Sign up for a daily newsletter defining what matters in business and markets

Stories

Q&A with Australian energy official: Climate, U.S. frenemy and more

During a recent trip to Australia, I caught up with Matt Canavan, whose position in the Australian government is most similar to that of our Interior Secretary.

Why it matters: As Australia’s minister for resources, Canavan is responsible for this nation’s rich natural resources, including coal but also wind and solar, which are growing rapidly. When we spoke, he had just finished trips in Queensland and other parts of the country facing extreme weather, some of which scientists say is growing more extreme due to rising global temperatures.

Here are edited excerpts of our interview.

On whether he agrees with the science that says Australia is already and will continue to face more extreme weather due to warmer global temperatures.

  • Canavan: "I certainly think I accept the science being described by the IPCC [United Nation’s Intergovernmental Panel on Climate Change], and yes as part of their latest report, they do talk about potentially [increasing] in bushfire risk. That is something we should prepare for, something we can manage. My main beef is that the government is not managing that risk very well; they’re doing less land clearing. … Linking every weather event to climate change is just not good science. In fact, if you read the IPCC report, there’s no evidence climate change is contributing to an increase in rainfall or cyclonic [hurricane] events in Australia.”
  • Reality check: Per Axios’ science editor Andrew Freedman, he’s right about cyclones in Australia, but leaving out important context on rainfall, including that the IPCC also says precipitation extremes are already increasing in frequency and severity around the world.

On Australia’s relationship with America. Australia is the world’s top exporter of liquified natural gas (LNG) and coal. Meanwhile, the U.S. is looking to export more coal as its domestic market wanes and it’s set to take the top spot with LNG exports in a years.

  • Canavan: "I’ve met with U.S. government officials a number of times. We have a shared interest in seeing the adoption and promotion of cleaner fossil fuels in the Asia Pacific region. … I also always say we’re a competitor with the United States in the gas market, and increasingly coal, too."
  • Reality check: America is unlikely to overtake Australia on coal, but in a few years, Australia will be in solid third place on LNG exports behind both U.S. and Qatar, per a Credit Suisse analyst quoted in this Reuters article.

On Australia’s potential to be a wind and solar superpower, given its vast swaths of sunny, open lands.

  • Canavan: "Let’s just keep our own lights on first. … Our energy system needs significant reform and investment, particularly non-renewable and non-intermittent. That’s why the government is prioritizing reliable power and coal-fired power. We are struggling with around 20% renewable energy in the market, higher in some regions, which is making it very difficult to keep the lights on in South Australia. "
  • Reality check: Australia is facing high electricity prices and reliable issues, as Canavan noted, and increased renewable energy is one of several factors for that, experts say. Lack of reliable and redundant transmission networks facing more extreme weather is another, along with a lack of coherent government energy and electricity policy, which is styming investments in the sector.

Go deeper: