energy transition towards renewable energy away from the old stuff, and it’ll be great for us all. Well, wait a minute. It’s not. We’re losing a lot of dough. We’re losing productivity. If we lose productivity, your wages have to go down. There’s no alternative. So, we are facing this sort of crisis right now. And one of the answers to this is, “Oh, right, well, we’ve got to power ahead with the renewables.” And that’s a refrain we’re seeing in Australia, in the US, and in Europe. Well, this is what’s caused the problem in the first place and yet we’re going to actually double down on this problem. Essentially, the renewables have caused us to lose a lot of productivity by… It’s replaced with high prices. And we’re actually going to do more of those. It’s just crazy. And we are going to see further living standard falls as a result.
Malcolm Roberts:
I love your forthrightness. There’s one other thing that we’ll mention before going to a break, and that is that this is immoral because what’s happening is that in the developed nations, the UN basically is discouraging the use of hydrocarbon fuels. That means people have to keep burning dung, which is a heavy pollutant and a health hazard, or do without electricity, or have very expensive solar and wind, which is basically doing without electricity because they’re so unreliable.
Malcolm Roberts:
So, this is stopping humans in undeveloped countries or third world countries from actually enjoying what we used to enjoy. This is inhuman. It goes against the environment. It is destruction. It is anti-civilization, anti-environment, anti-human, and it’s all fed by deceit. When we come back, we will talk further about these matters with Alan Moran and then get onto some solutions, because this man has got some solutions. So, we’ll be right back. Stay with us. Hear from us again in a minute.
Speaker 1:
Telling the truth is the only mandate we believe in. Today’s news talk radio, TNT.
Malcolm Roberts:
This is Senator Malcolm Roberts with outstanding, internationally renowned economist Dr. Alan Moran. We’re discussing something very important for human progress, and that is the price of energy. The advertisement we just heard said, “It’s criminal to waste energy.” Alan, I would suggest it’s also criminal to destroy energy, which is what’s going on. The biggest factor in the last 170 years of unparalleled, unprecedented human progress, material, health, longevity of life, ease, comfort, security, safety, the biggest factor driving that dramatic improvement in 170 years, we were scratching around in the dirt, having being subjected to nature’s vagaries, being subjected to famines, and in the last 170 years, we’ve basically become free of that, we have been liberated, we have enormous standard of living improvements, unprecedented, and that was due to the ever decreasing real prices of energy, because that increased productivity, as you so eloquently said, that increased our prosperity, increased wealth, as you said, for everyone. And now we are reversing that with criminal, dishonest, deceitful political policies. Is that correct?
Alan Moran:
Yeah, it is. The politicians, in some respects, are leading this, but in most respects, as often happens in politics, they’re following others. And there is an ideology which is being developed through the institutions and whatever, through education institutions, that coal is bad and wind is good and that wind is cheap. And your very good friend from CSIRO produced a lot of material which purports to prove this. And when you actually ask them then, “Do you now support then the emasculation and prevention of all subsidies for wind?” they sort of hum and haw and look at their feet, in fact. So, they obviously know that’s untrue, but they hope that in future, it might be true.
Alan Moran:
And then there’s a whole lot of people who gain from this because they’re wind farm developers or whatever else, and they want the subsidies as well. And so you’ve got a mass psychosis. If you look at the last election in Australia, you call yourselves the Freedom Parties, but the Freedom Parties probably only got about 12% of the vote. We’re talking about Senate here. The Liberal Party maybe supports half of them, maybe support that, Liberals and Nationals. But you can come to a situation where 70% of people voted for, in some cases, we have this phenomenon of the Teals and the Greens, voted for an intensification of the eradication of fossil fuels, of hydrocarbons.
Alan Moran:
So with the politicians, basically, most of them were just led by the nose. There are very few political leaders in the country, and obviously you’re one, who basically call it out. The rest of them just give back what people want. And we’re seeing then, as a result of that, these very high prices which have come to a head this half year. And people are saying, “Well, that’s only a blip. The prices are going to come down.” Well, they won’t. They’ll come down from the $15,000 a megawatt hour from the $50, $15,000 a megawatt hour until recently. And then they were controlled at 300. But since they’ve become uncontrolled the last day or so, the price has stayed at $200 a megawatt hour.
Alan Moran:
Well, why is that? Well, basically, because we’ve not been investing in power stations because governments haven’t allowed it. They haven’t allowed access to new coal resources for power stations. They certainly have encouraged the attack on fossil fuels, which has come through the environmental, social governance kind of rules within finance capital. They certainly haven’t protected mines from depredations from activists. And essentially what we’ve seen is a slow down and decline and a reduction in the capital base of these very efficient producers of energy with the cataclysmic consequences we’re now seeing.
Malcolm Roberts:
And let’s go back to something you said a minute ago, people who gain from this distortion, this criminal activity. It was reported that Peabody Energy company used to be, and I think it still is, the world’s largest public company producing coal. I mean, the Indian government may produce more. It’s a state owned industry there, horribly inefficient, but it produces more. And other organisations, state owned, may produce more. But Peabody was the largest public company, privately owned, if you like, non-government. When Obama was in power, as the president, the Democratic Party really put a lot of pressure on Obama to talk down coal, to really badmouth coal. And it’s said that George Soros owns the Democratic Party. It’s basically his little puppy. It does what he says.
Malcolm Roberts:
Obama dutifully talked down coal because he said it would be banned. Basically, it would be. And the Department of Energy in the United States came up with the policies to destroy the use of coal. Such was the talk that Peabody Energy company shares went from $1,100 to 15. That’s a 98% drop. Guess who bought significant chunk of Peabody shares? George Soros became a very large shareholder in Peabody Energy company. Why would George Soros do that? This is his standard practise. It’s been reported many times that he drives down through deceit the value of an industry. And he goes in invests heavily and waits for it to come back up again. The international energy agencies, other forecasts, show that there will be dramatic increases in the use of coal in future. China is trying to make massive increases in coal production. It’s already producing nine times what Australia produces. Indonesia, to our north, produces more, sorry, exports more coal than Australia does now. It’s the world’s leading exporter of coal.
Malcolm Roberts:
So, what we’re doing is we’re destroying the crucible of human progress, and we’ve turned parasitic malinvestments in solar and wind into the destroyers of our economy. The cost of electricity is now prohibitive and hurting families, and it’ll go up higher, Dr. Moran says. It’s destroying industry. Alan Moran has already said that. Manufacturing jobs are being exported. De-industrialization means no future for Australia and no industrial security, no defence security. We don’t make our own defence provisions. It’s destroying agriculture. And then on top of that, these dopey politicians are now saying, “We want to transfer our transport fleet of cars and trucks to electricity.” So, that will add even more demand to electricity. And as we go further into solar and wind, it will destroy… So, we’ll get less production of electricity. So, with less production and doubling of demand due to the conversion of our transport fleet, what will that do to prices?
Alan Moran:
Obviously, it’ll increase them more. I mean, you opened up by talking about Obama. And I think when he first got elected, he said something like, “Now is the time when the oceans stop rising, when the wildfires have ceased and blah, blah, blah, blah, blah.” And he also said, “Look, I won’t stop anybody investing in coal, but if you do invest in coal, you’re an idiot because the policies I have in place will kill coal as we move to this brand new world of solar and wind.” And indeed, in the Present Biden government, Granholm, I think, the Energy Minister, is saying the same sort of thing still.
Alan Moran:
So yeah, I don’t know to what degree Soros is the instigator of all this. Certainly, there are many people who would make money out of it. And certainly, that issue of the collapse in price for coal as a result of government statements is true. And one of the things, an interesting figure coming through in the last few days, is just the level of investment in gas and oil over the past four years is now one third of what it was in 2015 when, if you like, the madness came to a head with the Paris Agreement now on allegedly seeking or seeking-
Malcolm Roberts:
True.
Alan Moran:
… reductions in emission levels, and therefore the abolition of coal to some gas and oil. So, all of these things are self-inflicted. Certainly, there’s issues in the developed world. Some of them have been harassed to actually reduce their own emissions through aid, et cetera. Others, who are smarter, and you mentioned Indonesia, India, China, Vietnam, these are just sailing forward, paying lip service to the politically correct people but then building new coal power stations and gas stations and nuclear stations too. So, the smarter heads in the third world are taking advantage of the market opportunities, if you like, caused by the developing world increasing, purposely increasing, its own costs and industries migrating there. China has about 55% of the world’s steel production, coming on for 50% of aluminium, et cetera. All of this is because basically they have adopted sensible power policies in a context when the West has been retreating from those.
Malcolm Roberts:
Yes. And we see the absurdity of now subsidising electric vehicles, again, with a very troubling high use of resources. Electric vehicles are so much more expensive than petrol or diesel powered vehicles, simply because of their extraordinary appetite for natural resources, expensive materials, expensive metals, exotic minerals, earth, rare earths. But we also see the environmental legacy of their batteries. So, we are going in entirely the wrong direction for the environment. We are going entirely in the wrong direction for productivity because we’re feeding parasitic malinvestments. I think that was a term you coined once, Dr. Moran, parasitic malinvestments. And the instigator, I wasn’t accusing George Soros of being the instigator of this rubbish, I lay the blame firmly at the hands of Maurice Strong from the United Nations. He died in 2015, just before the Paris Agreement was signed. But that man caused all of this.
Malcolm Roberts:
He’s the granddaddy of climate change, the false claims on climate. He was the granddaddy of centralising a lot of the bureaucracy based upon UN policies. That’s the man who did it. Soros and other billionaires are just taking advantage of it. And it’s significant again that it’s the people who are paying. The people who are paying with loss of jobs, exported to China, with increased costs for families, increased cost for small business. And who do they pay it to? Because of the wealth transfer, it gets paid to billionaires who are benefiting from subsidies. It gets paid to Chinese and other multinationals who are benefiting from subsidies. So, we’re wrecking our economy, and we’re paying others to do it. And we’ve got billionaires in Australia and overseas who are making money out of this. That is theft. It’s fraud, because they’re presenting something as it is not for personal gain. There is no need to do this, and yet they’re doing it. So, let’s get onto some solutions. Well, before we go onto the solutions, tell us about the national electricity market, please, Alan.
Alan Moran:
Well, it’s a market which is based on trying to incentivize. It was developed about 25 years ago now, and I had something to do with it in its early days. It’s essentially to say, well, why don’t we have a situation where we inject competition? We have lots of different generators. In those days there was no wind or solar, but there were probably 50, no, more than that, 70 generation units there. Why don’t we get these bidding in how much they’re prepared to give, at different price bands, and the market cleared? It’s just the same way as happens in every other market, aluminium markets, or cotton markets, grain markets, et cetera. And it worked very well. It brought a massive reduction in prices. Partly this was also because there was quite a degree of privatisation at that time, not so much in your state of Queensland, but elsewhere around Australia. And that replaced what were essentially union controlled plants with massive overmanning by shareholder controlled plants which sought to reduce costs and increase profitability.
Alan Moran:
So, we had a situation where it worked very well. The lights stayed on. Prices fluctuated quite strongly, as they’re supposed to fluctuate strongly, but then the retailers took out contracts for different licks of power to ensure that they had insurance against this. So, we saw a massive reduction in the cost of generation in Australia, about a 50% reduction as soon as the market came into operation. And shortly afterwards, of course, the madness started, first of all by John Howard, actually, introducing a renewable requirement, which was progressively jacked up by Rudd. And Tony Abbott tried to stop it. The previous government tried to stop it as well or did something to arrest it, but essentially it ploughed its way forward until we now have 15 or 20% of our supply by this exorbitantly subsidised inefficient renewable power which has undermined the national market.
Alan Moran:
So, what happened then when this came to a head, well, this half year is suddenly, nobody had been investing in coal and we’d been disinvesting in coal. There were no incentives to do so, and, in fact, every incentive not to do so. And so once we started getting back to a reasonable degree of normality post-COVID, the price shot up. And indeed, it shot up all over the world. The gas price, because state governments, with the exception of Queensland, haven’t allowed firms to go exploring for gas, so we’re short of gas as well. They’ve put all sorts of impediments into new coal plants, not only especially domestic, but even international coal plant. We had the experience of Adani mining coal in Australia, selling it to India. It took 10 years to actually get approvals and massive increases in costs required of them.
Alan Moran:
So we are, we’re sort of tying our hands behind our backs and trying to walk forward in that way. And the upshot of once a price bubble started rising globally, we were caught in it. We haven’t developed enough gas locally, so the price of gas went up. The irony, one irony amongst many, is the Victorian Energy Minister started demanding that Queensland gas be sent south to Victoria. Whereas, when the Victorians don’t commit to any gas development whatsoever and the Queensland gas is pretty well fully acquitted in terms of contracts for supply. So this is some of the craziness, some of the stupidity we have of the people who have been elected to parliament and are running the place. So, that’s the national market. There’s nothing wrong with it, nothing wrong with the concept of it, but it can get poisoned by subsidies on some sorts of fuel which affect others.
Malcolm Roberts:
Well, yeah.
Alan Moran:
And people are now looking for ways out of that.
Malcolm Roberts:
Let’s have a debate one day on this, a discussion about the privatisation and about the markets for energy, because I’m a firm believer in competition, it’s excellent, and a firm believer in getting government out, but not where there’s a monopoly. And essentially in water supply, some transport corridors, and some transport facilities like ports, and also some energy sources and energy networks, they can only be one of them. They can’t duplicate them to have real competition. So, that means we’d be giving that to a monopoly. And then we know what happens in monopolies. But your point is, so putting that aside, I’ll just invite you back for a debate one day on that, or a discussion on that, Alan, I know your views are privatisation is good. My belief, and I’m not asking you to comment on this because we need to go to an ad break, and we’ll come back and deal with the solution, so you’ve got some solutions in mind, the national electricity market has been completely destroyed because politics and bureaucrats interfere.
Malcolm Roberts:
So, it’s no longer a market. It’s a racket. It’s a national electricity racket. And what we’ve seen is that government has become the agency for wealth transfer. Citizens of this country have been duped into transferring their wealth through subsidies to millionaires and billionaires in this country. And politicians have become wealth destroyers. Government should be the crucible, create the environment in which people create wealth. What the government’s policies are doing now is increasingly destroying wealth and transferring it to billionaires. So, this is Senator Malcolm Roberts. I’ve got a wonderful guest on with Alan Moran. We’ll be back to hear the solutions from Dr. Moran as to what’s needed to put our energy sector back on track.
Announcer:
This is today’s news talk and the voice of freedom, TNT Radio.
Malcolm Roberts:
Welcome back. This is Senator Malcolm Roberts, and my guest is Dr. Alan Moran, economist. Alan, what are the solutions? Over to you. I’ve handed you-
Alan Moran:
Well-
Malcolm Roberts:
… a hospital pass here.
Alan Moran:
… thanks very much. The solutions? I’ll tell you what aren’t the solutions first off. I mean, one has been highlighted, one possible solution is that we’ve got to double down on renewables. In fact, we heard this in the Australian newspaper. Rod Sims, who used to be head of the regulator, the ACCC in Australia, a corporate regulator, talking about, “We need a carbon tax.” I mean, basically, either he wasn’t aware that we do have a carbon tax, not a very efficient one, but it’s a tax on coal and gas, which is the corollary and the subsidies we give to the carbon-free wind and solar.
Alan Moran:
So, we have a carbon tax already. I don’t know how much he wanted that tax to be. He didn’t specify it, but certainly there’s some estimates of what a carbon tax would need to be to get to net zero, one from the New Zealand Productivity Commission which was something like of the order of 160, $170 per tonne of CO2, which would be a fivefold increase in the price for electricity. So, that’s one estimate of it. There are other estimates. They’re all around that same sort of level. So, carbon taxes are ridiculous. Basically, it’s pouring oil on the troubled waters.
Alan Moran:
Others have come around. A modern one is talking about, “Well, we need a capacity market.” So, we need a market which gives specific payment to coal and to gas and to water to be available when the sun isn’t shining. So, we give them a top-up in terms of their ability to earn income. Of course, that’s complicated straight away by socialist ministers, like the minister in Victoria saying, “Well, we’re not going to give that to coal or to gas or whatever.” So, it makes it absolutely ridiculous if you don’t give it to coal and gas.
Alan Moran:
But the other thing about a capacity market is another distortion. It is the regulator coming in saying how much capacity is needed, remunerating people that way. And we’ve got capacity markets around the world. UK’s got a capacity market. It hasn’t stopped half the retailers going bankrupt. It hasn’t stopped the price of electricity to the consumer doubling. So, I mean, you don’t need a capacity market. You basically need retailers to ensure that they have supplies available. And that’s the way our present market should operate and has been operating until it became unworkable once we subsidised so many renewables in there. So, that’s a couple of solutions.
Alan Moran:
Another one, oh, a great idea, lets ban exports of gas and of coal and redirect them to the domestic market. Well, that’s like saying to firms, “Well, you went and developed this productive capacity and you got some contracts from China and Japan and India or wherever else. Now we’re going to just stop you selling that and you’re going to have to sell it to the domestic market,” presumably at a cheaper price. Well, that’s a great way to go forward in terms of a sovereign risk placed on any investments and thereby undermining the investments, putting a greater premium on them.
Alan Moran:
So, the simple solutions don’t work like that. The only solution you can do is basically we have to get away from subsidising all power, all power or, in fact, almost everything. We have to get away with saying, “Those subsidies end now. End now.” But that is not going to be a quick fix because the subsidies have taken 15 years of subsidies before they actually undermined the market. And they won’t be wound down, or their detrimental effects won’t be wound down quickly. They will gradually be wound down. Say, if we stop all subsidies, then there will be no more renewables built. Believe me, there will be no renewables built if there are no subsidies.
Alan Moran:
We also have to pair that with certain aspects like forbidding firms to discriminate. We have a situation where banks and insurance companies will not give cover, will not give funding to selective sorts of investments in terms of coal, oil, and gas. And ironically, it reduces availability of investment to financial resources in China, of all places, and India, which makes it more difficult to actually maintain and to develop new capacities. But we have to then warn firms that they must not discriminate against certain sorts of legitimate customers, and we do that generally throughout the economy, and there’s nothing wrong with that.
Alan Moran:
We have to ensure that we’ve stopped any planning, reverse planning decisions, which have made it very difficult to actually get stuff off the ground. I mentioned Adani had taken 10 years getting off the ground. Others are taking just as long. The gas developments in Queensland and Northern New South Wales are taking an awful long time. Because we have planning courts, which have been staffed by activists, and they hear advice from other activists who say, “If we develop more coal here, then it’ll add to global pollution of carbon dioxide. So, you’ve got to stop it,” and all that. That eventually gets quashed, but it all takes a long time to work its way through the courts. So, we have to stop doing that. We need political leadership above all. We need men and women who understand the politics, who understand the economics of this to start coming forward and saying, “This is just crazy. This is just crazy. We can’t do this. This is being caused by these actions. We’ve got to stop doing it.” And we need to actually reduce any other legislative barriers. We’ve mentioned nuclear.
Alan Moran:
I mean, I’m not sure how remunerative nuclear would be in Australia. Probably not very much at the moment. But we certainly ought to stop people from preventing nuclear developments. It’s just about the safest source of power. It’s been demonised by various adverse effects in Ukraine and difficulties that it sometimes does. But if you look at numbers of fatalities per units of energy, it’s massively less than coal, even, certainly less than hydroelectricity, all of which have faced disasters from time to time. So, these are the measures we’ve got to do to get back on track. We’ve got to actually get rid of all the regulations and encourage the most cheapest form and most reliable forms of electricity rather than discourage them.
Malcolm Roberts:
Well, that’s a very comprehensive list. So, let me just go through them. What you’re basically saying is to start telling the truth, politicians start telling the truth. Stop policies that are pushing towards UN 2050 net zero, and put policies in place for our Australian nation. Stop subsidising solar and wind. Stop market distortions, and, for example, capacity markets. Stop the bureaucratic interference that has destroyed the national electricity market. Stop subsidising solar and wind. Stop subsidising electric vehicles. Ban discrimination of finance on political grounds. Reverse planning decisions that are impeding projects. What you’re really saying is get government the hell out of industry, decrease legislative burden, and remove regulations, restore our sovereignty, economic sovereignty, and find political leadership.
Malcolm Roberts:
And, Dr. Moran, that’s a wonderful list. I was very keen. I am sincere in saying, let’s have you back for a debate on privatisation, and I can see the benefits. But I would like to thank you very much for coming on today, being so frank and forthright, sharing your knowledge, sharing your experience with government. You know the evils of government. You know the need for some sensible regulation. We’ve got about 20 seconds. Is there anything you would like to say in terms of how people can contact you, or your books?
Alan Moran:
Well, my website is Regulation Economics. I’ve got a lot of material on there on-
Malcolm Roberts:
Regulationeconomics.com. Is it regulationeconomics.-
Alan Moran:
.com, yeah.
Malcolm Roberts:
Thank you very much, Alan.
