Guest essay by Eric Worrall
h/t JoNova – News has emerged that a high level delegation from Pennsylvania quietly visited Australia this month, offering hard pressed Aussie businesses relocation packages and asylum from Australia’s insane green energy policies.
US state of Pennsylvania spruiks power to entice Aussie firms
The state of Pennsylvania has sought to poach Australian companies with a promise of “abundant’’ energy, sparking renewed warnings from Australian business leaders that the nation risks losing jobs to offshore rivals unless it tackles its energy problems. A high-powered delegation from the Pennsylvanian government, headed by Dennis Davin, the state’s Secretary for Community and Economic Development, visited Australia seeking out large and medium Australian businesses and plugging his state’s energy advantages.
The week-long trip early this month, with stops in Sydney, Melbourne and Perth,…
The Pennsylvanian delegation has fanned fears that Australian firms are considered “ripe for targeting’’ by offshore rivals with offers of low-cost, reliable power.
Unfortunately the article in The Australian is paywalled, but the Minerals Council of Australia confirms the visit.
HIGH AUSTRALIAN POWER PRICES THREATEN JOBS, HURT GLOBAL COMPETITIVENESS
DEC 29 2017 DAVID BYERS, INTERIM CHIEF EXECUTIVE
Revelations in The Australian today that the US state of Pennsylvania has sought to poach Australian companies with a promise of “abundant’’ energy show that power price rises here are hurting the international competitiveness of Australian businesses.
It’s little wonder that overseas countries are trying to entice Australian manufacturers to relocate by promising low-cost, reliable energy.
Over the past decade, Australia has moved from having some of the lowest to some of the highest energy prices in the developed world.
Goldman Sachs also recently noted that wholesale electricity prices are expected to increase by another 20-30% in the medium term.
Australia has already dropped from 10th to 21st on the Global Competitiveness Index.
Unless serious efforts are made to reduce Australia’s energy costs, we should expect more global attempts to persuade our businesses to relocate, which will be bad news for economic growth and jobs.
JoNova points out that while gas is likely a lot cheaper in the USA, the price of electricity is not that different in Pennsylvania compared to Australia
This is likely to change.
Given planned closures of old coal plants, an utterly toxic investment environment for anything resembling dispatchable energy, and the track record of energy prices to date (see the top of the page), it is a fair bet Aussie power price rises will continue.
Or worse, heavy industry consumers might be repeatedly forced without notice to switch off their plant and equipment to help maintain the air-conditioned comfort of the urban greens who voted for this mess.
Even if renewables do work out in the end, which I doubt, somebody will have to pay for the switch, the replacement of existing infrastructure with expensive new renewable installations. It will be far easier to push the construction costs onto industry than spike voters with even more politically unpopular electricity price rises.
I doubt the Pennsylvania delegation to Australia was the only such delegation. Throughout the world countries with affordable energy policies are quietly hoovering up expertise and capital from high cost countries. The Europeans even have a name for this relocation of economic activity to lower cost countries, they call it carbon leakage. The winners of this quiet game of corporate migration and jobs growth will be countries which place affordability ahead of politics.
As an Australian I’ll be sorry to see the money, economic activity and jobs provided by heavy industry leave our shores – but I can’t blame business people for choosing survival over the train wreck which our politicians are busy creating out of the Australian economy.