As criticism of the government’s energy market intervention settles, Madeleine King is focused on pushing Australian resources to the fore of the global energy transition.
It's hard to miss the significance of Madeleine King having been named as resources minister.
That the last Western Australian to hold the job was Gary Gray, who served in the job for just six months before Labor was booted from office in 2013, would not be lost on Ms King, who succeeded Mr Gray in the seat of Brand at the 2016 poll.
Neither is Ms King unaware that she’s the first woman to hold the resources portfolio.
Demographically speaking, choosing a woman to oversee resources at a time when significant attention is being paid to women’s safety in the mining industry is a smart move.
Ms King conceded as much when she sat down with Business News earlier this month.
“The industry as a whole is seen as pretty blokey, there’s no doubt about that, but when I go out on site I still have to wear the same stuff as everyone else,” Ms King said.
Unlike some of her recent predecessors in the role, Ms King doesn’t see herself as playing the part of cheerleader for the resources sector.
In her view, the job is to ensure it prospers while also meeting community expectations.
Included in that is guaranteeing women are visible and outspoken when it comes to coverage of sexual assaults on worksites, which Ms King frames as morally unacceptable and a hinderance to workplace retention at a time of widespread labour shortages.
As for the politics of it, selecting a Western Australian for the role makes sense.
After all, Labor would not have formed majority government if not for WA swinging so heavily behind the party last year, following numerous federal elections at which the state delivered a majority of the two-party preferred vote to the Coalition.
Moreover, the job of resources minister under the Morrison government was heavily tilted towards MPs from the east coast.
That included two drawn Queensland and another from regional NSW, both states where coal mining dominates the resources sector.
Given the role of iron ore as the sector’s barometer in Ms King’s home state of WA, therefore, and it’s no surprise coal is not among her major talking points.
“I know often in the past some groups have said to me there’s been a heavy focus on the coal part of the resources portfolio,” Ms King said.
“Coal is really important to the export industry of this country, but if you’re a minister that focuses always on coal then you forget iron ore, which is our biggest export, gas, which at any time is our second or third biggest export, critical minerals, as well as gold and other traditional minerals.
“I seek to represent the whole of the portfolio and not just the controversial bits.”
None of which is to say she’s afraid to put her neck out for industry on hard issues.
Indeed, prior to last year’s energy market intervention – where the government placed respective price caps of $12 per gigajoule and $125 per tonne on wholesale gas and coal – Ms King had cultivated a role for herself as a proponent of industry, including through her vocal support for Woodside Energy’s $16.5 billion Scarborough LNG project.
She’s also been a prominent backer of contentious decarbonisation efforts, having gone on record to defend Chevron’s use of carbon capture at its Gorgon gas project, despite it having fallen dramatically short of state government-mandated targets.
That said, Ms King has shown herself unafraid to whack industry over its escalating complaints about the government’s forays into price controls.
It’s a matter of public record that she telegraphed as early as August last year, when the Australian Competition and Consumer Commission came out in support of measures that would shore-up energy security, the government may opt to put downward pressure on prices.
Those hints continued in November, when Ms King used an appearance on Sky News to imply the existing domestic gas security mechanism, enacted by the Turnbull government, was insufficient to handle escalating wholesale prices.
Ms King had previously sought of a heads of agreement between gas producers on the east coast to stave off price increases.
That agreement, signed in late September 2022, outlined rules that would divert uncontracted gas into the domestic market and require producers to adhere to a principle that domestic customers pay no more than international counterparts.
And yet the government’s decision to enact a 12-month price cap, which was soon followed by a pledge to enact an ongoing ‘reasonable price provision’, proved a publicity nightmare.
The Australian Petroleum Production and Exploration Association took the lead in slamming those efforts, variously claiming in the weeks after that future investment was at risk and claiming Senex Energy’s decision in December to pause expansion of the $1 billion domestic gas supply expansion as proof.
That’s despite the fact Senex has not withdrawn its application for environmental approvals, suggesting it remains committed to the project.
Others have fired similarly critical salvos, with Woodside boss Meg O'Neill warning the intervention would threaten future supply and Santos chief Kevin Gallagher making the incendiary accusation the government’s actions constituted “Soviet style” market interference.
“Kevin’s got a way with words,” Ms King said.
Worth noting is that Santos’s latest half-yearly report boasted of an underlying profit of $US1.27 billion, up 300 per cent on the prior comparable period. Woodside’s underlying net profit after tax was a similarly imposing at $US1.82 billion, up 414 per cent.
Of course, the private sector rarely speaks with one voice.
Given the outcomes for business (and their views on the price intervention) depend at what stage of the pipeline they sit, it’s no surprise there is a variety of views.
Among the most obvious beneficiaries of a price ceiling are manufacturers, with Ai Group boss Innes Willox declaring his support for the government’s moves despite noting flaws in its approach.
Some might even be thankful Australia didn’t follow the UK, where a Conservative government has enacted a 35 per cent energy profits levy to last until at least 2028.
Implementing a windfall super profits tax of this sort was not the preferred position of Ms King, who described that solution as creating bigger problems in the longer term, and she was evidently mindful price caps weren’t “the perfect solution”.
In her telling, though, they were quickest and most effective solution available.
“I understand the industry went through a tough time during [the pandemic] and prices were low. Sometimes people forget that. I don’t forget that,” Ms King said.
“I suppose in some way, as they see it, this is a recovery.
“On the other hand, how does any member of Parliament … explain to a business that’s going to go out of business because it can’t get contracts, or a consumer that’s facing 50 per cent price increases, how Shell can [then] get a $40 billion profit?
“That’s simplifying the whole argument, I get that, but in people’s minds [they would ask], ‘How can that be right?’”
Much of this is a distant concern to WA.
Gas users in this state have in recent months benefited from a domestic reservation policy, with spot prices in the three months to September sitting at just $5.66 per gigajoule compared to $25.97/GJ on the east coast, per EnergyQuest reporting.
That’s led the likes of NSW Treasurer Matt Kean to call on the federal government to enact a similar policy that would supersede WA’s existing supply arrangements.
Anxieties over supply aren’t lost on Ms King.
Indeed, while the Greens have in recent weeks signalled opposition to the government’s refreshed safeguard mechanism on the basis it would likely ensure the ongoing viability of coal and gas projects, Ms King insists the extraction and use of gas remains wholly consistent with achieving net zero emissions by 2050.
Some caveats do apply to her position.
Ms King concedes that, in residential contexts, gas use is likely to recede in coming decades as households and transport are increasingly electrified.
To get to there, though, she notes mineral processing and the manufacture of wind turbines and batteries is likely to require gas beyond even 2050.
Hydrogen could be a useful substitute in these situations; however, it remains years away from forming any significant part in the country’s net zero ambitions.
“Gas will just simply have to be a part of that. There’s no alternative,” Ms King said.
There is, of course, a social dimension to this debate.
Athletes have become some of the most public critics of fossil fuels, with Pat Cummins sticking his neck out in October to criticise Alinta Energy’s sponsorship of Cricket Australia.
These views are increasingly being driven by supporters, with Greens MLC Brad Pettitt issuing a joint statement at the Fremantle Dockers’ latest AGM in which he asked administrators to “do the right thing by members” and remove Woodside as a sponsor.
In case that be seen as the musings of a noisy, left-wing agitator, former Labor premier Carmen Lawrence has similarly called for Fremantle to sever its ties to Woodside.
Ms King is careful not to accuse those who do object of being woke.
She is, however, a Fremantle supporter, and takes a markedly different view than some other policymakers.
“I’m a Dockers supporter and I have no objection to Woodside sponsoring them,” Ms King said.
“I know the work Woodside do with Fremantle, with outreach to Indigenous and rural communities. I think that’s really, vitally important.
“I think the community and especially activists sometimes say, ‘These companies should be paying more and contributing more’. Well, here they are, contributing quite a lot to a sport we love, and you want to stop them? That’s pretty hypocritical, too.”
Her view that governments, businesses and athletes support achieving net zero emissions by 2050 is generally accurate, with most public discussion since last year’s election having tended towards how to best achieve that goal.
Some, including the opposition, have leaned on the possibility of nuclear energy as a solution.
Peter Dutton, Angus Taylor and Ted O'Brien are among the most prominent supporters of investing in small modular reactor technology. That’s despite cost problems, highlighted by the CSIRO in its FY22 GenCost report, associated with highly speculative technology and a lack of relevant infrastructure or institutional support.
No doubt there are opportunities to expand uranium mining. Australia is thought to have one of the world’s largest deposits of the material, which could have significant potential for domestic use and export markets.
That’s especially true of WA, which is thought to have known deposits of at least 200,000 tonnes of uranium.
Perhaps it’s no secret that Ms King scoffs at the idea of pursuing nuclear energy, though.
Labor has maintained a historical opposition to it, with the federal government’s distaste for it aired in public when Prime Minister Anthony Albanese tersely reprimanded his South Australian counterpart Peter Malinauskas for openly discussing the viability of nuclear energy last December.
Ms King takes the view that, between existing gas and coal reserves and the opportunities in pursuing renewable energies, fostering a domestic nuclear industry is pointless.
She’s also not thrilled with what she sees as rank hypocrisy from some of its proponents.
“It’s unfair for parliamentarians living on the Gold Coast to start talking about nuclear modular reactors when they certainly don’t want to put them on the Goldie. They would rather put them in industrial areas like Port Kembla or Kwinana,” she said.
“It’s all a bit vacuous, to be honest, and a waste of time.”
In keeping with the political and economic mainstream thinking on the energy transition, Ms King’s attention is firmly fixed on expanding exploration and mining of critical minerals.
Government-backed finance has been willing in this area, with ASX-listed Hastings Technology having been loaned $220 million from the Northern Australia Infrastructure Facility to support the rare earths outfit’s Yangibana project in the Gascoyne.
As for signals of the government’s approach, Treasurer Jim Chalmers outlined as much in his recent cover essay for The Monthly, in which he described co-investment as a “powerful tool”, specifically citing The Clean Energy Finance Corporation as a model to emulate in other industries.
Ms King partially echoed those views, citing foreign investment as necessary in the sector’s infancy. That mirrors suggestions outlined in the federal government’s critical minerals strategy, which is being developed following the end of consultation earlier this month.
It’s likely a coincidence that WA, as the biggest lithium producer in the world, would stand to benefit from such a strategy.
No matter. As Ms King points out that, Australia simply cannot afford to be asleep at the wheel as foreign governments and businesses rush to invest in battery minerals.
“We do need a good strategy about how we manage that and that’s what we’re working on right now,” she said.
