Hydrogen’s potential as a high-density, low-emissions fuel for energy production is real, but there is a long way to go before it contributes to the emissions reduction target that Labor has – either aspirationally or unachievably, depending on your politics – set for this nation.Perversely, Labor’s decision to cap the price of coal and gas will undermine the investment environment needed for hydrogen energy generation to become a viable commercial alternative.
In it, former chief scientist Alan Finkel observed that Australian companies and investors were “ready to apply their ingenuity and considerable experience to activating the supply of hydrogen”. The difficulty, he observed, was the need for it to reach a point where it was competitively priced. Last election, Labor promised at least $1.14 billion for hydrogen projects. But Labor’s cash splash is an utter waste if it does not create a climate in which there is confidence for private enterprise to invest.
It should disturb Australians that the chief executives of BHP, Santos, Cooper Energy, ConocoPhillips and others have had to publicly express their concern forSantos CEO Kevin Gallagher explained the effect of this form of nationalisation as meaning Australia would need the kind of precautions for investment that need to be applied in jurisdictions such as Venezuela, Nigeria or Argentina.
But by taking away the promise of being able to earn a market-based profit, in the long term, Australian consumers will pay much higher prices, and for longer.