As my mates and I finally got our licences towards the end of the 1970s there seemed to be an unwritten rule for all teenagers: you could drive Mum’s car but not Dad’s.

In the shadow of the 1973 oil shock, the mums’ cars had one thing in common: They were tiny. Because getting a licence is such a seminal moment in any teenage life, the brands are seared into my memory: the Datsun 120Y, the Toyota Corollas and my mum’s car, the Holden Gemini.

But all the dads’ cars were still big and, in those days, most fell into one of two tribes: Holden or Ford. This disposition was genetic and every year sons and fathers geared up for the annual title fight between the rival camps that played out on the racetrack at Bathurst.

My dad was a Holden man and I got to drive the Statesman just once. When I arrived, beaming with pride, to pick up my mate Damien from his place, his father shook his head and said my dad must have rocks in his head. I think that was because Damien’s dad was a Ford man.

Markets and people did change their behaviour after the first big oil shock, but they also hedged. Small cars became fashionable, but big cars did not disappear. People adapted around their needs.

It was during this era that oil’s share of the world’s primary energy system peaked. It has drifted lower since, but the surface story is deceptive because the total volume of oil consumed kept rising as the world grew richer and industrialisation spread.

In 2024 humanity burned more coal, oil and gas than in any single year in history, despite all the talk of record growth in renewable energy. Both statements are true and together they point to a deeper reality. There is no simple transition from one energy system to another. There is an energy addition. New energy sources do not necessarily replace old ones. More often they are layered on top as societies consume ever more power.

The pattern was identified in the 19th century by English economist William Stanley Jevons in what became known as the Jevons Paradox. He observed that as steam engines became more efficient, Britain did not burn less coal. It burned far more. Efficiency lowered costs, expanded capability and unleashed greater consumption. That pattern has repeated ever since.

More efficient little cars did not consign the big ones to history. More efficient computers increased electricity use. LED lighting cut the cost of illumination and we responded by festooning the world with pretty lights.

Human beings rarely use efficiency to consume less energy. More often we use it to do more.

This energy shock will drive a move away from oil dependence and ensure every government tries to secure more of it within their own borders.

There has been a spike in electric vehicle sales here, which is a good thing and will probably endure. But how many of those sales are for a second car?

The geography of our island continent, the way our systems are built and the slow turnover in our car fleet mean it will be a very long time before EVs dominate the private vehicle market. The next step, electrifying all road transport, mining and agriculture, remains a distant dream.

The other feature of this crisis is to highlight what might be called the hangman’s noose theory of politics: the imminent threat of execution does tend to clarify the mind and prompt deathbed conversions. Our leaders have finally recognised that this nation runs on liquid fuel, that energy security is national security and that their job security depends on securing hydrocarbons.

It is too early to declare that the era of fossil fuel hysteria in our leadership caste is over, but it may have peaked. The man who once declared fossil fuels had no place in our future is now on the diesel diplomacy circuit, breathing a sigh of relief each time a supertanker full of fuel heaves into view. The leaders of the march to poverty are quiet­ly retreating.

I have never held Climate Change and Energy Minister Chris Bowen or the Albanese government solely responsible for Australia’s deep exposure to this fuel crisis. That failure has been decades in the making. Several generations of politicians of all hues hollowed out our resilience and the incumbents’ demonisation of hydrocarbons just drove the nails deeper into the coffin.

The measures the government has announced to secure and store more fuel, and the modest proposal to examine expanding refining capacity, are welcome first steps. The aim should be to become as energy self-sufficient as possible and Australia has the resources to do it. That will be expensive and take time, but weigh it against any future crisis.

Gas is on the march from sea to shining sea and even Victoria, whose government turned its crusade against all fossil fuel into a long morality play, has been mugged by reality.

Victoria’s multi-titled Energy Minister, Lily D’Ambrosio, likes to refer to the fuel essential to her state’s survival as “fossil gas”. On her watch Victoria made it all but impossible to tap that resource even as its reserves declined and the state drifted towards energy bankruptcy. Victoria entrenched a permanent ban on fracking and coal-seam gas extraction in its constitution and imposed a moratorium on conventional onshore gas exploration.

When gas prices spiked after Russia’s invasion of Ukraine, in an act of supernatural hypocrisy Victoria whined that it should be entitled to Queensland’s coal-seam gas. It then wanted all Australian taxpayers to underwrite the absurdity of building a liquefied natural gas import terminal in a state sitting above untapped gas reserves. Now Victoria is in the middle of an awkward script rewrite.

This week the Allan government approved Amplitude Energy’s Annie project in the offshore Otway Basin that is expected to begin delivering gas by 2028. The Victorian budget also borrowed more money to secure 10 million litres of diesel.

So the winds of change are blowing, they will likely blow in all directions at once and right now we are in the eye of the storm. If the Strait of Hormuz does not return to something approaching normal service soon, this crisis is far from over. Australia has been insulated by its wealth, but money cannot paper over physical supply short­ages forever. We have outbid poorer countries for fuel. We cannot see and do not care about their suffering. But in time the pain will work its way up the food chain.

And amid all this, one of the clearest signals about where the energy story may be heading came from an unlikely place: Formula One president Mohammed Ben Sulayem is on a quest to bring back V8 engines by 2031. The former rally driver has been pushing at this door for some time and, after mounting complaints about the sport’s latest hybrid rules, it may be starting to open.

F1 is the world’s most technologically advanced motorsport, a rolling laboratory where elite engineers push the limits of machine performance. For the past 15 years it has pursued ever more sophisticated hybrid technology, turning its cars into astonishingly efficient but increasingly heavy, expensive and complicated energy management systems.

Many drivers and fans loathe the latest cars. Gone is the raw mechanical violence of the old V10s and V8s, the screaming engines driven flat out on instinct and nerve. The new hybrids draw roughly half their power from batteries, making them fast but bloodless and difficult to handle.

Like everything in energy, there are trade-offs.

The problem at the heart of the new 2026 rules is that drivers are forced to constantly harvest energy under braking and carefully manage how their car’s power is used. Drive reports that, on tracks with fewer heavy braking zones, drivers “are required to do what’s known as “superclipping”, which means instead of using the engine to drive the wheels, they use it to charge the battery, running it as a kind of electrical generator”.

Instead of the machine serving the driver, the driver increasingly serves the machine. The car is no longer built simply to be as fast as possible. It must constantly manage its own energy anxieties, divert­ing power away from performance to sustain the system itself.

Then there is the cost. Before the hybrid era, engine deals reportedly cost teams between $4m and $7m a season. Today’s turbo hybrid power units run to more than $20m, while manufacturers are estimated to have spent more than $1.4bn developing competitive hybrid engines.

F1 has stumbled into the same dilemma confronting much of the wider energy transition. As systems become more complex, more capital, engineering and effort go into managing energy, storing it, shifting it and stabilising it, rather than simply producing abundant, reliable power.

Producing affordable, reliable energy using all our natural resources should be the goal of any sensible government. Without it we will go broke. We should reduce emissions where we can, as fast as we sensibly can, within the limits imposed by physics, engineering and economics, not driven by slogans such as net zero.

As we are learning, physical systems do not bend to ideology.

This article was first published in The Australian.

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It was another rhetorical flourish full of the passionate intensity only a mind untroubled by doubt can muster.

At a press conference in Parliament House on April 13, Climate Change and Energy Minister Chris Bowen was asked whether the global fuel shock from the Third Gulf War might reshape talks at this year’s United Nations climate jamboree, where he has been gifted a newly minted role as head of negotiations.

“In all my discussions with my international colleagues, energy and climate, there isn’t one country in the world that said, ‘You know what this fuel crisis reminds us, is we need more fossil fuels’, “ Bowen declared. “That conversation is not being had anywhere around the world. In fact, countries around the world are saying this underpins and underlines the need to keep going with things like electrification and ensuring renewable energy is an important part of the mix going forward.”

Here let’s cede this space for a moment to include some thoughts from Katherina Reiche, Germany’s Minister for Economic Affairs and Energy, published on April 7 in her country’s newspaper of record, Frankfurter Allgemeine.

“We are experiencing one of the most severe energy crises in history,” Reiche writes. “Since the start of the Iran war and the closure of the Strait of Hormuz, prices for oil, liquefied gas and diesel have surged to painful levels. This is placing a burden on consumers and businesses alike and is costing us economic growth that Germany urgently needs. Many are therefore calling for an immediate exit from oil and gas. The argument is that we simply need to expand wind and solar energy more quickly — and the problem would be solved.

“Well, it is not that simple.

“Let us look at the facts: Germany has a total energy demand of 2,900 terawatt hours for electricity, heating, transport and industrial processes. Just under one sixth of this is electricity, and more than half of that comes from renewable energy. However, the share of renewables in total energy consumption in 2025 was only just under one fifth. For years, we have comforted ourselves with ambitious targets. Eighty per cent of electricity from renewables by 2030, climate neutrality by 2045 — fine figures that soothe our conscience. But while we clung to these targets, electricity prices exploded. German households pay up to 37 cents per kilowatt hour — more than nine cents above the EU average. Our industry is bleeding. Deindustrialisation is accelerating.

“Yes, wind and sun do not send a bill. But the overall system certainly does: [environmental levies], capacity reserves, grid reserves, redispatch costs, grid subsidies, subsidies to lower energy prices — all of this adds up to system costs of more than €36 billion per year. That is €430 for every German citizen.

“We pay almost €3 billion alone for curtailing wind turbines and solar plants because the grid cannot absorb their electricity. There is no other industry that receives guaranteed financing for more than 20 years and is even compensated when its product is not needed. This cannot continue.

“One fact has been suppressed for too long: an energy transition that ignores system costs will ruin the country it claims to save.”

Well, amen to all that.

Recall that Germany has long been the energy transition poster child, going hard and early on wind and solar. Bowen must have missed the memo, but Berlin began searching for more fossil fuel before the third Gulf war flared and the current crisis has quickened that quest. Reiche has reopened debate on domestic gas exploration, while Chancellor Friedrich Merz concedes coal‑fired power stations may have to stay on the grid for longer than planned.

Cast your eye beyond Germany and it quickly becomes clear Berlin is no outlier. Once you bother to look past governments’ words to their deeds, you see that energy security elbowed its way ahead of emissions cuts in many countries’ hierarchy of needs after the Ukraine war caused a global spike in gas prices.

The hunt is on for more hydrocarbons.

The International Energy Agency says global coal demand rose to a new record high in 2025, with China leading the charge. The agency likes to headline that Beijing is building more wind and solar than any country in history, which is true, but China is also pouring concrete for more new coal plants than the rest of the world combined.

Detailed plant‑by‑plant tracking by the Centre for Research on Energy and Clean Air and the Global Energy Monitor database shows that China commissioned over 50 new coal‑fired power stations in 2025, the largest wave of completions in a decade. Those researchers expect a similar number of new plants to be completed this year and next as a surge of approvals works its way through construction.

China now burns about 56 per cent of the world’s coal but power is only part of the story. Nearly 400 million tonnes a year goes as feedstock for coal‑to‑liquids and coal‑chemicals plants that make synthetic diesel, gasoline and petrochemicals. China is also stepping up conventional oil and gas exploration at home and abroad. Chinese capital is powering a coal boom in Indonesia, with more than 40 off‑grid coal plants running nickel mining and smelting operations that feed its electric‑vehicle and battery supply chains.

Vietnam has just commissioned the Vung Ang II ultra‑supercritical coal plant, one of six being built under the country’s official power plan. India is opening new coal mines and targeting more than a billion tonnes of annual production by the end of the decade, to feed new blast furnaces and power plants. The Philippines, Japan and South Korea have all added new coal capacity since 2020, even as their governments talk up phase‑down goals.

Oil is central to every nation’s energy security and the scramble for new fields and more production is on worldwide. In the United States, the world’s largest oil producer, Donald Trump is urging companies to boost supply in response to the fuel crisis he spawned, and his Department of the Interior is rolling out an expansive new schedule of auctions for the right to drill for oil and gas in federal waters, which is badged as essential “to promote U.S. energy security and affordability”.

No one better embodies the art of walking both sides of the street than Canada’s Prime Minister Mark Carney, who talks up climate leadership while ramping up oil and gas exports. In November Carney signed a memorandum of understanding with Alberta’s premier to build a pipeline to the Pacific Coast, aiming to expand the nation’s oil exports beyond the U.S. market. He has also fast‑tracked the Ksi Lisims LNG export terminal, with an eye on Asian gas markets.

After his recent visit to Australia Carney went to Japan where he pledged that:

“Canada is in a position where we can double our LNG exports by the end of this decade, and double again by the end of the following decade.”

This should send a loud message to Canberra. Ottawa wants to lock up the same gas markets we depend on; if we do not supply them, it will.

In South America, Argentina is aiming to produce one million barrels of oil a day by 2027 by fracking its giant Vaca Muerta shale field. If it hits its targets it will make Argentina a net exporter of oil and gas, with the potential to generate A$35–37 billion a year, as much as it makes from agricultural exports. Brazil is aggressively expanding its oil exploration, even in the environmentally sensitive Amazon River mouth. State‑run Petrobras started drilling just before Brazil played host to last year’s UN climate summit.

Riding the wave of soaring oil prices, Russia is cashing in by stepping up production. The world’s third‑largest oil producer is now pumping a little over 10 million barrels a day, and there is no shortage of buyers, collectively pouring hundreds of millions of euros a day into its coffers.

Across Africa, tens of billions of dollars are flowing into new oil and gas projects, with several dozen large gas and LNG developments in countries such as Mozambique, Nigeria, Senegal and Mauritania already under construction or close to final approval.

Even the polar regions are in play. In the Arctic, Russia and China are expanding LNG projects, ports and shipping routes aimed at tapping offshore oil and gas and getting it to Asian markets, while analysts see their growing web of Antarctic research bases as positioning for future resource claims. Now throw in critical minerals and consider Trump’s deep interest in Greenland through the same lens.

This is an incomplete global survey but it does tend to suggest that Bowen’s assessment of where the world’s compass is pointing in the hunt for fuel security is, well, a tad wayward. Alas, his analysis doesn’t even pass muster at home, where there is bipartisan enthusiasm for hydrocarbon projects.

Premier Chris Minns has declared the NSW Government would open new areas for gas exploration in the state for the first time in more than a decade, “taking decisive steps to secure the State’s energy supply for households and businesses”. As an incentive for prospectors the government has slashed the gas exploration licence application fee from $50,000 to $1,000.

In Queensland the Crisafulli Government has already extended the life of coal‑fired power plants and now wants to unlock “the development of Australia’s first oil field in 50 years at the Taroom Trough, to bolster the nation’s long‑term fuel security.”

South Australia’s Peter Malinauskas knows the limits of a wind and solar‑dependent grid better than most. In February he announced a new Strategic Gas Reserve, in a “unique and unprecedented” deal under which Santos will supply enough gas each year from 2030 to power a city the size of Adelaide, locked in for a decade.

In the Northern Territory, Chief Minister Lia Finocchiaro has championed the Beetaloo Basin as helping secure Australia’s energy future. Beetaloo Energy has just raised $66.3 million to fast‑track a pilot project, aiming for first gas sales by late 2026 and positioning the region as a new source of domestic and export supply.

Western Australia is the most gas‑dependent economy in Australia, so it is hardly surprising that Premier Roger Cook led the charge to ensure the Commonwealth did not impose a 25 per cent tax on gas exports, warning it would hurt the state and scare off the investment that keeps its lights, and mines, running.

The Prime Minister chose WA to put a stake through the heart of the push for a gas tax. But it wasn’t done at the premier’s behest. Anthony Albanese has been engaged in shuttle diplomacy around the region bartering for liquid fuel with Australia’s hydrocarbon chips of gas and coal. He knows Australia wouldn’t have a gas industry if it had not been financed by those nations and they would have told him that their energy security depends on our reliability on price and supply.

This message has been underscored by Foreign Minister Penny Wong. She embarked on her own flying fuel mission which included having to go cap in hand to China to try and get it to meet the commercial obligations to this nation that it abandoned when the first shots were fired in Iran. To all but a privileged few Beijing shut down fuel exports to preference its own supply. Surely, this must make any foreign minister ponder her nation’s long‑term security on the flight home.

Japan’s Prime Minister has just visited Canberra. Sanae Takaichi signed a joint statement on energy security with Anthony Albanese that makes clear she means hydrocarbons and wanted a written guarantee pushing back against the imposition of surprise taxes.

“We reaffirm our commitment to strengthen energy security; support the flow of essential energy goods, including liquefied natural gas, coal and liquid fuels between our two countries; and maintain stable and transparent engagement on the trade of energy products, while enhancing predictability and transparency regarding the investment environment.”

Transition talk was relegated to the next paragraph.

“We also confirm our commitment to diversify energy sources, including through supporting the energy transition and investment and cooperation in energy efficiency.”

Resources Minister Madeleine King was another strong voice in Cabinet urging caution on a gas tax. The West Australian is one of the few in Labor’s ranks who understands energy and holding your nerve in this unhinged era of energy myopia takes courage.

In 2022, when King made the routine announcement of 10 new oil and gas sites for offshore exploration, she said: “Gas enables greater use of renewables domestically by providing energy security. Australian [liquefied natural gas] is also a force for regional energy security and helps our trading partners meet their own decarbonisation goals.”

An aghast journalist wrote that this boilerplate statement of the bleeding obvious sent “a shudder through the sprawling ecosystem of climate activists and scientists in Australia”.

This vast ecosystem of richly funded, self‑aggrandising, moralising fanatics is responsible for stuffing Australia’s energy choices into the iron maiden of wind, solar and batteries and pretty much nothing else. This is the instrument of self‑harm Germany is now desperate to escape.

The same ideologues are behind the push for a gas tax. It should be clear, even to a casual observer, that they see this as the pathway to shutting the industry down.

But others should know better. Commonwealth Bank Chief Executive Matt Comyn has joined the ranks of those calling for a gas tax of between 15 and 25 per cent. It would have been better if he apologised for his company’s role in manufacturing our current energy crisis.

The Commonwealth has made a big deal about its goal of ending finance for coal, oil and gas and been as good as its word. The bank’s loans to fossil fuels decreased by 92 per cent from 2018 to 2022, from $4 billion to $267 million. This performative display of morality has done real harm to this nation.

As a rule of thumb this column is opposed to the federal government extracting another dollar from anyone because it will just get thrown on the giant money bonfire. But if more tax dollars must be tapped, then the Treasurer will find his mates at the cossetted, taxpayer‑underwritten big four banks present far richer fields than coal, oil and gas.

In 2025 Commonwealth Bank cleared north of $10 billion in profit, roughly four times Woodside’s take. If there are super profits to be milked then less harm would be done by slapping a big new tax on the banks than by mugging the companies that earn export dollars, support regional security and help keep the lights on.

This article first appeared in The Australian.

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The leaves are turning in Canberra and the lights are burning late in the Treasury.

’Tis the season when budgets are conjured, part accounting, part alchemy, all a creature of the ruling regime. No budget is a dispassionate record of taxes being minted into services. It isn’t exactly all lies and jest either, more a pocket full of promises pledged and hedged, of dreams floated and burst. And, alas, the intentions are too often better than the ideas.

Every budget is a political manifesto. Part of the Treasurer’s job is to craft the lines that make it look as if your money is being spent wisely and, nowadays, to make $1 trillion worth of gross federal debt defensible. Budgets are a weapon designed to be wielded in the daily cosplay combat of politics.

But this year is different. The real world is intruding on budget abstractions, forcing a messy rewrite of long-held assumptions. A fuel shock has underscored something that Treasury boffins and almost all economists usually ignore: without energy nothing works.

What is money if not a claim on future work? Energy is the capacity to do that work. Power is the rate at which that work is done. Money is a pledge of energy that unleashes the power that creates our wealth. To this add materials and technology. You can’t build without materials, and great minds drive innovation and progress.

But all of it rests on energy. Money makes promises; energy keeps them. Unplug the machine and it dies.

Budgets talk constantly about energy policy but barely ever about its role as the physical foundation of the economy. Governments can borrow to fund a promise. The Reserve Bank can create money. But neither can create the energy or the materials needed to cash the hope cheque. When money runs too far ahead of the material world, the gap is closed by inflation, slower growth, scarcity and the call on future work we call debt.

Perhaps the only virtue of the current liquid fuel crisis is in forcing a rethink. The subtext of this budget is a government being confronted by the realisation that it lives in a material world. It has hit pause on the demonisation of fossil fuel because running out of diesel, jet fuel and petrol would lead to economic collapse. Even a significant shortage would be catastrophic. Turns out coal, oil and gas still account for 91 per cent of all the energy that runs this country each year, despite the endless procession of headlines proclaiming an energy transition. No government can ignore this.

This column’s only iron law of politics is: deeds matter more than words. Hard on its heels comes the rule of human affairs coined by Labor giant Jack Lang: in the race of life, always back self-interest, because you know it will be the only horse trying.

In Anthony Albanese’s race around the region trying to shore up liquid fuel supplies, he is bartering with Australia’s record as a reliable supplier of liquefied natural gas and, sotto voce, coal. Albanese understands his government’s existence depends on keeping the supply of diesel, jet fuel and petrol flowing, and knows the only cash in this trade is hydrocarbons. This tells you he has ordered his priorities around the immutable rules of politics.

There is, on cue, the cry that wind and solar will pave the way to energy independence. Sure, it will have its place. But the government is also exploring another refinery, which will not run on sunshine or the breeze. A refinery needs oil, and it makes no sense in the wake of this crisis to get that oil anywhere else but here. There is talk of more fuel storage. Yes, the winds of change are blowing, but watch the weathercock for direction.

Hopefully another realisation will slowly dawn on cabinet. It is materially impossible for wind, solar and batteries to replace everything that fossil fuels do.

It is also impossible to rapidly cut fossil fuel from the energy system that coal, oil and gas built and run.

The modern world was constructed on a moment in human history that is unique, revolutionary and unrepeatable: when the extraordinary properties of oil were discovered and harnessed. The industrial revolution began when we moved from burning wood to coal, to boil water and make the steam that turned the wheels of progress. Oil supercharged growth because it is liquid, light, portable, storable and remarkably energy dense. There is nothing else like it.

And what happened? The world became richer, faster than at any time in human history, because hydrocarbons added an invisible army of workers to our ranks. Since 1900, as hydrocarbons flooded the energy system and oil became the master fuel of modernity, world output has soared by about thirtyfold in current-dollar terms.

It transformed subsistence into surplus, short lives into long ones, and changed a world defined by limits into one that appeared, for a time, to escape them. With these fuels humanity pushed its boundaries into the skies and towards the stars.

We still measure oil in barrels, a relic of the industry’s earliest days when crude was stored and shipped in wooden casks. A single barrel of oil, of 42 gallons, about 159 litres, is equivalent to many years of human labour and the world consumes about 100 million barrels a day.

Nate Hagens, founder of the Institute for the Study of Energy and Our Future, calculates that when you combine that with coal and gas, the world uses about 100 billion barrels of oil equivalent a year, each embedded with five years of human labour.

“That’s 500 billion human labour equivalents working alongside about five billion actual human workers,” he said on his podcast. “One hundred fossil ghost workers for every living one. Every economic miracle of the last 150 years was underwritten by this invisible workforce.”

We built the machinery of our civilisation on the abundant, reliable and cheap availability of the energy trinity of coal, oil and gas. The foundations run all the way down to the molecular level of the hydrocarbons embedded in everything we use, from the polymers in plastics to the ammonia that makes synthetic fertiliser. Building up, we created vast cities, sprawling suburbs, industrial agriculture, global supply chains and mass mobility.

Now, with the closure of the Strait of Hormuz, we are offered a glimpse of how the machine really works, and where our prosperity comes from. Choke point is more apt than most realise because if you squeeze the flow of hydrocarbons, the global economy begins to gasp for breath, because energy is our atmosphere. To borrow from Hagen, most people swim in fossil energy like a fish swims in the sea and they are blind to it.

But the dependence is deeper and the danger greater than many realise because of the link between energy and economics.

This cut in supply exposes how fragile every single system we have built is. The machine we built is the foundation for the financial and political systems that govern the world. Break the base and everything falls. The longer this crisis endures the closer we come to a tectonic shift.

The world will change in dangerous and unforeseeable ways.

Energy surrounds us. It sustains us. Your lifestyle depends on it. Without it, societies suffocate. We almost never think about it. Until it is gone. And when it is gone, all the promises in the world mean nothing.

This article was first published in The Australian.

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Australia’s fuel woes now come not as single spies but in battalions. The blaze in Geelong at one of our two remaining refineries has deepened the crisis and will make our worldwide scramble to secure liquid fuel even more urgent.

Maybe this is the energy crisis we had to have because the fault lies not in our stars but in ourselves.

The Albanese government, like the rest of the world, is collateral damage in the third Gulf war but it bears its share of responsibility as one in a long line of administrations that presided over a two-decade decline in our fuel security.

We have drifted to a point where we are petrol, diesel and jet fuel mendicants, despite being one of the biggest per capita consumers of liquid fuels on Earth. We all but gave up searching for oil, surrendered our refining capacity and assumed just-in-time supply chains would endure. We were always destined to reach a moment when our luck ran out.

What matters now is whether we can develop a robust plan to secure energy sovereignty based on the fuels that actually run the nation. If not, we will remain hostage to the next shock. There will be another and it may well be worse as the pieces are already in motion.

Australia’s dependence on imported refined fuels ties our fate to the stability of increasingly contested sea lanes.

While the third Gulf war burns an indelible image of the Strait of Hormuz into the world’s consciousness, there are other physical and political choke points that should be keeping our leaders awake at night.

Beijing has returned to island building in the South China Sea for the first time since 2017. Once again, it is reshaping the map by turning a remote atoll into what could become its largest military base in the region.

The Paracel Islands are a scattered chain of low-lying reefs and islets about halfway between Vietnam and China’s southern coast. Beijing seized them during the Vietnam War.

From space, one dot on the map, Antelope Reef, resembles a polished blue agate, a ring of pale sand encircling a deep indigo core.

Satellite images taken between mid-December last year and early March show construction moving at an astonishing pace.

Dredgers carved a channel through the cay, piled up sand on the coral rim to make an artificial island, and soon jetties, a helipad and clusters of buildings appeared.

Analysis from the Asia Maritime Transparency Initiative shows 600ha already reclaimed, putting Antelope almost level with Mischief Reef, China’s largest outpost in the South China Sea. It can now support a 2700m runway, long enough for all of China’s advanced fighter jets. A similar runway on Woody Island already hosts nuclear-capable bombers.

The enlarged lagoon also could shelter a flotilla of coastguard ships and militia fishing boats trained to support military operations, giving Beijing a persistent presence in surrounding waters. It would be large enough to house missile systems and surveillance arrays and electronic warfare equipment.

About 1000km southeast lies Scarborough Shoal, a coral atoll entirely within the Philippines’ 200-nautical-mile exclusive economic zone. China has maintained de facto control there since 2012, blocking Philippine access to its inner lagoon despite a 2016 international tribunal ruling that found its claims unlawful.

China has not built an island there but it has not needed to. Control is enforced from the water, not the land.

On April 15, shipping data firm Kpler tracked 528 Chinese-flagged vessels operating across these disputed waters. Kpler says Scarborough is the most visible pressure point in the South China Sea, but its data shows a wider pattern: a layered deployment of Chinese vessels asserting control without triggering open conflict.

Those vessels are pushing ever farther south, within a few hundred kilometres of Indonesia and towards the approaches to the world’s most important shipping lane, the Strait of Malacca. This narrow channel between Malaysia and Indonesia carries about 440 commercial vessels a day. Any disruption, even short of a blockade, would tear through global energy and freight markets.

Kpler says there is no immediate threat to the Malacca Strait but the risk is steadily rising. What Beijing reveals in places such as Scarborough Shoal is a method: persistent presence, incremental pressure and the gradual normalisation of coercion at sea.

“The relevance of the Scarborough developments, and the fleet density the vessel data reveals, is less about immediate supply disruptions and more about trajectory,” Kpler notes.

“The threshold for maritime coercion appears to be shifting, gradually but consistently.

“This aligns with the broader view that the current geopolitical environment is defined less by sudden conflict and more by prolonged, structural competition between major powers. For markets the risk is not a single shock event but a steady accumulation of frictions that make critical arteries like Malacca feel less unquestionably secure over time.

“For now, flows through Malacca remain uninterrupted. But as choke-point risk continues to reprice globally, from Hormuz to the Red Sea, the South China Sea is increasingly part of that same conversation. Scarborough Shoal may be a localised dispute, but the tactics being tested there, and the fleet density the data reveals, are anything but local.”

There are a couple of other choke points that countries such as Australia need to factor into its plan for energy sovereignty. The first is already evident, as Beijing moved to prioritise domestic demand over supplying other markets with fuel shortly after the third Gulf war began. Anthony Albanese has called Chinese Premier Li Qiang to discuss energy security but there is little sign it had any effect.

China was a major supplier of jet fuel to Australia, but the last shipment from there departed on March 13. Given the forward booking of these cargoes, it appears China has not honoured existing contracts with Australia, still less offered to help in this crisis. In the Prime Minister’s shuttle fuel diplomacy Beijing has yet to appear on the flight schedule.

Beijing knows energy is power. It is supplying fuel to The Philippines and Vietnam, but only in small, selective shipments. It is not acting as a trading partner but as a gatekeeper.

There is one last choke point, and it is the hardest to clear because it is in the mind: the grim determination of Albanese government ministers to sell a mirage of the swift electrification of everything.

Transport Minister Catherine King declared this week that the world had moved on from drilling for oil in the search for fuel security, saying: “We talk about the need for electrification as part of the energy security, it’s also part of our economic security.”

If King consulted a work produced by her own department, she would have a better handle on how far we have moved on from petrol and diesel. According to the latest edition of Road Vehicles Australia this nation had 22.3 million registered vehicles in January 2025, of which 259,690 are electric, or just over 1 per cent of the total fleet. Most of that is in passenger vehicles, where there are 249,430 electric cars out of 16.08 million, or roughly 1.6 per cent. In the heavy and commercial fleet, electric vehicles number only in the low thousands out of more than five million vehicles; in percentage terms EVs are a rounding error. This does not count all the off-road vehicles working in mines and agriculture.

There was a flurry of breathless stories recently about the surge in the sale of EVs in March so this column called Federal Chamber of Automotive Industries chief executive Tony Weber to sift the statistics.

“March 2026 was the best month ever recorded for EVs in Australia, with 15,839 sales, or 14.6 per cent of the market,” Weber says. “The other 85 per cent of sales are using either petrol or diesel as part of their propulsion. Given there are around 20 million light vehicles on the roads in Australia, it is clear that we will rely on diesel and petrol supply for decades to drive our fleet.”

This electric salvation day buried somewhere over the rainbow also jars with the sight of a Prime Minister burning jet fuel in a race around the region bartering for liquid fuel from our neighbours with the promise of delivering gas and coal. And did anyone hear Albanese trumpet the promise of Sun Cable delivering solar power from the Northern Territory to Singapore when he dropped in to meet with his counterpart Lawrence Wong? Forgive me if I missed it.

The road to a new energy future will be long. EVs will have their place but the power that moves this nation now and in the foreseeable future is liquid. Until we face that reality, we will remain what we have become, supplicants for the fuels we once made ourselves.

As Shakespeare warned, “Our remedies oft in ourselves do lie.” The question is whether we still have the wit and will to find them.

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Canberra is weighing a radical shift in how it taxes gas, with proposals for a flat 25 per cent levy on export revenue now in play. The Senate has established a select committee to examine it. Into that debate steps Bill Johnston, former Western Australian Minister for Mines, Petroleum and Energy, who has lodged a submission drawing on direct experience in a state where gas underpins both industry and domestic supply. He stands out as the clearest voice of reason amid a welter of submissions to the inquiry. Those pushing hardest for the gas tax are often the same voices calling for an end to all fossil fuel use; this committee is their stalking horse.

Here is the Hon Bill Johnston’s submission in full and it is reproduced with his permission.

Key Issues

1. Gas resources can only pay taxation revenue if they are operating.

• Policies and actions to prevent the production of natural gas will have the effect of preventing the collection of tax revenue.

2. Australian gas producers pay significantly more company tax than information technology companies, such as Atlassian

3. The Petroleum Resources Rent Tax (PRRT) is a Commonwealth scheme that applies to oil and gas resources extracted from off-shore, in Commonwealth waters.

• This means that it does not apply to (for example) Queensland LNG producers

• Much analysis of the taxation of the gas industry in Australia is deeply flawed and lacks rigour because it compares taxation in a unitary nation (such as Norway) with only the tax paid to the Federal Government, despite Australia being a Federated country

4. The PRRT scheme was developed contemplating oil production, not LNG projects

• The PRRT is a tax on project profits, not on project revenues

• In the 1970’s and 1980’s, when the concepts behind the PRRT were being developed and implemented, the LNG industry was in its infancy, so it is not a surprise that the authors didn’t consider the LNG sector in detail

• Applying the PRRT to LNG projects – which have much higher up-front capital costs, much longer project cycles, and lower returns on capital invested when compared to oil projects – was always going to delay Government revenue receipts compared to an ad-valorem royalty scheme

• Calculations of the share of revenue collected by the PRRT from any specific project will only able to be made at the conclusion of the project, and certainly not in the project’s start-up phase

5. In my view, the National Offshore Petroleum Titles Authority (NOPTA) has not managed its responsibilities in Australia’s best interests.

• NOPTA is the “other side of the policy coin” to the PRRT – in the absence of an Australian National Oil Company, NOPTA is tasked to ensure projects come to market in a timely manner

• In my view, NOPTA’s commerciality tests have not been correctly applied

• I argue that NOPTA has allowed the “warehousing” of gas resources that should have been developed via existing domestic-only gas facilities (for example, Varanus Island, Devil’s Creek and Macedon)

• Given the legal framework of Australia’s offshore title scheme, it would take about a decade for NOPTA to apply its commerciality test to a specific lease, then refuse a retention lease, and for that particular gas lease to become available to other potential developers, and finally come into production

6. Gas resources extracted in the jurisdiction of the States (including the supplies to Queensland LNG facilities) are taxed by the States through State-based royalties.

• It is not clear to me what information will be available to this brief inquiry that would allow it to make meaningful recommendations for action by the States, who own, manage and tax the resources independently of the Australian Parliament

7. In reference specifically to comparisons of the revenue arrangements between Australia and Norway , these comparisons usually ignore a number of structural differences (in addition to those issues noted above):

• Norway has a national oil and gas company (Equinor) that has an equity stake in projects in Norway, and is the operator in most projects

  • In the 1970’s and 1980’s, Australia chose to allow the private sector to carry the risks of exploring for, and developing, off-shore oil and gas resources, instead of using taxpayers’ money through a National Oil Company to do that task

  • It is my view that Australia did not make the right decision at that time, but the moment for that decision was 1979, not 2026

• Norway has embraced carbon capture, use and storage as a key climate mitigation strategy.

  • This is consistent with the Intergovernmental Panel on Climate Change’s recommendations, not an attempt to prolong hydrocarbon production

• Norway requires its gas resource to be exported

  • It is not just that Norway has no domestic reservation policy, but rather their policy is to export their gas reserves for use in other countries

• Norway’s oil and gas revenues are not used in the Government’s annual budget

  • All of Norway’s oil and gas revenues are placed in a sovereign wealth fund, and it is the earnings on the fund that are applied to the budget.

  • It took decades for Norway to build its sovereign wealth fund to a significant size, and during all of that time their oil and gas revenues did not contribute to budget expenditures

    • It is certainly arguable that Australia should have placed our oil and gas revenues in a sovereign wealth fund, but we did not do that

    • Had we done so, between the 1980’s and today, Australia would have had less tax revenue to spend on social services

8. On 30 November 2009, the Australian Greens political party combined with then Opposition Leader Tony Abbott’s Liberal Party, along with the National Party and the Family First Party, to prevent the introduction of carbon pricing to Australia

• If the Australian Greens political party had supported a carbon pricing scheme in 2009, the oil and gas industry would have significantly reduced their carbon emissions by now, or would have supported significant carbon offsets by others, or would have had to pay significant penalties to the Australian Government

• This Committee might want to report on what our nation has missed out on because of the Australian Greens political party’s grubby deal with Tony Abbott

9. Australia’s LNG exports support the global effort to achieve net zero emissions, and are entirely consistent with The Intergovernmental Panel on Climate Change reports and recommendations, as well as all of Australia’s international climate obligations

• All countries that buy LNG from Australia have their own net-zero commitments

• I view it as a colonial attitude for Anglo-Australians to argue that Asian countries (such as Japan, Korea, China and Singapore) can’t chose their own pathway to net zero

• While the Australian LNG industry must deal with its Scope 1 and Scope 2 emissions, all of the Scope 3 emissions of Australian LNG exports are included in the net zero pathways of our trading partners

• Our LNG import partners have all publicly stated that they require LNG for the next 30 years in order to achieve their net zero outcomes

10. In considering our energy trading partners, we need to particular look at Japan.

Japan was a significant importer of Russian LNG prior to Russia’s illegal invasion of the Ukraine.

• Japan switched off those arrangements, to support collective action against Russia, and is seeking LNG from other countries to replace that lost supply

  • It is clear that Russia would like Australia to reduce our LNG exports, because that would suit the political interests of President Vladimir Putin

  • Japan has increased its reliance on Qatar for LNG, and the consequences of that is clear to see at the moment

  • It is possible that Japan will agree with President Donald Trump’s request and seek additional LNG supply from either:

    • new US LNG production in Alaska, or

    • LNG from the US Gulf of Mexico suppliers, who utilise fracked shale gas as their feedstock

• However, maintaining Australian LNG supply to Japan (or even increasing the supply if that is possible) is clearly a better outcome,

  • for Australia’s national interests,

  • for our Japanese energy partners, and

  • for the global environment

11. Almost 50% of all domestic gas demand in Australia occurs in Western Australia

• Western Australia needs to resolve its own supply challenges

  • Domestic gas supply needs to at least match, and preferably exceed, domestic demand

  • The Australian Energy Market Operator’s WA Gas Statement of Opportunity makes it clear that

    • It is rising demand, not supply constraints, that lead to domestic gas shortages prior to 2032

    • Beyond 2032 there are dramatic supply declines, principally caused by the end of offshore domestic-only projects, not LNG exports

• It is physically not possible for an offshore LNG project to supply domestic gas if it does not have a domestic gas plant and if it is not connected to domestic pipeline infrastructure

  • This means Prelude and Itchys can’t supply domestic gas to Western Australia, and their LNG exports can’t impact domestic gas supply

  • The Pluto 1 LNG facility was also built without a domestic gas plant,and while the Pluto/North West Shelf interconnector does allow some domestic supply, Pluto 1 has not “reduced” its domestic supply

    • This situation is not how I would want the projects to have been built, but is an unarguable fact ,and goes to the heart of the dishonest argument about Western Australian LNG exports being at the expense of domestic supply

• It is completely impractical to pipe natural gas from Western Australia to Australia’s east coast

• In the same way that Western Australia needs to solve its supply challenges, the East Coast gas market needs to resolves its supply problems, too

  • Restricting the production of natural gas, by definition, contributes to supply shortages

  • How anyone can oppose increasing supply of natural gas and at the same time complain about a lack of supply defies logic

12. By definition, a domestic gas reservation policy is contingent on LNG exports

• If you are not exporting LNG, by definition there is nothing to reserve

• Western Australia’s domestic gas reservation policy only works because there are LNG exports, and the gas for export is coming from Commonwealth waters

13. In Western Australia, the North West Shelf, Gorgon and Wheatstone LNG projects have domestic gas plants, and this domestic gas production is the cornerstone of Western Australia’s domestic gas supply.

• Without these LNG projects, Western Australia would have significantly less supply of domestic gas and we would be in energy crisis

14. In Western Australia, generating electricity is not the main use of domestic gas

• This means that Western Australia’s work to massively increase the use of renewable electricity does not significantly reduce the demand for natural gas

15. Much of the natural gas that is used in Western Australia is used as feedstock for, or as a reagent in, manufacturing

• It is sometimes technically impossible, and in other cases extremely difficult, to use renewable energy in these production processes

• Unless we ensure that imported products meet the same high standards as are required of Australian industry we will be increasing impacts on the global environment if we stop this domestic manufacturing

16. The largest demand for natural gas in Western Australia is our mining and mineral processing industries

• The welfare of every Australian is linked to the export of minerals by Australia, from Western Australia, as well as from every other State and the Northern Territory

  • A move to renewable energy means the demand for global minerals is increasing

  • Electric vehicles require many times more minerals than traditional vehicles that use internal combustion engines, also increasing the demand for minerals

• The processing of critical minerals (such as converting lithium spodumene into lithium hydroxide) requires process heat that cannot currently be provided by renewable technologies

• The processing of rare earths – which are used in wind turbines – also requires natural gas

17. Demand growth for electricity mitigates against reducing the use or Gas-Powered Generation (GPG) in electricity grids

• For example, in the South West Interconnected System (SWIS), it is expected that GPG contribution to overall supply of electricity will fall from approximately 35% in 2018 of supply to about 20% of supply in about 2030

• However, if demand for electricity in the SWIS increases by three times by 2040 (as is predicted in the Whole of System Plan), then the use of natural gas for generating electricity will increase

  • Unless demand for electricity remains stable, achieving 80% renewable generation does not, by itself, reduce demand for natural gas.

  • Moving to high levels of renewable electricity generation is an important goal, but it does not by itself prevent increasing gas demand

18. The Pluto 2 LNG project is building a domestic gas plant, and their largest domestic customer is Perdaman

• At $7 billion, Perdaman is Australia’s largest ever manufacturing investment

• Perdaman will produce fertilisers and urea, which are essential to global sustainability

• The war started by the United States in the Middle East has reminded everyone in Australia that Perdaman’s proposed products are essential to our nation

• It is shocking to think that there are people and organisations who have lobbied against the Scarbough gas project, which feeds into the Pluto 2 facility, that will supply Perdaman

• Unbelievably, many of the people who opposed the Scarbough and Perdaman projects do not campaign against importing fertiliser or urea from the Middle East and China

  • This means these campaigners are applying different sustainability criteria to Australian industry than they apply to overseas producers

  • Middle East countries are not democracies, and neither is China

  • Further, China produces fertiliser and urea from coal, which creates more greenhouse gas emissions than will be the case for Perdaman

19. The Browse project is essential for domestic gas supply in Western Australia beyond 2030

• Without Browse, Western Australia will have a shortage of domestic gas, which will impact the standard of living of everyone in Australia – not just those of us who live in Western Australia

• Because the Browse project is so large and complex, the project can only proceed with LNG exports

  • Browse LNG exports will be to countries that have commitments to net zero carbon emissions, as outlined above, and

  • Browse will not increase Australian LNG exports (and therefore not increase our Scope 3 emission) as the gas will be processed using the existing North West Shelf LNG facilities

    • Browse LNG production replaces current LNG production, it is not additional LNG production

• If processed at the North West Shelf, LNG exports from Browse are not in opposition to domestic supply - they create the opportunity for domestic supply

• There are no circumstances in which the Browse project can proceed by supplying domestic demand alone

• The continued operation of the North West Shelf LNG facility as part of the Browse project is accommodated within Australia’s existing net zero pathway

• Because of the size and complexity of the Browse to North West Shelf project, for the supply of domestic gas to be available shortly after 2030, final approvals need to be granted within a very short period of time, probably this year

• Opponents of the Browse project must explain exactly where the supply of domestic gas will come from, and why the project they support is more environmentally acceptable than the Browse project

20. It is in Australia’s national interest, and in the interests of all Australians, that Australia has adequate supply of natural gas.

• In Western Australia, LNG exports allow for domestic gas supply, and without LNG exports the multi-billion dollar offshore projects would not exist

• LNG exported from Western Australia has never used pipeline gas, and it has never been produced at the expense of domestic gas demand

• Western Australia is not currently connected to the East Coast gas pipeline network, and so our LNG exports cannot be “redirected” to the East Coast

• Changes to taxation arrangements must have as their first objective the supply of gas, not meaningless ideology

  • No gas production means no taxation paid by gas producers

  • No gas production in Australia will mean more dependence on imported products, with no improvement in global greenhouse gas emissions

Selected Bibliography

Australian Senate Hansard, 30 November 2009
https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;db=CHAMBER;id=chamber%2Fhansards%2F2009-11-30%2F0008;query=Id%3A%22chamber%2Fhansards%2F2009-11-30%2F0000%22

Intergovernmental Panel on Climate Change Report “Carbon Dioxide Caputre and Storage”
https://www.ipcc.ch/report/carbon-dioxide-capture-and-storage/

Economics and Industry Standing Committee of the Western Australia Legislative Assembly (38th Parliament), “Inquiry into Domestic Gas Prices” (Report 6, 2011)
https://www.parliament.wa.gov.au/Parliament/commit.nsf/(Report+Lookup+by+Com+ID)/7895FF6E76A7CDB74825785D0013F234/$file/DGP%20Report%20%5BFinal%5D%2020110324.pdf

Economics and Industry Standing Committee of the Western Australia Legislative Assembly (41st Parliament), “Domestic Gas Security in a Changing World” (Report 8, 2024)
https://www.parliament.wa.gov.au/Parliament/commit.nsf/(Report+Lookup+by+Com+ID)/27F837EAB987BD9548258B790020F885/$file/20240814%20-%20RPT%20-%20DOMGAS%20FINAL%20updated%20for%20web.pdf

Energy Policy WA – Energy Transformation Taskforce, Whole of System Plan (and related documents)
https://www.wa.gov.au/government/document-collections/whole-of-system-plan

Australian Energy Market Operator Western Australian Gas Statement of Opportunities
https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/wa-gas-statement-of-opportunities-wa-gsoo

Australian Energy Market Operator Western Australian Electricity Statement of Opportunities
https://www.aemo.com.au/energy-systems/electricity/wholesale-electricity-market-wem/wem-forecasting-and-planning/wem-electricity-statement-of-opportunities-wem-esoo

Department of Climate Change, Energy, Environment and Water Australian Energy Statistics
https://www.energy.gov.au/energy-data/australian-energy-statistics

Equinor (Norwegian National Oil Company) https://www.equinor.com/

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In January, the Pentagon released an image of the USS Canberra escorting a massive cargo ship carrying four ageing US Navy Avenger-class minesweepers out of the Persian Gulf.

The wood and fibreglass vessels were beginning a long journey to a scrapyard in Philadelphia after being retired from service with the Bahrain-based US Fifth Fleet last year.

American minesweepers have been patrolling the waterways of the Gulf since tankers were targeted during the Iran-Iraq war in the 1980s. But as the Cold War peace dividend was cashed in, de-mining slipped down the Pentagon’s priorities. Mine Warfare Command was dismantled in 2006 and its ageing fleet was left to atrophy in a corner of the US Navy that had no real champion.

The picture of the minesweepers’ departure, just before the shooting started in the third Gulf War, is pregnant with meaning. Most immediately, it reveals Operation Epic Fury as an epic failure of timing, judgment and strategic imagination.

Days after the war began, Iran laid mines in the Strait of Hormuz, disrupted the world’s most vital artery and sent shockwaves through the global economy. The presence of the minesweepers was testimony to the fact the US had understood this risk for 40 years. Donald Trump chose to ignore it.

A New York Times article co-authored by its Australian-born and bred White House reporter, Jonathan Swan, revealed this week that the US President was convinced any war with Iran would be swift and decisive. He was already leaning into that view before Israeli Prime Minister Benjamin Netanyahu arrived in the White House Situation Room on February 11 to argue that Iran was ripe for regime change and that a joint US-Israeli mission could topple the Islamic Republic.

The next day Trump’s advisers gathered without their Israeli counterparts to caution the President against the notion of a quick and clean victory. CIA director John Ratcliffe is reported to have described the regime change scenarios as farcical. Secretary of State Marco Rubio weighed in, saying, “In other words, it’s bullshit.”

Chairman of the Joint Chiefs of Staff General Dan Caine warned that a major campaign against Iran would drastically deplete American weapons stockpiles. He also flagged the enormous difficulty of securing the Strait of Hormuz and the risk that Iran would attempt to block it.

Those who believe Trump enjoys a kind of secular papal infallibility will dismiss this report because of the masthead that printed it. The counter is that Swan has been remarkably good at his craft for a long time and the report rings true because the concerns raised are exactly what anyone paying even modest attention to the region, its history and its geography would have concluded.

Someone also might have added that the enduring feature of American military campaigns since Vietnam has been the difficulty of converting overwhelming tactical superiority into lasting strategic success.

Once Trump would have volunteered this view. One of the reasons so many war-weary Americans were drawn to him was his pledge to end the forever wars. In 2020 he told a group of West Point graduates it was not the job of American forces “to solve ancient conflicts in faraway lands that many people have not even heard of”.

Since last year’s 12-day warm-up in Iran and the assault on Venezuela, it is as if the President had discovered a new key he believed could unlock all doors. It must be intoxicating to have the power to rain destruction on your enemies but, alas, not all have the same motivation. Some don’t do earthly deals. The threat of death does not work on people who believe martyrdom is a glorious gateway to eternal life.

Those of us who love life are left to grapple with how best to deal with navigating the realities of this world. And earthly concerns have been rapidly reordered around the planet.

That is why there is a far deeper meaning buried in the image of ageing American minesweepers being led out of the Persian Gulf by a ship bearing the name of our capital. It speaks to something difficult to capture in words other than epoch defining.

This was a funeral procession for a world order Australia’s leaders assumed would endure. It is a photograph taken at the hinge of history, capturing not just the retirement of a class of ships but the crumbling of an empire of ideas. The old order has been discarded, largely through a wilful act of vandalism by the President of the nation that built and defended it.

Unfortunately, Australia built its modern economy on that order. That bet is now a busted flush. The only certainty from here is that the times will suit us less well. So, we need to deal with the world as it is, not as we hope it might be.

In the shadow of the US security guarantee, we built an island nation that could outsource most of the goods it needs to survive. We grew things, dug things up and sold them for export cash that crashed on to our shores in ever larger waves as commodity prices rose with the spectacular rise of China.

We slowly unlearned how to make things as manufacturing was shipped offshore. In its place we built supply chains that circled the globe and delivered cheap imports. We grew rich and became complacent as inflation fell and the job losses that come with recessions passed out of memory.

It was in that era that one of the most liquid fuel-dependent countries on Earth mostly stopped producing oil, shut down domestic refining and became addicted to imports. We dismantled our buffers and discarded resilience as inefficiency.

We barely contemplated the idea that the world beyond our shores might not always be open, stable and benign. We organised our economy around a just-in-time delivery in a world where, one day, times were bound to turn. Which is why, when the system failed, the shock was immediate and elemental.

We are now scrounging around the world for shipments of fuel at any price. What matters now is how we respond. We need a short, medium and long-term plan for securing our energy independence. It will not be cheap or easy but the cost of not doing it could not be written more starkly and there are opportunities for a country with Australia’s deep energy endowment.

In tailoring our response, we should watch what the world is doing as it confronts the same crisis.

With a fifth of the world’s oil and gas disrupted by war, a vast hydrocarbon hole has opened in the global economy. Countries are scrambling to fill it. Governments are turning to what they can control. Thermal coal prices have climbed from around $US110 a tonne earlier this year to about $US130 to $US140, as gas disruptions in Asia force utilities to switch fuel.

Coal-fired plants that were meant to close are being kept open. Others are being run harder. Japan is increasing coal-fired generation to conserve gas. South Korea has lifted caps on coal output. India has ordered its coal fleet to run flat out. The Philippines, Bangladesh, Pakistan and Thailand are doing the same. Italy has postponed the closure of its coal-fired plants for more than a decade. Germany, once the wind and solar standard bearer and now twice mugged by the real world, is beating a strategic retreat. Chancellor Friedrich Merz has warned that if this crisis endures, Berlin may have to keep coal-fired power plants running longer than planned.

“We have to supply this country with electricity,” Merz said. “I am not prepared to jeopardise the core of our industry just because we have decided on phase-out plans that have become unrealistic.”

At a conference in Texas Berlin’s Energy Minister Katherina Reiche said the EU should loosen its “rigid” adherence to climate neutrality and allow itself to miss its 2050 net-zero goal.

Reiche stressed that economic growth must come before green targets.

“At the end of the day, it is good to have a goal of sustainability – but if sustainability crashes your economy, you have to readjust,” Reiche said. “And that’s what we’re doing right now.”

In Europe, the price of carbon has fallen since the war began. The system designed to penalise emissions is under pressure to release more permits and soften its constraints. The price of emitting is being lowered just as the incentive to emit is rising.

Decisions taken under stress tell you a lot. Energy security is a must-have. Cutting carbon is an adornment.

The markets are sending the same signal. Oil moves with every presidential utterance, but the more important story lies further down the chain. Diesel, petrol and jet fuel are what move trucks, ships, planes and armies, and they are rising faster than crude. With the interruption to the oil supply and the worldwide scramble for fuels those costs will stay high even if the passage through the Strait of Hormuz is cleared.

In bond markets, the cost of money is climbing. Governments are paying more to borrow as energy, inflation and risk are repriced together. They are also preparing to spend more to cushion the shock, pushing long-term borrowing costs higher still. The cost of keeping the system running is rising at the same time as the system itself becomes more uncertain.

Put these signals together and a pattern emerges. When the system is stressed, it behaves as built and the house hydrocarbons built still runs on coal, oil and gas.

That reality should shape Australia’s response. We should use every resource at our disposal to secure our independence in liquid fuels and all other sources of power. We should be truly energy agnostic. Coal, gas, oil, uranium, wind, solar and batteries all have a role to play and we should aim to become an energy superpower.

The Gulf states understood this decades ago. They did not just extract hydrocarbons. They built the industries that flow from them, from plastics to fertilisers, from petrochemicals to pharmaceuticals. They captured value across the entire chain.

Australia could do the same. We could power energy-intensive industries. We could host the data centres that will drive the next wave of artificial intelligence. We could secure our own future while helping to fill the hydrocarbon deficit now emerging in the global system.

That requires a shift in thinking. It requires us to see energy not as a carbon-emitting liability to be managed but as a strategic asset to be developed. The lesson from this crisis is that security is essential and energy security underpins economic and national security. No fuel, no future.

A ship bearing the name Canberra escorting the last minesweepers out of the Gulf is a snapshot of an era when the world was governed by American power and a network of alliances.

That era has passed. Now we endeavour to chart our own future or live in a world where hostile states determine it for us. We are not powerless unless we choose to ignore the power beneath our feet.

This article was first published in The Australian

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An American friend asked me why Australian politics appear stable relative to the rest of the world, given how steeply our living standards have fallen. My on-the-spot answer was that we started from such a height that even after a major downturn, Australians still consider themselves lucky. And though our politics appear relatively stable for now, populist energies are growing from a sense that our luck has run thin, and that we’re led by people who rely on it.

“One of the central questions for Australians is whether the conditions that produced so much happiness and success have also weakened the nation’s adaptability and slowed its reflexes of survival.” Donald Horne, The Lucky Country

To call Australia “the lucky country” is to invoke a cliché drawn from Donald Horne’s 1964 book. The Lucky Country offers a sprawling portrait of Australia during the boom years, when we were perhaps the most evenly prosperous nation in the world. Horne describes a land of plenty, with “more savings accounts than people”, where cars and TV sets were abundant, and around 70 percent of the population owned their own home.

He described his countrymen as a practical people, open to change but not easily led. There was something in the sceptical cast of the Australian psyche that kept us resistant to ideological fervour. We regarded our politicians as managers hired to ensure everyone got a “fair go”, and let them go about their business with little interest or oversight.

He thought Australians lived under a false accusation of laziness, though we didn’t always take work as seriously as our leisure. Borrowing an observation from the English historian J. A. Froude, he captures something essential about the Australian way of life. “It is hard to quarrel with men who only wish to be innocently happy.”

The book flips back and forth between a paternal fondness for the Australian people and a scorching critique of their leadership. Even the title, The Lucky Country, was coined as an ironic dig at Australia’s political class, which makes it faintly comic that so many of the politicians Horne would have mocked now use it as a patriotic slogan.

“Australia is a lucky country run mainly by second-rate people who share its luck. It lives on other people’s ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise.” The Lucky Country

Australia worked well despite its elites, Horne argued, and our prosperity came from a vast resource endowment, inherited British institutions, American ideas, and the practical competence of ordinary people. He accused the Menzies government of muddling around while projecting an “aura of competence”, drawn in part from a British imperial persona that was increasingly out of step with the times and with the Australian public.

The Lucky Country struck a chord in the Australian zeitgeist of the 1960s, and reflecting on its success, Horne later said it was written at a time “when Australia seemed to be rusting up. Changes and challenges were everywhere, yet nothing much was moving”. He correctly saw that the easy ride of the long postwar boom was coming to an end, and wrote the book to grease the rusted cogs of a “regime” that had endured far beyond its time.

By the time his book was published, Britain’s colonial order had become vestigial, and the Australian elite were caught between the British pretensions of the past and the American know-how of the future. Much of Horne’s critique was answered in the intervening decades, as Australia opened up to the world and built closer ties with Asia. But while we like to think of this era of global liberalisation as a break from imperial dependence, it may be better understood as a gradual transfer of attachment.

Since the 1960s, the Australian political class increasingly took its cues from an American model that prized global finance and supply chains over local production, credentials over trades, and cosmopolitanism over national identity. I came of age at the apotheosis of the American global empire, while my mates skateboarded the rolled Californian curbs of outer-suburban Melbourne and I sat streetside trading NBA cards with an Indian kid who called himself Snoop Dogg.

Now, as America pulls back from its leadership role and the imperial metanarrative fades, we find ourselves in a moment with many parallels to the one Horne grappled with in the pages of The Lucky Country.

“Many of the nation’s affairs are conducted by racketeers of the mediocre who have risen to authority in a non-competitive community where they are protected in their adaptations of other people’s ideas. At times they almost seem to form a secret society to preserve the obsolescent.” The Lucky Country.

The difference between Horne’s coasting elite of the 1960s and ours in the 2020s is that Australian affluence in the 1960s was rock solid and widely felt. We can still produce decent aggregate numbers, but much of our wealth now rests on perception. Asset inflation, migration-fuelled demand, and government debt provide numerical cover for a far hollower and more unevenly distributed form of prosperity.

A friend recently captured the disjunct between the numbers and life on the ground in a pithy line. “I’ve never had more money, but I can’t seem to do anything with it.” Younger Australians who missed the cheap credit and asset gains that made this friend rich are stuck in the same stagnant economy, locked out of a staggeringly expensive housing market, and living pay cheque to pay cheque as inflation drains their capacity to create stability.

Our economic hollowness is in part the local expression of a larger geopolitical transition. China’s absorption of Hong Kong, Russia’s war in Ukraine, and Iran’s closure of the Strait of Hormuz all suggest that the rules of the “rules-based” international order are becoming a thing of the past. Rising powers have now built up enough military and productive weight to move through the global arena as leaders and rule-setters in their own right, while the BRICS coalition’s willingness to move away from settling trade in US dollars signals the beginning of a tectonic shift in global trade. Just as new iOS updates trigger bugs in ageing hardware, our Australian economy, built for another era, will continue to glitch under a changing international logic.

The Albanese government claims to be rising to these new challenges through its economic resilience agenda, aimed at strengthening domestic capability and diversifying supply chains. Critics, however, argue that these appeals to resilience are strategically shallow and are being used to justify net zero industries that remain heavily dependent on Chinese production. On our current trajectory, we continue last century’s pattern of relying on American power for security while deepening our dependence on its primary rival. I’m struck by a vision of a quokka tethered to two bears as they snort and pace.

From within the Coalition, Andrew Hastie has begun to signal a desire to break with the long twentieth century. He claims that “the post-Cold War global order is now dead” and that “Australia is unprepared to meet that harsh new reality”, a degree of stark realism most other politicians here refuse to adopt. He argues that Australia is now facing a political rupture with a decades-long “uniparty” made up of both centre-left and centre-right leadership. In his view, the Liberal and Labor parties have been tacitly united by an “unconstrained” political vision that has led the country down a destructive path of mass migration, debt accumulation, and the hollowing out of Australian industry and institutions.

I’d argue that Hastie’s “uniparty” is our Antipodean mirror of the American regime against which Trumpism emerged as a populist revolt. After the Cold War, America sent much of its productive capacity offshore as it retooled into a predominantly service-based economy, and we followed suit. In both countries, the political left gradually shifted away from its industrial working-class roots and toward a credentialed service class with more cosmopolitan cultural sensibilities. Labor remains tied to unions, but union strength is now concentrated in education, public administration, and health care. Much of its organised base is now embedded in institutional sectors whose fortunes rise and fall with public spending.

Meanwhile, the Australian right became symbolically conservative, ceding the social terrain to Labor and the cultural sensibilities of its institutional base while liberalising the economy in ways that increasingly benefited asset holders and global capital. The result is a mixed bag of Australians whose interests, values, and political power have been pushed aside by big business and big institutions.

Commentators here like to dismiss Australian expressions of culture war as nothing more than social media pathology, but the conflict isn’t that abstract. It reflects the class logic of the American-inspired global model we imported, and the fact these political leftovers can now network on social media. With local variations, this basic political pattern plays out across the deindustrialised West, where populist uprisings are contesting the reigning political paradigm, or in Andrew Hastie’s terms, the “uniparty”.

Hastie isn’t a populist, but he recognises that our existing political economy “no longer supports the aspirations of mainstream Australians” and calls for a “massive overhaul”. Whether these ambitions can be expressed through the arthritic bones of the Liberal Party remains to be seen. The prevailing mood, to which the polls attest, is that the Liberals seem unable to manoeuvre even basic reforms, let alone deliver an overhaul. In frustration, political energy moves further right, toward One Nation, which takes a brash, quasi-Trumpian approach to demolishing the old order.

Horne’s critique of 1960s Australia was that we were led by uninspired figures formed in the imperial British mould of the previous century. Since the turn of this century, our leaders have reprised the same type. Only now it’s the imperial American caste that shaped them. Under their leadership, we’re coasting toward a nation with all the charm of an international airport, where everyone is from somewhere else, consumer commerce pervades everything, and the rich seclude themselves in private luxury.

Though Australia has changed a lot, I still see glimmers of the country Horne described in my day-to-day life. It remains largely uninterested in politics, even as structural conditions make the pursuit of innocent happiness difficult. For the most part, it lives offline and on the periphery of our cultural representations, in the practical competence of people simply getting on with it.

It’s rhetorical sleight of hand to blame a nation’s pathologies on foreign influence alone, and that’s not my argument. Horne himself noted that Australians and Americans mean much the same thing when we speak of freedom, equality, affluence, and the pursuit of happiness, in a way we never quite did with the British. We share much of America’s civilisational DNA, and we’ve been influenced by the great nation lke a young boy is influenced by an admired older brother.

But under Donald Trump, and perhaps in honest recognition of its material decline, the United States is pulling back from the big brother role. And as that shelter thins, we have to confront some difficult questions. Who are we? What can we make here? What can we defend? What is our distinct way of life, and how do we conserve it?

If we continue to avoid these hard questions, I fear who we’ll imitate next.

Michael Nayna is a filmmaker and managing director of Checkpoint Media.

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Australia’s future now hangs on a complex international chess game involving ships carrying liquid fuel from distant refineries across the oceans to our shores.

It is sobering to track this traffic in real time on a Kpler dashboard, where loaded vessels appear as green arrows inching towards their destination. Touch an arrow and the name of the ship appears, along with its cargo, the port it left and the one it is bound for. That thin green line pointing towards Australia is all that stands between continuity and crisis in this island nation. If it breaks, or even slows, the effects here will be swift and severe.

Kpler is a global trade intelligence company that sits at the nerve centre of the physical economy, stitching together billions of data points to show how energy and commodities are actually moving around the world. It has generously given this column access to its data.

Isolate the trade in diesel, petrol and jet fuel to Australia and it shows 36 ships on their way at the time of writing. Twenty-eight are coming from the Asian refineries that usually supply 90 per cent of our fuel. More than two of these ships must off-load at a port here every single day to feed our voracious appetite for liquid fuel, as more than 40 per cent of all the energy consumed in Australia is burned in the engines that drive transport, mining and agriculture.

The notable recent shift in the fuel trade is the emergence of long-haul supply. Four ships have crossed the Panama Canal after loading on the US Gulf coast. Two more have sailed from a refinery in Washington state and another was loading there on Thursday. Historically, fuel imports from the US have been rare, so a distant and more expensive supply line has been tapped to keep Australia moving.

But one cargo now slowly tracking down the west coast of Africa stands out, and its journey here tells the story of a nation scrounging around the world to fill supply gaps at any price.

The STI Solace set sail from Southwold Anchorage, off the Suffolk coast, on March 19 and is due to dock in Sydney on April 29. It is a mid-sized tanker carrying nearly 654,000 barrels of fuel, or about 104 million litres. It sounds like a lot but Australia uses about 173 million litres of refined fuel every day. So the STI Solace has enough fuel in its tanks to keep the country running for little more than half a day.

On paper, this cargo looks like a shipment from the UK. But the fuel did not originate in Britain. It was transferred there.

Another tanker, the Oslo Star, loaded this cargo from a refinery in Kuwait in mid-February and sailed out of the Gulf before the shooting started. It then tracked west into the Red Sea and up through the Suez Canal, emerging into European waters in early March. As it crossed the Mediterranean and entered the Atlantic, its destination shifted repeatedly, first towards North Africa, then Rotterdam and finally to an anchorage off the Suffolk coast.

When it reached Southwold on the morning of March 19, the cargo was transferred ship-to-ship on to the STI Solace, which set sail that evening and is now carrying it halfway around the world to Australia.

Kpler’s data goes back to 2014, and this is the first time the company has recorded such a trade.

The complex logistical dance was choreographed by the Scorpio Group, a Monaco-based company that operates large fleets of tankers moving fuel between continents. Firms such as this do not produce energy. They move it, trade it and, since the war in the Gulf kicked off, redirect it in response to price and scarcity.

Forgive the blizzard of detail, but it reveals something important. This was not a shipment planned for Australia. It was a cargo looking for a buyer and in the end Australia paid the highest price. So this is not a straight supply chain, it is an expensive relay where each baton change adds costs and complexity.

Australia is now engaged in a bewildering and increasingly desperate global scramble for fuel in a deeply fractured market. Our security sits largely in the hands of major producers and international traders who are constantly reshuffling cargoes to meet demand. When supply tightens, the system stretches. Cargoes are rerouted. Ships change hands at sea. Fuel travels farther, costs more and takes longer to arrive.

The world entered this crisis with good supply and a significant volume of oil, including a black fleet of sanctioned Russian cargoes, sitting on the water in tankers. That floating stock is now being rapidly drawn into the market at higher prices. No one is knocking back Russian fuel any more. But this is a limited buffer. As those cargoes are absorbed, the global chessboard will start to lose pieces and supply will tighten further.

In the gap between supply and demand lies the risk. The longer the Strait of Hormuz remains constrained and under the control of Iran, the more precarious this market becomes. It should be noted that Iran is still shipping oil and making a hefty profit on it.

In the supply chain chess game the Albanese government is a bystander.

That was writ large in the Prime Minister’s address to the nation and his speech at the National Press Club. When asked about the fuel crisis, Anthony Albanese talked about tempering demand by travelling less or lowering costs by cutting the heavy vehicle duty, the fuel excise and the GST.

These are price and demand Band-Aids on a haemorrhage of supply.

The government’s only supply-side moves have been to change rules to allow the limited amount of fuel we refine to stay onshore and to let the Export Finance Corporation underwrite additional fuel shipments. This is to provide comfort to the big energy companies that source the fuel.

The cargo on the STI Solace would have come at a premium. If the price drops in the month it takes to get here, the taxpayer will wear the cost.

When asked about his long-term plans to secure supply, the Prime Minister said everything was on the table but then ran through the usual bureaucrat’s list of reasons that most of it would be too hard, take too long or be too expensive.

It should be self-evident to even a casual observer that our future depends on becoming self-sufficient in liquid fuels as rapidly as we can. It will not be quick, cheap or easy, but contemplate the alternative. If the fuel stops, Australia stops.

That means using conventional and unconventional methods to secure the fuel we need to run the nation. Western Australia and Queensland have oil. NSW has gas and, as Robert Gottliebsen has argued in these pages, Victoria’s vast brown coal reserves should be tapped. Technologies now exist to convert coal into diesel and aviation fuel, turning a stranded resource into a strategic asset.

Energy security is national security and our security is now out of our hands. This was a wilful, catastrophic failure of the political class more than 20 years in the making. This crisis should be the catalyst to fix it but the early signs are not good.

Anyone who says electric cars are the answer is not serious. They have a role, but truck traffic between Sydney and Melbourne on the Hume Highway alone runs at 1900 B-double equivalent trips a day. That is 700,000 trips a year. The technology to rapidly replace all that traffic at the same cost and efficiency as diesel does not exist.

Just before Albanese addressed the press club, Donald Trump spoke to his people. The American President made the point that the US could walk away from the war in Iran without reopening the Strait of Hormuz because his country did not rely on it for fuel security.

He is right. After decades of declining oil production, something extraordinary happened to US energy supplies from 2010 on. The shale oil revolution turned the US into the world’s biggest producer of oil and natural gas.

Trump can walk away from the war with Iran and his country will absorb the shock. Prices may rise. Consumers will feel it. But the system holds. The US has choices. Europe and Australia do not.

That is what makes this moment so stark.

The world is organised around energy. As the world’s best energy analysts at Doomberg argue, power, prosperity and security flow from those who produce it. For decades, globalisation obscured that reality. Oil moved freely, trade routes were protected and supply chains, though complex, were dependable. The Gulf war has exposed how fragile the old system was. That world is breaking and will not return to business as usual.

Supply is no longer guaranteed. It is contested, disrupted and increasingly weaponised as the global energy market fragments into competing spheres of influence.

In the emerging world order, geography and resources matter again.

The US, Russia and China are well placed in the new order. They have energy within their borders or within their reach. Europe does not. Australia has it but has chosen not to use it. Both have come to rely on long supply chains in a world where distance is now a vulnerability. Both have demonised the fuels on which their societies run. This virtue signalling is a vanity we can no longer afford to indulge.

Doomberg’s central insight is that energy systems do not evolve gradually. They appear stable, then shift suddenly when a shock hits. When that happens, the system does not return to what it was. It reorganises around new realities.

For exposed, import-dependent nations such as Australia, the implications are profound. Energy is not just another commodity. It is the foundation of economic life and national security.

We can ignore that truth or we can act on it. Because if we do nothing and that thin green line breaks, so do we.

This article was first published in The Australian

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In February 1977 the new economics teacher at Marist College in Canberra decided to make a dramatic entry.

He strode into the fifth form classroom, picked up the chalk and scrawled one word in capitals across the top of the board: stagflation.

He underlined it and turned to explain. This was a new economic concept, designed to describe our times, when high inflation and high unemployment collided. The word was an inelegant blend of stagnation and inflation, and it was a child of the 70s oil shocks.

Why?

Because oil was not just another commodity. It was the master resource that made and moved economies. When the flow of oil was constricted, the price surged and raised the cost of almost everything at once: transport, manufacturing, farming, plastics and food. Prices rose everywhere because the cost of the lifeblood of the modern world had spiked, and the shock ran down every artery and vein.

The constriction of oil supply also slowed the world’s heartbeat. Households had less money to spend after filling the car and paying the bills. Businesses faced rising costs, shrinking margins and weaker demand. Investment stalled, production slowed and jobs were lost.

Economists had long assumed there was a trade-off between inflation and unemployment, captured in a neat model called the Phillips curve. The oil crisis delivered both together. Growth weakened, unemployment rose and inflation surged. The real world broke the model, as it so often does.

With the third Gulf war raging, everything old is new again and a word not discussed outside universities in nearly a half-century is coming back into vogue. The threat is real. The toxic cocktail that could breathe stagflation back into being is being mixed again.

Jim Chalmers did not invoke the term in his speech to business economists this week but all the elements were there.

The Treasurer told the audience the oil price was up 80 per cent since the start of the war, “adding upward pressure to global inflation, interest rate expectations and bond yields, while international equity markets and sentiment more broadly have fallen”.

“It means the prospect of inflation peaking in the high 4s or even higher this year is very real,” he said.

The world’s economic heartbeat is slowing and Australia’s already anaemic growth will weaken further. The longer the oil clot lingers, the greater the damage.

“Treasury estimates that GDP would be 0.6 per cent lower in 2027 and even by 2029 would still be below where it would have been without the conflict,” Chalmers said.

On a flying visit to Australia, International Energy Agency executive director Fatih Birol warned world leaders had yet to grasp the scale of the damage done to the “vital arteries of the global economy”.

Birol says his agency calculates that the shock from the Gulf war outstrips the twin oil crises of the 1970s, combined with a cut to gas supplies bigger than the one that followed Russia’s 2022 invasion of Ukraine. The world has lost about 11 million barrels of oil a day, roughly one in every 10 it consumes. And 140 billion cubic metres of gas have evaporated, the equivalent of stripping a major industrial economy’s entire supply out of the global system.

Some of the damage is structural because, in its fight to survive, Iran has bombarded the energy assets of its neighbours. More than 40 oilfields, gas plants and export terminals across the region have been hit.

Even if there were a swift end to the third Gulf war, the world is a long way from turning its oil and gas tap back to anything approaching normal.

Despite the military dominance of the US and Israel, the choke point of the Strait of Hormuz is effectively controlled by Iran. Trade through that waterway now depends on what the bloodied, battered but still unbowed theocratic regime will allow. Even if an agreement to open it were reached tomorrow, trade would take months to normalise.

But you cannot export oil and gas you do not have.

The Economist reported this week that Brent crude, at $US112 a barrel, is 54 per cent higher than before hostilities began. Gas prices in Europe are up by 85 per cent and the damage will not end when the shooting stops. Ships are in the wrong place, insurance has been shredded, production has been cut and refineries that have gone idle cannot be flicked back on like a light switch.

Restoring energy flows is a long industrial relay. Gulf producers must bring damaged or idled output back online. Tankers must be willing and able to return. Refiners in Asia and elsewhere must restart plants that have been starved of crude. None of that happens quickly. Some liquefied natural gas plants, such as Qatar’s Ras Laffan complex, will take years to recover. Even under the best case, The Economist says it could take around four months for markets to regain some semblance of normality.

Each day Australia wakes up to the reality that oil and gas do far more work in our economy than most people realise. Rising costs are already feeding through to everyday goods. Building materials are climbing sharply as the price of oil-based goods rises. The spike in transport and production costs are moving through the food chain and that will soon be felt at the checkout.

That is how a war in the Gulf turns up in suburban Australia. Not just at the bowser but in the cost of building a home, fixing a pipe or filling a shopping trolley. Hydrocarbons are everywhere; if they do not help make a good, they move it. When their supply is choked, inflation spreads like wildfire.

The pain could get a lot worse. The biggest risk is that the steady flow of more than two vast oil tankers a day is interrupted. If that happens, Australia would be forced into fuel rationing, as others already have. So far the chain has held but the links are straining and the longer the crisis lasts the greater the risks that one will break.

It is worth repeating that it is a national disgrace that a generation of politicians, of all colours, has allowed this country to reach a point where 90 per cent of its liquid fuel is imported. Worse, they assumed the supply lines would never fail and allowed fuel reserves to fall to barely a month’s cover. That is not misfortune. It is an abject policy failure.

We were warned.

When I left the ABC in 2017, the first story I filed as political editor for Nine News was that Australia was in breach of its obligations to the International Energy Agency to hold 90 days of fuel reserves. My new bosses were a bit bemused by my energy obsession but they humoured me.

I don’t claim credit for the insight. I was persuaded by the argument of a man I had come to know well, former fighter pilot and retired air vice-marshal John Blackburn.

In 2014, Blackburn wrote a report for the NRMA warning that Australia’s fuel reserves were running on empty. This fossil-fuel rich island nation had lost the capacity to produce and refine its own fuel. We had become dangerously dependent on imports, with reserves so thin we were counting tankers at sea as part of our stockpile.

Then, as now, 90 per cent of the liquid fuel that keeps this country running came from overseas. We were told the problem would be fixed by 2026. Clearly, it wasn’t.

Coalition and Labor governments have tinkered at the edges of a solution because the real fix was too expensive, too difficult or too politically inconvenient. The threat always seemed so distant. Now the wolf is at the door.

When the smoke clears, the world will reorder its energy priorities, just as it did in the 1970s. Energy security will again become the central concern of governments everywhere.

The danger for Australia is that we learn the wrong lesson and waste this crisis. The early signs are disturbing.

The response now taking shape is to double down on an electricity system built on intermittent generation, backed by storage, in the belief that electrifying everything will deliver security. It will not. It risks replacing one vulnerability with another and building a single point of failure into the nation’s operating system.

If that system fails, everything fails with it. And maybe the people who are building this system should ponder whether it is wise that so many of the components in its nervous system are made in China.

There is a question almost no one in government or the bureaucracy seems willing to ask. What is the relationship between the kind of energy an economy uses and the productivity it can sustain?

For two centuries growth has been built on dense, reliable energy, first coal, then oil and gas. Now we are shifting towards sources that are diffuse and intermittent, and compensating with vast spending on storage, transmission and backup. That makes the system more complex, more expensive and less predictable.

Is it just coincidence that as this transition has gathered pace, productivity has stalled and costs have risen? Or is there a link we are refusing to confront?

Australia has a choice. It can use the advantages it has in coal, gas, uranium and, potentially, oil or it can squander them.

Yes, the world will become more efficient. Yes, more vehicles will be electric.

And yes, there is an opportunity to expand the mining of the critical minerals that underpin that shift.

But the immediate reality is that the world still runs on hydrocarbons and will for decades to come. With major suppliers of oil and gas shut down there is a clear opportunity for Australia to fill the gap, to strengthen our own economy, and to build security and resilience against future shocks.

We should be producing more energy, not less. We should be expanding exports of coal, LNG and uranium. We should be building nuclear power plants. We should be exploring for oil and developing the capacity to turn coal and gas into liquid fuels.

Above all, we should ensure that this country never again finds itself so exposed.

The lesson is not complicated. The world runs on the dense energy of oil, coal and gas. Ignore that, and the real world will blow up your operating model.

I was a bad student, but Les Roberts was a good teacher. I’d like him to know that, in at least one lesson, I was paying attention.

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This article was first published in The Australian

This was the first story I filed for Nine. At the time, my new bosses were a little bemused by it, but they humoured me.

I don’t claim credit for the insight. I was convinced by the power of an argument I had heard from a man I had come to know well, former fighter pilot and retired Air Vice-Marshal John Blackburn AO.

In 2014, Blackburn authored a report for the NRMA warning that Australia’s fuel reserves were running on empty. This fossil fuel–rich island nation had lost the capacity to produce and refine its own fuel. We were dangerously dependent on imports. Our reserves were wafer thin.

So thin that we were in breach of our obligations to the International Energy Agency.

We counted fuel on tankers at sea as part of our stockpile.

Nearly 90 per cent of the liquid fuel that kept this nation running came from overseas.

Even then, the picture was clear. We were dangerously exposed in a world that was becoming less stable.

Now the echo from the past is all too real. Today, that vulnerability is no longer theoretical.

The Third Gulf War has choked off the oil that feeds the Asian refineries supplying this nation with diesel, petrol and jet fuel. Prices have spiked. The threat of rationing is real. Parts of regional Australia are already running on empty.

We are hostage to long and fragile supply lines in a world now gripped by an energy war. Our economy depends on more than two massive tankers arriving on our shores every single day.

If that flow is disrupted, even briefly, the consequences will be dire. Oil and gas underpin the price of everything. When they rise, everything rises.

If supply stalls, road transport stops, shelves empty, and the economy collapses. This is a crisis we were warned about.

This is what a just-in-time nation looks like when time runs out.

So the question arises: will we learn the right lessons from this crisis?

The lesson is simple.

Fuel security is national security. We need to be far more self-sufficient in the fuels that keep this country running. We need to tap our vast resources of coal, oil and gas. We need to explore the possibilities of converting coal to liquid fuel. We need to explore for oil. We need more gas.

Otherwise, the next shock will not just test our economy. It will test our sovereignty.

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Few figures in history embody humanity’s maze of contradictions more starkly than German chemist Fritz Haber. He won the 1918 Nobel Prize in Chemistry for “making bread from air” and used the same skill to conjure poison gas and feed the machinery of war.

More than a million men were wounded by gas in World War I and it killed nearly 90,000.

Haber pioneered this diabolic slaughter in defiance of international agreements, overseeing the first large-scale use of chlorine gas on the Western Front at Ypres in 1915.

There was a personal toll. His wife, Clara, was also a chemist who was horrified by his work on chemical warfare. In the wake of his grim triumph at Ypres, she took his service pistol and shot herself.

Yet Haber also tackled one of humanity’s most enduring problems: famine.

The historic limit on crop yields was the availability of nitrogen. This essential element is abundant in the atmosphere but is locked in a form plants cannot use. Haber found a way to unlock it, forcing nitrogen to combine with hydrogen under heat and pressure to produce ammonia. The hydrogen comes from natural gas, which also provides the energy to drive the reaction.

The idea was industrialised by Carl Bosch and without the Haber-Bosch process billions would starve. Synthetic fertiliser cannot be made cheaply and at scale without fossil fuel. A century on, we still haven’t found a better way to feed the world.

In 2021 Sri Lanka conducted a demonstration of what not to do by banning chemical fertilisers in favour of organic farming. There followed the decimation of tea and rice crops, food shortages, soaring prices, riots, the resignation of the prime minister, a presidential apology and the abandonment of the fertiliser ban.

Synthetic fertiliser is just one example of where fossil fuel is buried so deep in the sinews of our civilisation that most people do not see it, just as most have no idea that the toothpaste they use and most of the medicines they take are petrochemical products. Oil is also the raw material for plastics, packaging, fabrics and thousands of other everyday products.

Politicians and activists talk as if energy systems can be easily unwound, but we are still bound to them in ways they barely understand. The modern world was built by fossil fuels, runs on them, and replacing them is not a choice we can simply will into existence. If it were easy, someone would already have done it.

Civilisation’s root-and-branch dependence on the continuous flow of hydrocarbons is why nations reeled when the Strait of Hormuz was shut down and, with it, one-fifth of the planet’s supply of oil and gas. The latest Gulf war is a rude awakening as the world of wishful thinking collides with the one we live in. This is the real energy transition, from having abundant, invisible supply to a vivid and punishing awareness of what scarcity might bring.

Australia’s governments are now terrified as they stare into the abyss of the damage a liquid fuel shortage could deliver. Shaken from their sleepwalk, leaders are beginning to understand how profoundly exposed we are. More than 90 per cent of our total energy consumption still comes from coal, oil and gas. Jet fuel, petrol and diesel dominate that mix. Diesel matters most as it drives agriculture, mining and transport, and if it runs out the nation will grind to a halt.

Successive governments have manufactured this scarcity and there is little the incumbents can do at the 11th hour beyond praying that the arteries of supply from Asia are not cut.

We sit at the end of long supply chains, and our energy security rests on an endless procession of ships ferrying oil, petrol, jet fuel and diesel. Every single day deliveries arrive on enormous, slow-moving tankers that creep across the oceans at a pace slower than a car edging through a school zone. Trips from refineries in Singapore and South Korea take between one to two weeks.

The major players in our market are Viva, Ampol, BP and Shell. Each has long-term contracts that secure these deliveries but Asian refineries cannot make fuel if they do not have oil. The risk is refineries run short of fuel to deliver and countries preference their own needs over exports. Talk of China halting shipments of jet fuel sent a shudder through our region.

The fuel shortage in regional Australia was triggered by its reliance on second-tier traders who get fuel from a spot market that dried up almost as soon as the first missile was fired at Iran. And it shouldn’t surprise politicians when some stampede to the bowsers to try to secure fuel when they wake up to the fact the government cannot guarantee it.

The longer the Strait of Hormuz is closed, and more damage is done to Middle Eastern oil infrastructure, the more pressure will build on refiners. The slow march of our fuel trade means there is a lag between a shock at the top of the supply chain and delivery to our market. If we hear of contracted cargoes not being loaded, it will signal that we are about to suffer real pain.

If the Albanese government gets that news, it will have to move to rationing well before our supplies begin to dwindle because we have so little fuel in reserve. There will be a hierarchy of priorities that will probably begin with supplying health and defence, then move to keeping the wheels of transport, agriculture and mining turning. Motorists present a big political problem because no government on Earth wants to suffer the consequences of what cutting their supply would mean. Our newly minted fuel tsar can do little beyond being a central point of contact in the crisis. We cannot distribute fuel we do not have.

For now, the supply ships are still sailing and one of the reasons we have cause to hope that will hold is because of our much-maligned trade in coal and liquefied natural gas. Our region relies on the fuels we ship to secure its energy security. We should be grateful that those who fight to end this trade have, so far, failed because if we undermine the security of those who make our liquid fuel, we cannot expect them to care about us.

Australia faces a witch’s brew of dilemmas, some beyond our control and others of our own making. The long-term danger is that we learn the wrong lessons from this crisis. The biggest mistake would be to believe there is a quick dismount from dependence on coal, oil and gas, and that electrifying everything will deliver energy security.

There seems to be a smug belief among electric vehicle owners that they will dodge any fuel crunch. That feeling may sour as their cars whirr on empty roads to deliver them first to empty supermarket shelves. There is no electric road train on the horizon that could swiftly replace our fleet of diesel trucks. The green hydrogen balloon has burst. There is no scalable replacement for making synthetic fertiliser or most of our medicine. We have yet to invent or scale up the industrial processes we will need to reach the mirage of a carbon-free world.

Our other dilemma is the American President. Remember all those stories fretting that Donald Trump was an isolationist? Would to God it was so. There is no ally on Earth that he has not insulted, few countries he hasn’t threatened, and the list of those he proposes to assault grows by the day. Cuba is the next cab off the rank.

Let’s list the Trump triumphs in the war against Iran so far. On the plus side of the ledger the despotic regime’s leadership has been culled and much of its war machinery damaged. But whoever believed it would fall or that the next supreme leader might not be worse than the last? And what is the incentive to stop fighting and open the Strait of Hormuz when Iran has demonstrated that is its nuclear option? The regime can now teach the world a lesson it will never forget, that an attack on Iran can shake every Western capital.

Continuing down the list of unintended, but not unexpected, consequences of this war, Iran is now selling more oil at a better price than before hostilities kicked off. Alarmed by rising prices at the pump in the US the Trump administration has eased restrictions on Russian oil. Moscow is raking in billions to help fund its war against Ukraine. China has been stockpiling oil for years in preparation for a potential conflict over Taiwan and Iran will continue to supply it as long as it can. Beijing is watching Washington exhaust its weapons inventories and shift assets from South Korea and Japan to the Gulf.

So, what does victory look like? How does Trump dismount? Marines are on their way to the Gulf. If the strait stays closed, they will be sent in and Tehran will have a single, narrow target on which to concentrate its fire.

If those forces move on Kharg Island, the terminal that handles most of Iran’s oil exports, they will be sitting on a hydrocarbon bomb. Would Iran’s mullahs hesitate to detonate it, sending body bags back to America and shockwaves through the global economy? Who can say.

The only certainty is that one day Trump will declare victory as he walks away from this mess, and that he will be as deserving of a Nobel prize as Fritz Haber.

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This article was first published in The Australian.

When oil and gas prices rise, the cost of living rises with them.

Australia is especially vulnerable because it still depends overwhelmingly on fossil fuels, particularly imported liquid fuels. Diesel keeps freight, farming and mining moving, and without it the country stops.

See more of Opinionated, on Sky News hosted by Danica De Giorgio.

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When a US nuclear submarine torpedoed an Iranian warship last week, the three Australians on board the American boat were reportedly ordered to their bunks.

This astonishing news nugget was unearthed by The Nightly’s Andrew Greene and the government has not denied it. We do not know whether our sailors were instructed to pull the doona over their heads, but Acting Defence Minister Pat Conroy did confirm that “they played absolutely no role in the offensive operation”.

It is hard to conjure a more perfect metaphor for Australia’s mindset in the face of grim realities: when the world gets rough, Australia reaches for the security blanket. We prefer the comfort of bedtime stories about international law, global order and middle-power potency to hard truths about real political and material power.

One of the Albanese government’s favourite fables is that the world is undergoing a rapid energy transition to cut carbon emissions. In this tale the shift from fossil fuels is swift, painless and profitable as the globe is saved from Armageddon by multinational wheels whirring in electric harmony. Hydrocarbons vanish as wind, solar and batteries power nations, electric vehicles hum through the streets and green industries sprout like flowers on the graves of dark satanic mills. Australia emerges as a clean energy superpower.

This story is echoed by a revolutionary guard of energy-illiterate politicians, bureaucrats, activists and subsidy-harvesting businesses. They are now on a unity ticket claiming the war-induced shortage of oil and gas proves Australia’s energy security lies in ditching fossil fuels and hitching our fortunes to the whims of the weather.

To believe this you have to ignore a basic truth: fossil fuels built the modern world and still sustain it. Wealth is energy converted into work. The more energy a society commands, the richer it becomes. The price of oil and gas underpins the price of everything.

Australia is rich in hydrocarbons and could shield itself from global shocks by exploiting the wealth beneath our feet. Instead our rulers have chosen to restrict the fuels that power our economy.

The irony is stark: the loudest voices warning about energy scarcity are the ones working hardest to create it.

The latest Gulf war is a brutal reminder of which fuels actually matter. This war is being waged by combatants who know that targeting energy sources cripples nations. Iran may be helpless to stop American and Israeli strikes but it can inflict worldwide pain by choking oil and gas supply through the Strait of Hormuz and bombing the regional infrastructure that keeps hydrocarbons moving: refineries, export terminals and fuel depots. This is now a global energy war.

Despite decades of talk about transition, the world still runs predominantly on oil, gas and coal. When the flow of those fuels slows, the consequences rip through the international economy.

Not convinced? Try this pop quiz.

After 20 years of “transitioning”, what percentage of Australia’s total energy demand do you reckon comes from fossil fuels and how much from wind, solar, hydropower and the egregiously named biofuels?

Primary energy is the best measure of how an economy actually runs because it counts all the fuels that power it, not just electricity generation. That matters because the things that keep the real economy moving, such as transport, mining and agriculture, run overwhelmingly on liquid fuels.

We do not have to guess at the numbers because they are reported by the government in Australian Energy Statistics under energy consumption.

“Fossil fuels (coal, oil and gas) accounted for 91 per cent of Australia’s primary energy mix in 2023-24,” the government website says. “Oil accounted for the largest share of Australia’s primary energy mix in 2023-24 at 41 per cent, followed by coal and gas both at 25 per cent. Renewable energy sources accounted for 9 per cent.”

To put this in perspective, the global primary energy mix is about 82 per cent fossil fuel dependent. So even by the hydrocarbon-guzzling standards of the world, Australia is unusually gluttonous and nowhere more so than in transport.

This is because we live in a huge, geographically dispersed nation where most of our goods travel by road.

This point was underscored in the final report of the 2020 Liquid Fuel Security Review.

“Liquid fuel is the backbone of the Australian economy,” the report says. “It underpins every aspect of our daily life, from our groceries to our commute to work and our emergency services. On average, each Australian uses nearly three times more energy from liquid fuel than they do from electricity.”

Given our heavy dependence on liquid fuel, and recognising that we live on an island, how much of our own oil do we produce and refine?

“Over the past two decades, our overall domestic production and reserves have been in decline,” the fuel security report says. “In today’s market, Australia imports over 90 per cent of the refined products and crude oil we need to meet our demand.”

About 80 per cent of the diesel, petrol and jet fuel here comes from refineries in Singapore and South Korea. Only about 20 per cent is produced at the country’s two remaining refineries in Brisbane and Geelong, and they rely largely on imported crude. It all arrives in a steady stream of about two tanker deliveries a day under long-term contracts, with prices typically benchmarked to the Singapore fuel market.

For now those supply chains are working. The pressure here has come from a surge in demand as bulk buyers, particularly in industries that depend on diesel, move to secure fuel. Major suppliers are prioritising contracted customers, but some independent wholesalers that relied heavily on the spot market have struggled as cargoes dried up.

The deeper risk is the reliance the Asian refineries have on Middle Eastern crude. If the source of oil fails or foreign governments prioritise domestic markets, existing contracts could be revoked. Some energy traders and refiners supplying other countries have already declared force majeure, the contractual clause that allows them to suspend deliveries when extraordinary events make them impossible.

Australia is profoundly exposed. Decisions made in other nations will determine our fate because we have deliberately chosen to become an energy vassal.

As this column was going to print, China, Australia’s biggest supplier of aviation fuel, has told oil refiners to halt exports. One thing is certain, countries will act in their own self interest.

Repeating the point that we live on an island, and these risks are obvious, surely we stockpile fuel? We do and the numbers are reported in the government’s minimum stockholding obligations. The last readout says we have 36 days’ worth of petrol, 32 of diesel and 29 days of jet fuel. This is a vanishingly small amount in reserve.

The world is now being reminded that the International Energy Agency was created after the oil shock of 1973 and its primary task was to build a buffer against supply disruptions. Australia is one of the IEA member states that signed an agreement that required each to hold oil stocks equivalent to at least 90 days of net imports. Australia has been in breach of this agreement since 2012. This column has been banging on about this, in several venues, since 2016, clearly with no effect. All political parties are responsible for where we find ourselves today.

The stockpile system was designed to cushion the world against sudden supply disruptions by releasing oil into the market during a crisis. Stabilising supply also helps prevent the kind of price spikes that can tip the global economy into recession. That is why there will now be a co-ordinated release of fuel from the member countries.

Proper energy security is a deeper problem and one no Australian government has ever been serious about tackling. We might get lucky this time, but one day our luck will run out.

You do not need much imagination to conjure a scenario where our fuel lifeline of supplies from Asian refineries is cut. That trade comes through the South China Sea. What do we imagine will happen to those supply lines if there is ever a war over Taiwan?

The longer the world’s supply of fuel is choked, the more the pain will grow. It will be measured here in inflation, not just in fuel prices but in every piece of road freight. All we can do is hope that The Gulf war ends soon and that this crisis is enough to spark some real change in our leaders’ approach to energy security.

Right now, depending on the day, the price of oil and gas rises and falls on the musings about the war made by the American President.

Stung by the domestic price rises, Donald Trump has said he will call the conflict to an end soonish. Interesting that he believes he can turn wars on and off and that those he attacks have no say in the matter. What if the survivors of the Iranian regime have no interest in shouldering arms?

The end of the despotic medieval mullahs’ tyranny over its citizens is devoutly to be wished, but it seems unlikely. And while Trump’s war aims meander, the Iranian regime has one crystal-clear goal: survival. The hangman’s noose tends to concentrate the mind.

If the only way Iran’s mullahs can inflict real pain on the US and the rest of the West is to push the globe into a recession, that is what they will do.

They can also focus all of their effort on a strait that lies just off their coast and is only about 33km wide at its narrowest point, with tanker traffic confined to shipping lanes about 3km wide in each direction. They do not even have to sink ships. The trade stopped when war risk insurance disappeared and tanker owners refused to sail.

Trump says the US will underwrite insurance and lead convoys with warships. If form is any guide that service will not come cheap. It is also doubtful he will want any Australian sailors on board.

This article was first published in The Australian

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The current Middle Eastern war underscores how the world really works and what fuels it runs on.

First, as Chairman Mao Zedong put it, “Political power grows out of the barrel of a gun.”

International law is a mirage that middle powers cite, evil powers exploit and superpowers honour in the breach. If you have the guns and are willing to shoot, you make the law. There is no international police force and no penalty for starting wars beyond the unimaginable consequences that flow from them and the high risk that you will shoot yourself in the foot.

Second, the world runs on hydrocarbons. This is also real power. The troika that delivers more than 80 per cent of the world’s primary energy is still coal, oil and gas. Energy security is essential and green energy an aspiration. With the war choking off one-fifth of the world’s supplies of oil and liquefied natural gas, the price of both has spiked. So has the price of coal because it can be substituted for gas in power production. If this persists for any length of time, the world will rediscover a brutal truth: energy shortages spread quickly from stalled tankers to inflation, industry and politics.

Europe has seen its natural gas prices surge by 70 per cent because it has decided it is best to import every molecule of the fuel that is essential to keep the lights on in its weather-dependent electricity system. To lose one gas supplier may be regarded as a misfortune; to lose two looks like carelessness.

First, Europe bet on the goodwill of a gangster in sourcing gas from Russia, then on enduring stability in the Middle East as it switched sources to Qatar.

Energy security is national security, and Europe is an energy vassal. That Australia is determined to mimic it is an act of supernatural stupidity.

In passing, let’s also add that Iran is specifically targeting energy infrastructure right across the Middle East as it lashes out in self-defence. Here it is following a playbook used by Russia in its war on Ukraine. This underlines the fact that despots understand what our government does not: energy is the economy. Cripple a nation’s power supply and everything else collapses. Note that no one is blowing up wind farms.

Finally, no one knows where this conflict will lead and there is every chance that 25 years from now we still will be kicking through the rubble, marvelling at what new horror has slithered out.

When God banished Satan from heaven in Paradise Lost, the Prince of Darkness simply set up shop in hell, determined for the rest of eternity: “To do aught good never will be our task, but ever to do ill our sole delight.” Humanity was collateral damage. Satan no doubt has welcomed Iran’s recently arrived supreme leader to Hades as a handy utility player on Team Damnation.

Working on a documentary marking the 30th anniversary of the election of the Howard government served as a timely reminder that wars bleed into each other.

The 2003 US-led coalition that deposed Iraqi dictator Saddam Hussein removed Iran’s main rival in the Persian Gulf and reshaped the region’s balance of power. Tehran exploited the vacuum by backing Shia militias in Iraq and expanding a network of proxy forces across the region, from Hezbollah in Lebanon to Hamas in Gaza and the Houthis in Yemen. This entire edifice was aimed at erasing Israel from the river to the sea.

No less an authority than Donald Trump agrees. At the February 2016 Republican debate in South Carolina, he called the Iraq war “a disgrace and an embarrassment”.

“I said it loud and clear,” Trump said. “ ‘You’ll destabilise the Middle East.’ That’s exactly what happened.”

There is no doubt John Howard sincerely believed the US and British intelligence assessment that Iraq possessed weapons of mass destruction when he committed Australian forces to the fight. In an interview with Sky News, former prime minister Malcolm Turnbull said the war was a massive mistake but defended Howard’s reasoning.

“John always had this view, rightly or wrongly, that the British had insights into the Middle East because of historical connections that were separate and, in some respects, better than those of the United States,” Turnbull said. “So, he was comforted by the assurances he was getting from London more than he was comforted by the assurances he was getting from Washington.”

The Iraq war was a case of imperial overreach that did great damage to the US domestically and internationally, and the consequences echo to this day.

But it should be remembered that president George W. Bush followed a long and public road to it. Congress authorised the invasion, the UN gave Iraq a final warning to comply with weapons inspections or face “serious consequences” and secretary of state Colin Powell made the case before the UN Security Council.

Howard believes his decision to support the US was right.

“I think both as a foreign policy decision, but also as an expression of our closeness to the United States,” he told Sky News. “I mean, we expected them in a pinch to help us, and although they didn’t physically need us, they wanted … a coalition of the willing.”

That coalition grew to 49 countries that supported the operation, though only a handful contributed combat troops. It is timely to remember that one of those countries was Denmark, which deployed a combat battalion to Basra and lost seven soldiers during four years of fighting.

Former foreign minister Alexander Downer believes “it was a great thing to get rid of Saddam Hussein”.

“I think that the counterfactual is the world would have been more unstable and worse with Saddam Hussein remaining in power, even though I can see the Americans handled the post-invasion period very, very badly,” Downer said.

That they did, and those errors linger to this day. Now there is another war to fix the problems left by the last and we are promised this one will go better, though no one in the Trump administration can say with any clarity what better looks like. Time will be the only judge.

We cannot foresee the future but we know this much: we live in a more uncertain world than the one we thought was enduring after World War II. In many ways it has returned to type: the powerful do as they will and the weak suffer as they must.

This world demands prudence and that is an enduring value that this era could learn from the Howard government.

It began with budget discipline. On day one of its tenure, treasurer Peter Costello discovered he had inherited an $11bn deficit, despite the Keating government insisting the books were in surplus. That shortfall was about 2 per cent of GDP. The government took out the razor, made tough choices and two budgets later delivered a surplus. With persistent surpluses, net debt was reduced from 18 per cent of GDP in 1996 to zero a decade later. For a few brief years the commonwealth was worth more than it owed.

Now the budget has a decade of deficits ahead of it and net debt stands at about $620bn, or roughly 21 per cent of GDP. We are in no fit state to deal with a crisis. Budget repair is a national security priority.

And the Howard government understood that defending a nation began with defending its borders. It took a hard line on illegal boat arrivals, insisting that control of Australia’s borders was not a matter of sentiment but sovereignty.

Those decisions were bitterly contested domestically at the time and deplored in the polite parlours of Europe and denounced in the UN. Now most nations understand that deciding who comes to a country and the circumstances in which they come is a bedrock function of the state.

Nations that cannot control their finances can’t afford to defend themselves. Nations that cannot defend their borders risk societal collapse. And energy-poor nations are just poor.

Watch John Howard: A Life in Politics on Wednesday 11 March at 7.30pm AEDT on Sky News. Stream at Skynews.com.au

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The childhood memory may be unreliable but it is vivid: a chalk inscrip­tion of a single word slashed on the pavement in Sydney – Eternity.

Our family was usually a long way from Sydney in the 1960s, traversing the country following my soldier father’s postings. But between 1964 and 1966 we were within striking distance, living on the outskirts of a then embryonic Canberra, just a five-hour drive from the Emerald City along an old Hume Highway that used to weave through every town.

My maternal grandmother lived in a Housing Commission home in Malabar on the edge of the eastern suburbs and we visited her twice: once to go to the Royal Easter Show and once for Christmas. We made several journeys into the city on green and cream double-decker buses.

Everything in Sydney seemed big, brash and vibrant. On one of those trips, I recall Nanna drawing our attention to the word Eternity chalked in fading, fluid copperplate on the pavement and passing on the lore that no one knew who the mysterious draftsman was or why he scrawled this one word everywhere.

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We do now. Illiterate reformed alcoholic and World War I veteran Arthur Stace converted to Christianity in the 1930s and spent the next 35 years writing the same word on walls and pavement in the hope that passers-by would turn their thoughts to heaven. Prosecuted in his day for defacing property, he was celebrated at the 2000 Olympics when Eternity lit up the Sydney Harbour Bridge.

Stace’s Sydney and the mark he left on it are long gone, eroded by the ruthless footfall of time.

These memories of an exciting, optimistic and vanished Australia came flooding back on Ash Wednesday. The news was awash with stories about Ramadan and the Chinese Lunar New Year while Lent barely rated a mention. All three of these events move with the moon, and surely this rare convergence was noteworthy.

Anthony Albanese, had posted a video for the Chinese Lunar New Year and released a statement to mark the beginning of Ramadan. Again, there was no word about Lent from our culturally Catholic leader. Perhaps he had boned up on the scripture readings of the day, which cautioned against pompous displays of piety. Perhaps he just forgot.

But forgetting, too, tells a story.

It is good that the Prime Minister offered his best wishes to the Chinese and Muslim Australian communities, but surely the most important season on the Christian calendar also rates a mention. It is the tolerance of the Western tradition we inherit, with its deep roots in Judeo-Christian beliefs, that allows all faiths, and none, to flourish here.

You can over-read these things, but it is easy to place this wilful forgetting within the canon of a creed that deems white settlement an irredeemable stain on the national soul. Yet the fault is not shared. The burden of guilt falls only on what we might call, borrowing an old colonial insult, the currency lads and lasses. These locally born children of settlers were seen as lesser beings than the British-born “sterling”. The crime of dispossession is thus laid solely at the feet of the descendants of the various waves of largely British, pre-World War II settlers. Later migrants enjoy a kind of automatic absolution, despite sharing fully in the benefits of colonisation.

This dismal doctrine of hereditary sin pervades our academic, bureaucratic and cultural institutions and stains our national discourse. It is a joyless, nihilistic cult with a discipline of endless penitence that is robbing us of hope. A once optimistic Australia seems trapped in a permanent Lent with no promise of Easter.

This caricature of our history is deeply damaging and our national story is sorely in need of resurrection. Former prime minister Tony Abbott has done the nation a great service in producing his short history of Australia, which does not shy away from the stains on our past but does seek to reclaim the good in it. And there is much good.

It is past time to redeem the stories and storytellers of the currency lads and lasses who built one of the fairest and freest nations on Earth. Among those storytellers was journalist and poet Kenneth Slessor. There is no one working in the media today who matches Slessor’s gift with words.

He was highly cultured, steeped in literature, and loved Sydney, warts and all. Save for a couple of “vexing intervals”, Slessor lived on the margins of Kings Cross for 40 years, with the harbour “never out of my window”. In a poem on the hidden virtues of a seedy William Street, his refrain is, “You find this ugly, I find it lovely.”

In an essay on the city he wrote: “The character and the life of Sydney are shaped continually and imperceptibly by the fingers of the Harbour, groping across the piers and jetties, clutching deeply into the hills, the water dyed a whole paint box’s armoury with every breath of air, every shift of light or shade, according to the tide, the clock, the weather and the state of the moon. The water is like silk, like pewter, like blood, like a leopard’s skin, and occasionally, merely like water.”

The harbour looms large and foreboding in his masterpiece Five Bells. The poem meditates on time and the death of his friend Joe Lynch, a tall, gaunt, red-headed “mad” Irish cartoonist.

One rainy Saturday night, Slessor and Lynch heard there was a party in Mosman and jumped on a ferry. Lynch had his coat pockets stuffed full of beer bottles and, when the wake of a big liner hit, Joe fell into the water near where the Sydney Opera House now stands and drowned. His body was never recovered.

In Five Bells, Slessor says time “moved by little fidget wheels is not my Time”. He recalls when time on the harbour was measured by the tolling of ships’ bells and says he has lived many lives, including this one life “Of Joe, long dead, who lives between five bells”.

He is haunted by the memory of his friend, who has gone from earth, “Gone even from the meaning of a name”.

“Yet something’s there, yet something forms its lips

“And hits and cries against the ports of space,

“Beating their sides to make its fury heard.”

I remember a lunch with renowned Australian artist John Olsen who, even in his 80s, radiated delight as he retold the story of discovering Five Bells and of finding an ageing Slessor playing pool at the Sydney Journalists’ Club. The poet and his poem inspired the mural Olsen was commissioned to create, which now sweeps across the Northern Foyer wall of the Sydney Opera House. An echo of Joe Lynch can be heard there.

The poet and the artist are both dead. The old Journalists’ Club is long gone. But their stories remain, for those who care to look.

Memory is a strange custodian. It preserves, it disturbs, it distorts, softens and erases. Without actively working to protect memories, they can fade, and a nation’s understanding of itself can blur.

But forgetfulness is never neutral. If we do not reclaim our past, others will decide what is remembered. It falls to us to beat against the ports of space to make our story heard.

Or, like chalk on concrete, what was once vivid will vanish.

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“There is little more infuriating to voters than to hear politicians tell them they have never had it so good when lived experience reflects the complete opposite.”
— Mike Newman

As a preamble, it is worth noting that the recent 0.25 per cent rate hike marks the first time ever that the Reserve Bank of Australia (RBA) has been forced to raise rates after only three cuts since systematic inflation targeting was introduced in 1990. Headline inflation is now set to rise to 4.2 per cent by June 2026.

Treasurer Jim Chalmers gaslit the public in typical fashion, blaming everything else for inflation. Never mind. He assured we minions that his government understands the pressure of rising interest rates on families and businesses. Damn that evil private sector demand driving inflation and forcing the RBA’s hand to initiate a 25-basis-point rate hike.

Even after Reserve Bank Governor Michele Bullock linked government spending to inflation, the Treasurer dug in over the weekend, claiming “public demand was making a smaller contribution, private demand a bigger contribution” to rising prices.

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It just wouldn’t be cricket to accept that his government’s spending is out of control. Over the past two years, Labor’s budgets have blown out to an all-time record of almost $100 billion. Hardly a rounding error. We do not need to dig too deep to discover gross mismanagement. Did the Treasurer forget that multiple federal departments were recently exposed for exceeding staffing budgets by $841 million in 2024–25?

Has it escaped Dr Chalmers’ attention that 21,000 new federal recruits (+5.6 per cent), coupled with average public-sector salaries costing an extra $3.54 billion per annum (+9.5 per cent more than in 2023–24), are adding fuel to the inflation fire? The total wage bill for federal government employees is now $41 billion—almost double the level before the pandemic. Nothing to see here.

Still, Labor politicians took the opportunity to heckle, scoff and jeer at the fractured opposition in parliament on February 3 instead of showing contrition for incompetent economic stewardship. Only the Coalition’s disarray could have managed to steal the limelight and allow Labor off the hook over such a disastrous state of affairs.

The factors behind inflation are not rocket science. Chief among them is energy. Energy prices jumped 21.5 per cent annualised in the fourth quarter of 2025. This impacts every input—from farming, transport and refrigeration to simply turning on the lights or the air-conditioning.

The Treasurer continues to indulge Energy Minister Chris Bowen, who regularly celebrates the success of his 200,000-plus home battery program. Never mind that the $2 billion originally slated for the scheme has blown out five-fold to $12 billion. That’s right: those who can afford home batteries are being subsidised by those who can’t. You cannot make this stuff up.

Focusing on cost of living for families?

Those with $1 million mortgages will be on the hook for another $1,800 per annum due to the interest-rate hike. If Dr Chalmers truly understands voter “pain”, why, on February 1, did he sneak in fuel and alcohol tax hikes if his aim is to assist battlers struggling to make ends meet?

Labor might argue it is committed to rolling out more “cost-of-living” relief, but that always equates to more of our own money raised through higher taxes, then recycled back to bail us out of problems we should never have been in if we had sensible energy policies.

The latest annual report from the Australian Energy Regulator (AER) reveals that average energy debt across residential customers suffering from energy poverty is up 19 per cent ($1,367) on 2024 levels, despite bill-relief rebates.

By the AER’s numbers, in 2020–21 there were 182,655 households in energy debt. In 2024–25, that figure has almost doubled to 336,615 households. Of the 122,000 households on official hardship programs, almost 40 per cent have been on them for more than a year. Of the 150,000 that exited the programs, 64.6 per cent were discontinued because households failed to meet agreed payment plans. For the cost of the Voice referendum, Labor could have paid off the $450 million in outstanding residential energy debt that exists today.

Switching to business

The impact of energy prices has hurt small businesses too. Average energy debt for businesses reached $2,516 in 2024–25, 40 per cent higher than in 2022. There are now 45,000 companies in energy debt over the same period—28 per cent more than when Labor took office.

Perhaps if the Treasurer truly grasped the corporate drivers of financial markets, he would understand that businesses do not invest solely on the basis of low interest rates. They invest because they can see the cycle ahead. Therein lies the problem. Australian companies cannot see favourable winds because of onerous regulatory frameworks. Why does a café in Victoria need 37 licences to open?

Net private business investment as a share of GDP languishes at just over 12 per cent—levels last seen around the severe 1990s recession. A decade ago, it sat comfortably between 14 and 18 per cent. Put another way, private enterprise sees mounting challenges because productivity growth has become so anaemic that the economy is red-lining and overheating at a puny 2 per cent.

If the private sector is driving inflation, why has the Australian Securities & Investments Commission recorded 14,722 insolvencies in 2024–25? Perhaps the Treasurer and Housing Minister Clare O’Neil—when she is not debating Senator Murray Watt on social media about the ranking of böreks, jam doughnuts and cinnamon rolls—can explain why 9,500 construction companies have collapsed since 2022, a 79 per cent jump since Labor won office. Why is almost 50 per cent of the cost of building a house now accounted for by government regulation and taxes?

This government’s obsession with spending and taxing more lies at the heart of the problem. Here is an idea: cut red tape. Reduce approval times. Consider an investor waiting up to 10 years for approval while simultaneously weighing capital allocation decisions. If that timeframe were reduced to 18 months, government would not need to spend a cent. Attractive policy settings would drive investment through ease of doing business. The departments advising ministers simply do not understand business—hardly surprising when the average tenure of top public servants is 28 years.

Not much hope overseas either

Having just returned from an overseas visit with a client, the prognosis is bleak. When government is indirectly told by a reputable third party that senior executives within the ministry of a major trading partner are “developing an Australian allergy”, one would hope this would trigger urgent self-reflection.

Instead, when investor feedback that “confidence is falling” was relayed to diplomatic outposts, the response was that the bilateral relationship has never been better. Officials pointed to regular consultations as proof. This carries about as much sincerity as telling a five-year-old that his favourite Tonka dump truck will be placed on a higher shelf—visible but out of reach—to encourage him to play with more climate-appropriate toys.

In any private business, damning feedback is treated not just as a warning but as an opportunity to fix problems quickly. Failure to do so risks lost profitability—or worse, collapse.

More disturbing was unsolicited commentary during a roundtable discussion. One trading outpost is actively pushing overseas investors to participate in smelting opportunities, especially those with green credentials. Forgive the confusion, but isn’t the government already spending billions to subsidise the survival—under the banner of energy transition—of once-profitable fossil-fuel-powered smelters such as Mount Isa Copper in Queensland, Tomago Aluminium Corporation in New South Wales, Nyrstar Port Pirie in South Australia, and Hobart Zinc in Tasmania?

Dig deeper and the futility becomes clear. Tomago is the largest electricity user in NSW, with a 904-megawatt peak load, consuming the equivalent of the entire Australian Capital Territory’s annual electricity use. Energy accounts for 40 per cent of its operating costs. Aluminium smelting requires temperatures of around 950°C during electrolysis. Due to grid instability, Tomago warned regulators almost a decade ago that while it could manage load-shedding with one hour’s notice, “catastrophic potline freezing” would occur if outages extended beyond three hours. In a 2017 letter to the NSW Energy Security Taskforce, Tomago stressed that “the early demise of baseload power generation only pushes up energy prices and represents a significant risk to the long-term viability of the smelter.” Climate zealotry has created precisely these conditions. Embarrassingly, taxpayers are now being used to flog a dead horse.

None of this is new. International investors across multiple industries continue to warn that Australia’s energy prices are simply too high to support competitive manufacturing. Add new workplace laws, productivity at six-decade lows, glacial approval processes, and investment-attractiveness scores worse than Zimbabwe, the Democratic Republic of Congo or Ivory Coast—and the mess becomes obvious.

Inflation is a problem. But inflated egos inside a party bathing in its own hubris have nemesis written all over them.

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It has been an uneasy summer in Australia after the Bondi massacre, and the year ahead shapes as a difficult one for the nation.

In the wake of the tragedy, the government flailed in its response and Prime Minister Anthony Albanese failed the test of leadership. But, showing an almost supernatural capacity for self-harm, the Opposition managed to make itself the story as it tore itself apart. Liberal Sussan Ley’s troubled tenure as party leader is now on life support and it will be a miracle if she makes it to Easter. Nationals leader David Littleproud has also been badly damaged. Meanwhile, the stocks of the right-wing populist party One Nation have surged, as voters toy with alternative forms of power.

Beyond its loss of authority over the handling of the massacre, the government is exposed for a runaway budget that is fuelling inflation and its absurdly expensive energy transition. It would be in deep strife if there were a half-way decent Opposition — but no such beast exists.

Let’s kick off February by looking at some of the energy stories that crossed the Powerlines desk over summer — because beneath the political noise, the real world is the real opposition to this government, as its policy idols are dashed on the rocks of physics and economics.

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Germany admits its energy transition is a train wreck

German Chancellor Friedrich Merz made headlines when he conceded the bleeding obvious: that shutting the country’s nuclear power plants had been a strategic mistake. But there were even larger admissions about the failed Energiewende (energy transition) in a speech to the German Chamber of Industry and Commerce in Dessau in mid-January.

I went in search of an English translation of this speech and could not find the detailed energy quotes, because the best material came in the question-and-answer session after the address.

Thanks to YouTube’s translation function, what follows are some of Merz’s most interesting observations. What is stark is that he says Germany is “undertaking the most expensive energy transition in the entire world”. He says he knows of no other country making things as difficult — perhaps because he is unaware of the yeoman efforts being performed down under by our Climate Change and Energy Minister, Chris Bowen.

More than once, Merz says Germany does not have enough “generation capacity”. This is a striking admission, because Germany has built nearly three times as much generation “capacity” as it once had — but of course most of it is wind and solar, which makes it worse than useless during Germany’s famed dark doldrums, the Dunkelflaute.

Capacity that cannot be switched on when it is needed is not capacity at all; it is incapacity. It appears that Merz has got the memo.

What Merz wants is dispatchable power and lower costs. He admits that subsidising energy is unsustainable, that high power prices are destroying Germany’s once-mighty manufacturing base and beggaring its people.

Germany’s example is not one that any rational nation would follow. But of course reason and physics do not drive this debate — the creed of climate alarm does.

Here are Merz’s most revealing quotes from the Q&A:

“One thing that needs solutions are our very high energy costs. In the long run we will not be able to subsidise them through tax revenue.”

“We need energy production capacities.”

“What we are seeing in Germany with heat pumps is one of the most expensive experiments being conducted in all of Europe. I believe we can do better.”

“Above all it is crucial that we now create the necessary energy generation capacities. I just mentioned the power plant strategy. The difference between our power plant strategy and the one planned by the previous government is that we can now build gas-fired power plants without having to make them hydrogen-capable from day one. We don’t have the hydrogen.”

“I want to have acceptable market prices for energy production again and not have permanent subsidies for energy prices from the federal budget.”

“I want to say it again. It was a serious strategic mistake to phase out nuclear energy. If you are going to do it, you should at least have left the last remaining nuclear power plants on the grid three years ago so you could retain the generation capacity we had. We are now undertaking the most expensive energy transition in the entire world. I know of no other country that makes things as difficult and expensive as Germany. We inherited something that now needs correcting, but we simply don’t have enough generation capacity.”

“Of course we need the wind and the sun, but there are also days and weeks when the sun doesn’t shine and the wind doesn’t blow — and then we need baseload energy generation. That is precisely our goal, and we want to achieve that quickly.”

Electricity Is Physics, Not Politics

In an important opinion piece in the the Australian Financial Review, Stephen Anthony — director of Macroeconomics Advisory and former chair of the National Disability Insurance Scheme Independent Pricing Committee — argues Australia’s electricity system has drifted away from the physical fundamentals that make grids work. He emphasises that:

“Electricity is not a policy construct. It is physics — and the physics have not changed since Michael Faraday and the steam engine.”

The core message is that policy must be grounded in how electricity systems actually operate, not abstract targets.

Anthony warns that two decades of prioritising weather-dependent generation has left the system neither cheap nor secure. Renewables require extensive transmission, storage and backup to maintain reliability, and planners have underappreciated the engineering challenge of matching supply and demand continuously. His critique is as much about modelling and markets as emissions goals: without firm capacity and proper incentives, reliability and cost outcomes will be poor.

He calls for a reset in 2026 that realigns energy policy with the first principles of system design — recognising that supply must be dependable, grid stability must be engineered, and the transition must balance emissions, reliability and cost.

In 2019 Anthony and Professor Alex Coram co-authored an outstanding report for Industry Super Australia Modernising Australia’s Energy Systems where they point out an electricity system is a physical machine, not a spreadsheet exercise. Power has to be produced at the right moment, delivered through a stable grid, and backed up when things fail. You can’t modernise a system like that by comparing headline costs of individual technologies and hoping the rest will sort itself out. Generation, transmission, storage and demand all have to work together over decades, because once you build this stuff you are stuck with it for a very long time.

A wind-, solar- and battery-heavy grid looks cheap only if you examine technologies in isolation. When you step back and look at the whole system, they argue it becomes capital-hungry and operationally complex. You must overbuild generation, add long-distance transmission, install large amounts of storage, and still keep dispatchable backup for when the weather fails. Batteries help smooth short gaps, but they don’t solve multi-day or seasonal shortages. The authors’ key point is that a renewables-dominated grid shifts risk from fuel costs to system risk — reliability, coordination failure and the danger of locking in ever-rising capital costs — whereas nuclear shifts risk upfront but stabilises the system over time.

Their conclusion is not “nuclear versus renewables”, but that excluding nuclear forces the system to do far more work, at higher risk, to achieve the same reliability. In their framework, nuclear is valuable precisely because it lowers the burden placed on everything else.

Minister blocks FOI on renewables deal

Environment Minister Murray Watt’s office has declined a Freedom of Information request seeking documents on a Victorian solar and wind farm agreement, claiming disclosure would harm Commonwealth–state relations.

The rationale is absurd and undermines the principle of transparency in major energy approvals.

This is not a technical exemption; it is a political choice with broader implications for public trust in energy planning. Blocking access to basic approval justifications for federal–state collaboration sets a worrying precedent, especially at a time when energy policy decisions carry enormous economic and strategic weight.

Of course, there is no intention to have any transparancy in the enery transition and burying body bags full of facts and costs is now and industrial exercise.

Bowen to lecture the Saudis about oil

Australian energy minister and “president of negotiations for COP31”, Chris Bowen, has signalled he plans to engage Saudi Arabia and others in an effort to stop them hindering “progress” at UN climate summits.

Bowen singled out the oil-rich Gulf state, long accused of obstructing efforts to accelerate the phase-out of fossil fuels.

“We won’t get anywhere if we just have a jamboree of the willing,” Bowen said.

Oh to be a fly on the wall for these conversations. One suspects the Saudis might point to Australia’s exports of coal and gas as an inconvenient truth, and watching Bowen unleash one of his signature word-torrents in response would be a marvel to behold.

The language tango is Bowen’s great gift. Verbal missteps are all part of the great dance between the real world and the imaginary one he wants us to join him in. Who can forget his 2022 pledge to cut retail power bills, only for Australian taxpayers to cough up $6.8 billion in subsidies as electricity prices soared. In the tounge tango that followed the subsidies were branded as a cost of living triumph and proof that power prices were… falling

In 2023, Bowen told the council of parties meeting hosted in Saudi Arabia that fossil fuels must have “no ongoing role to play in our energy systems”. Yet the weather-dependent grid he is building cannot function without dispatchable power, and he is now desperately seeking gas while coal-fired power plants have their lives repeatedly extended. No matter how much the music changes the dancer blunders on.

With domestic and international roles this year Bowen will be dancing between landmines at home and abroad. It will be quite a show and Powerlines looks forward to writing the reviews.

The Productivity Commission joins the activist chorus

The headline act in Australia’s bureaucracy-wide institutional collapse came on December 19 with the release of the Productivity Commission’s Orwellian-titled Investing in cheaper, cleaner energy and the net zero transformation.

The demonstrably false slogan on the cover reveals the document for what it is: activism dressed up as economics. Powerlines has already dissected that report in detail in an earlier post.

Australian Aluminium Finishing collapses

Australian Aluminium Finishing (AAF), a Sydney-based architectural aluminium finisher operating for more than 40 years, is expected to enter liquidation by mid-February after collapsing under more than $18 million in debt.

The company went into voluntary administration on January 7 and has not traded since. Escalating costs — particularly electricity — are cited by workers and administrators as a major pressure, though filings make clear this was not the sole cause.

AAF operated plants in Brisbane, Sydney and Melbourne, along with 11 production facilities across Australia and South-East Asia. It is headquartered in Wetherill Park and owned by Australian Aluminium Holdings, with William Anthony Wyllie as sole director. The administrator has flagged a formal investigation into the company’s failure, while chemical supplier Alpha Chemicals has sought a court-ordered winding-up.

UNSW finds solar panels fail faster than promised

A University of NSW-led study has found that up to 20 per cent of solar panels in large-scale photovoltaic plants degrade far faster than expected, in some cases cutting effective operating life to around 11 years rather than the assumed 25.

The research identifies a “long-tail” problem in solar deployments, where a minority of panels suffer severe and premature performance losses that materially drag down overall system output. Using a large dataset from the US National Renewable Energy Laboratory, the study concludes this effect is structural, not incidental.

Researchers identify three pathways: accelerated degradation driven by interacting failure mechanisms; early-life “infant mortality” caused by manufacturing defects; and random late-life failures such as solder fatigue or cell cracking.

The findings have serious implications for investment models, warranties, insurance and recycling planning — and undermine the comforting fiction that solar is a predictable, plug-and-play 25-year asset.

Funke Kupper: beyond 2050, nuclear matters

Writing in the Australian Financial Review, former ASX and Tabcorp chief Elmer Funke Kupper argues that Australia’s energy policy is distorted by an overly narrow focus on 2030 and 2050 targets, which favour renewables on paper while ignoring long-term system costs and reliability risk.

He accepts the CSIRO/AEMO GenCost conclusion that renewables look cheapest at a 2050 snapshot, but argues this breaks down once asset lifetimes are considered. Solar, wind and batteries must be rebuilt every 25–30 years, while nuclear plants can operate for many decades.

Over a 75-year horizon, he argues, a mixed renewables-nuclear system is cost-competitive and materially lower risk. Without it, Australia risks de-industrialisation as energy-intensive industries lose confidence in long-term power security.

Trump pulls the US out of the UN climate framework

Donald Trump has ordered the United States to withdraw from dozens of international and UN-affiliated bodies, arguing they operate against US national interests.

The decision includes exiting the UN Framework Convention on Climate Change — the parent treaty to the Paris Agreement — making the US the first country to leave it. The White House says the move is part of a broader review aimed at ending funding for “globalist” and ineffective institutions.

Meta goes nuclear to power AI

Meta has announced a major expansion of its nuclear energy commitments, striking agreements with Vistra, TerraPower and Oklo, following an earlier deal with Constellation Energy.

The deals make Meta one of the largest corporate purchasers of nuclear power in US history, aimed at securing clean, firm electricity for its rapidly expanding data-centre and AI infrastructure.

South Australia price spike exposes grid fragility

The Advertiser reported on January 28 that a sharp electricity price surge in South Australia — with wholesale prices spiking close to the $20,000/MWh cap — triggered warnings of catastrophic grid failure during a multi-city heatwave.

The spike occurred on a still summer evening when household batteries were depleted and wind generation fell, prompting a low-reserve notice from AEMO.

Frontier Economics chief Danny Price warned the system is becoming more fragile as coal exits faster than firm replacement arrives. He said it is only a matter of time before a multi-day, multi-state heatwave exposes the system’s weaknesses through outages and extreme prices.

Dispatchable power is non-negotiable.

Again in the Australian Financial Review, Patrick Gibbons — a former Tehran-based diplomat and now a partner at corporate advisory firm Orizontas — argues that the energy and climate debate is shifting as hard demand collides with soft assumptions. When BlackRock chief Larry Fink openly warns at Davos that data centres and artificial intelligence cannot run on intermittent wind and solar alone, it signals what power-sector insiders have long known: dispatchable power is non-negotiable.

“You cannot rely solely on intermittent sources like wind and solar. You need dispatchable power because these data centres cannot simply turn on and off.”
— Larry Fink, CEO of BlackRock, the world’s largest asset manager

This matters acutely for Australia, where electricity demand — long stagnant — is now rising again, driven by data centres and the political imperative to preserve what remains of the industrial base.

Gibbons notes that for two decades Australia absorbed coal closures because demand was flat, manufacturing declined, and rooftop solar suppressed daytime load. That era is over. Electricity consumption has risen by about 7 per cent in four years and is set to accelerate. At the same time, the energy transition is slowing: coal plant closures are being pushed back, transmission build-outs downgraded as costs surge, and wholesale price volatility has increased even as average prices plateau — volatility that flows directly into higher retail prices as risk is priced in. The long-promised cheap power has not materialised, not simply because of Ukraine-driven fuel shocks, but because of the real system costs of integrating large volumes of renewables.

The political response is already visible. Governments are extending coal plants across Queensland, NSW, Victoria and Western Australia, backing aluminium smelters such as Tomago, and quietly acknowledging that gas will be required to replace ageing coal — even as state policies restrict new gas supply. Data centres now enter this mix, with governments spruiking digital ambition while remaining vague about where the electricity will come from. Gibbons’ conclusion is blunt: power prices will continue to rise, coal will stay longer than planned, and the energy transition is about to get messy. Larry Fink is right — dispatchable power is essential — and in Australia that reality arrives well before nuclear even enters the conversation.

Australia’s agencies of state have become a danger to the Commonwealth. Instead of acting as a handbrake on bad ideas, they share the delusion that government fiats on energy can override physics, conjure cheap power and invent new industries.

These institutions inhabit a model world, where real-world hikes in retail power bills, the hollowing-out of industry and the growing risk of blackouts are dismissed as trivial, anecdotal or transient. Evidence is an inconvenience to be explained away as bureaucrats recast themselves as co-authors of a modern morality play.

Worse, the blizzard of government publications produced in 2025 does not even cohere into a single, consistent whole. A survey of the past year’s documents on the energy transition, churned out by some of the world’s highest-paid bureaucrats, delivers a cacophony of confusion. Outdated information is embedded in new advice, assumptions grow ever more heroic, and mantras masquerade as policy.

The essential purpose of the grid, delivering secure, reliable and affordable power, has been relegated in pursuit of the ideological goal of cutting carbon emissions. Once the core function of a system is perverted, everything that depends on it begins to fail. Prices rise and reliability erodes as policy drifts into fantasy, sustained by the conviction that everything is justified by the cause of saving the planet.

The architects of this disaster appear not to understand that they are conducting surgery on the nation’s central nervous system. Get this wrong and the damage is catastrophic and permanent. And this is only the beginning: electricity is merely the first stop on the road to a much broader and more destructive dismantling of the energy system.

This is not a dispute about climate change or the demand to cut emissions. It is about whether the Australian state understands the physical system it is attempting to command, and whether it grasps that what it is doing will depower the economy, drive up costs across the board and place the nation on a path to poverty.

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Study last year’s blizzard of official advice underpinning Australia’s emissions target and it is littered with glaring errors, deliberate sins of omission and fragmentation, as old assumptions are preferred over real-world limitations.

Start with the Australian Energy Market Operator. AEMO’s Integrated System Plans are the sacred text on which the mantra of the “least-cost” path to a decarbonised grid rests. Let’s be clear, these documents are explicitly about hitting government-decreed carbon-cutting targets, not delivering cheap, abundant energy. The 2024 ISP assumed rapid coal exit, an unprecedented build-out of renewables, firming and transmission, and smooth delivery across multiple states. Ministers cite it. Regulators lean on it. Every other agency inherits it.

Then, in August last year, AEMO began rewriting it.

In its Electricity Network Options report, AEMO admitted that transmission costs had surged, in some cases by up to 100 per cent, driven by supply-chain constraints, labour shortages, project complexity, social-licence issues and rising contracting risk.

It made this admission:

“AEMO recognises that increases in costs for electricity transmission network development would impact bills for electricity consumers.”

The message was clear: the 2024 “optimal development path” was no longer reliable and would be rewritten in the 2026 draft Integrated System Plan. That should have triggered a pause across government. Instead, the machine chugged on as it prepared for the September release of the 2035 emissions target.

The Climate Change Authority’s advice that Australia should cut emissions by 62–70 per cent below 2005 levels by 2035 is explicitly anchored to the central scenario in AEMO’s 2024 ISP. That pathway assumes coal-fired generation largely exits the system by the late 2030s, and that replacement renewables, firming and transmission are delivered on time and at scale.

“Scaling up capacity in the National Electricity Market (NEM), including six-fold growth in utility storage, quadrupling wind capacity, tripling utility solar capacity and doubling rooftop and distributed solar capacity by 2035, consistent with the Australian Energy Market Operator’s (AEMO’s) Step Change scenario,” the report says.

But the Authority was leaning on a grid plan the system operator had already flagged for revision. When that revision arrived, in December’s draft 2026 ISP, coal’s exit was pushed back by a decade, with closures no longer smooth or front-loaded but slower, lumpier and far more dependent on announced retirements rather than modelling ambition. Transmission delivery was treated with greater caution. Workforce constraints, supply-chain delays, social-licence barriers and system-security risks were elevated from footnotes to central planning assumptions.

The certainty that underpinned the 2024 Step Change pathway, and on which the Authority based its advice, had evaporated. That is not a minor technical adjustment. It goes to the credibility of the entire advice chain on which the government’s 2035 target rests.

And, as Powerlines has pointed out in an earlier post, AEMO has yet to revise its outdated assumptions on worst-case wind droughts. The critical generation gap in the 2024 ISP was identified by Queensland-based Global Power Energy, a specialist consultancy whose 15-strong leadership team has more than 400 years of combined technical, regulatory and commercial experience across generators, networks and the market operator.

The eastern grid is being built on an AEMO model that assumes wind power will never fall below 14 per cent of capacity for multiple days. Yet a GPE study of the real-world 2024 autumn wind drought shows wind collapsing to roughly half that level during three separate week-long slumps, raising serious questions about whether a weather-dependent grid can keep the lights on.

When Treasury rolled out its modelling of the net-zero transition, it assumed decarbonisation of the electricity sector would proceed “consistent with recent trends and the (outdated) ISP”. It does warn that a disorderly transition would drive up wholesale prices and undermine investment. But the disorder it imagines is political. The disorder now confronting Australia is structural.

So Treasury is no longer stress-testing policy. It is amplifying error and manufacturing reassurance. And when the nation’s most important economic agency starts publishing comfort fiction for government instead of confronting reality, it betrays its heritage and the community it is meant to serve.

The headline act in this bureaucracy-wide institutional collapse came with the December 19 release of the Productivity Commission’s Orwellian-titled Investing in cheaper, cleaner energy and the net zero transformation. That demonstrably false slogan reveals the document for what it is: activism dressed up as economics.

The Productivity Commission was established to be a guardian of economic rationalism, providing governments with independent, evidence-based analysis to enhance productivity and economic welfare, not to act as a cheerleader for political objectives. Its legitimacy rested on its willingness to pull bad policy apart, test assumptions and champion markets.

All pretence of that evaporates here. The opening paragraph declares, without qualification, that “reducing emissions from greenhouse gases is an important national priority”. There it is: the cart of net-zero ideology placed firmly ahead of the horse of productivity.

From that point on, the conclusions are foregone. Markets are no longer trusted. Capital allocation is no longer disciplined by price signals. When the sole goal is to nail down a carbon target, everything is hit with the hammer of government intervention. An institution created to interrogate political ambition has instead absorbed it, transforming itself from devil’s advocate into preacher.

One recommendation is to accelerate the closure of coal-fired power stations by expanding and repurposing the Safeguard Mechanism, shifting from a sector-wide approach to facility-level emissions constraints, tightening the screws until coal generators are squeezed out, starting with brown coal in Victoria and moving on to black coal in NSW and Queensland.

This is not productivity reform. It is environmental activism by regulatory attrition.

The Commission claims faster decarbonisation will reduce the overall cost of the transition, while ignoring the constraints AEMO flags in its 2026 draft plan. It assumes gigawatts of reliable power can be conjured on demand and that the known risks of premature coal closure, price spikes, reliability failures and rising system-security costs, can be waved away.

The report’s superficiality is striking. It advocates a rapid build-out of renewables and transmission as markets struggle to meet existing targets. It favours large-scale wind even as private capital retreats due to rising costs, planning delays and community opposition.

Reliability is treated narrowly, with scant regard for system security. Coal closures require extensive stabilisation infrastructure, synchronous condensers with lead times of four to five years and price tags approaching $160 million each. Transgrid alone plans around ten in NSW by 2030. This barely registers in the Commission’s analysis.

The Commission also urges fast-tracking approvals by privileging the energy transition over biodiversity, heritage and community objections. It proposes a federal strike team and coordinator-general to bulldoze resistance. It calls for expanding the Safeguard Mechanism by lowering thresholds to 25,000 tonnes, dragging hundreds more businesses into carbon compliance.

More costs. More intervention. How does any of this improve productivity?

Now consider the reports from all these agencies alongside the draft 2026 ISP. What matters is not a single number but the tone. Where 2024 was confident, the draft is hedged and conditional. It flags workforce shortages, long lead times, higher costs, social-licence barriers and sequencing risk. Caveats multiply.

This is how engineers write when they are no longer confident the system can be bent to a timetable.

Politically and institutionally, however, the language has hardened. Targets are higher. Regulatory pressure is intensifying. The insistence that the transition will be “orderly” grows louder even as disorder spreads.

AEMO revises its assumptions. Other agencies build their case on the old ones. The Productivity Commission abandons markets in favour of coercion. Each institution amplifies error. Collectively, they appear to believe their policy prescriptions can dominate physics.

The only glue binding this together is ideology, the belief that net zero by 2050 is paramount and the real world will comply if pushed hard enough.

All this for what?

Australia produces around one per cent of global emissions. China produces roughly 30 per cent and continues building coal-fired power stations to guarantee energy security, industrial dominance and political stability. Coal is a strategic asset baked into China’s future.

Australia, meanwhile, is destabilising its electricity system, driving up costs and hollowing out energy-intensive industries. Next comes the push to torch the billions in export income that comes from coal and LNG in exchange for hypothetical green industries. Then we will impose more costs on transport and agriculture.

This is not climate leadership. It is unilateral economic disarmament and an act of deliberate self harm.

Reality will not bend to ideology. It never does. And the longer Canberra pretends otherwise, the higher the price Australians will pay, in bills, reliability and lost industrial capacity.

This is institutional betrayal.

As with the electricity system itself, the bureaucracy has lost sight of its purpose. Once that happens, everything that depends on it begins to fail. Agencies meant to test ideas, restrain excess and ground policy in reality have instead become ideological amplifiers. When the state forgets its obligations to the community, to security, prosperity and resilience, it ceases to be a steward of the Commonwealth and becomes a risk to it.

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In 2003, I visited the Auschwitz concentration camp. As a father of a three-year-old daughter at the time, among the thousands of family pictures, one of a similarly aged Renia Kohn brought me to tears and, 22 years later, still does. Much like Matilda, she was murdered simply for the crime of being Jewish.

Prime Minister Albanese’s “love is more powerful than hate” comment proved beyond all reasonable doubt that he is unfit to lead this nation. If his government’s failures everywhere else weren’t bad enough, his insincere platitudes with respect to the Bondi massacre and subsequent responses only confirmed his trademark as an appeaser. His lack of authenticity during this crisis has been exposed for all to see.

The jeers directed towards him at Bondi outwardly expressed the mood of a nation tired of his government’s political cowardice. The Jewish community only invited Albanese to the eighth day of Hanukkah out of respect for the office. The fact he was given no speaking role, despite his offering, speaks volumes, sending a not-so-subtle message by shining light on the darkness he has presided over.

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Bondi has tragically exposed what happens when political expediency is put ahead of principle. The Albanese government has spent its time in office ideologically prioritising virtue ahead of values.

The fact Albanese refuses to call a Commonwealth Royal Commission into the worst radical Islamic terrorist attack on Australian soil reveals two things: contempt for Australians, especially the Jewish community, and a shameless attempt to bury scrutiny surrounding the systematic failures by his government that would surely be exposed by it.

While Albanese can reflect that he “could have done more” to protect the Jewish community, the following data reveals just how much antisemitism he chose to turn a blind eye to on his watch. This has been a pogrom.

The Executive Council of Australian Jewry (ECAJ), Australia’s peak Jewish representative body, documented more than 3,700 antisemitic incidents in the two years following October 7, 2023, a rate five times higher than the decade prior to the massacre in Israel.

2023

October 8 – Sydney Opera House: pro-Palestinian protesters chant “Where are the Jews?”, “F**k the Jews”, and “Gas the Jews”.

October 8 – In Western Sydney, Sheikh Ibrahim Dadoun addressed a large protest rally glorifying the October 7 massacre, shouting to the crowd: “I’m elated. It’s a day of courage, it’s a day of resistance, it’s a day of pride, it’s a day of victory.” Prime Minister Albanese attended the National Iftar Dinner hosted by the Australian National Imams Council (ANIC) in early 2023, where Dadoun gave the vote of thanks and closing prayer.

October 8 – Two individuals walked past a New South Wales synagogue, shouted “Allahu Akbar”, and threatened to “blow up the synagogue”.

October 9 – A 44-year-old Jewish man in Sydney called a “Jew dog” and assaulted in a public park, sustaining concussion and spinal fracture.

October 11 – Melbourne synagogue receives a bomb threat.

November 23 – A large mob of anti-Israel protesters descended on a Melbourne synagogue, rioting and throwing rocks, forcing evacuation by worshippers.

December – Multiple bomb threats made to synagogues across Australia.

2024

January – Foreign Minister Penny Wong visits Israel and other Middle East states but does not visit sites where the October 7 massacres took place. Co-Chief Executive Officer of the Executive Council of Australian Jewry, Alex Ryvchin, stated her actions were “a serious error of judgment” and that a visit to the sites was “essential to understanding the depth of evil that Israel faces”. Albanese defended Wong, saying her visit was “not about an opportunity for a photo op”. In December 2025, Wong said, “I regret how people perceived the situation”.

March 15 – Australian government lifts suspension on $6 million in funding for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), a group that aided and abetted Hamas terrorists.

May – Jews attending the “Never Again Is Now” anti-antisemitism rally in Melbourne physically assaulted by anti-Israel mobs.

May 25 – Australia’s largest Jewish school in Melbourne graffitied with hate speech.

July 4 – Free Palestine protesters breach Australian Parliament House security in Canberra and hold banners from the rooftop.

October 13 – Antisemitic graffiti reading “Be careful” sprayed on a Jewish bakery in Sydney.

October 17 and 20 – Bondi-based Curly Lewis Brewing Company torched by mistake. The intended target was the Jewish-owned kosher deli Lewis’ Continental Kitchen next door, which was attacked three days later.

October 24 – Albanese alights from his government jet wearing a Joy Division T-shirt, the name given to the sexual slavery wings in Nazi concentration camps, in full knowledge of its meaning.

November 19 and 21 – Cars set on fire and buildings vandalised with “F**k Israel” in a Jewish neighbourhood in Sydney.

November – Melbourne synagogue defaced with “Free Gaza” and “Jews kill babies”.

December 5 – The Great Synagogue in Sydney besieged by unauthorised anti-Israel protesters, forcing Jews to shelter inside.

December 6 – Adass Israel Synagogue in Melbourne set ablaze in an arson attack.

December 9 – Australian Federal Police launch a dedicated antisemitism taskforce under Special Operation Avalite.

December 11 – Suburb of Woollahra in Sydney attacked again. Cars set on fire and buildings vandalised with misspelled slogans including “Kill Israiel”.

2025

January 4 and 7 – Man threatens worshippers exiting Chabad North Shore and Kehillat Masada synagogues in St Ives.

January 10 – Allawah Synagogue in southern Sydney vandalised with swastikas and “Hitler on top” graffiti.

January 11 – Newtown Synagogue vandalised with swastikas; arson attempt made after accelerant poured but fire failed to fully ignite.

January 15 – Multiple cars firebombed. “F**k the Jews” spray-painted on a car. Jewish home splashed with paint in Dover Heights, Sydney.

January 21 – Jewish childcare centre in Maroubra, Sydney, set on fire and vandalised.

February 12 – Two Sydney nurses suspended after declaring on social media that they would murder Jewish patients inside a New South Wales public hospital.

July 4 – Twenty people attending a Shabbat dinner at East Melbourne Synagogue targeted in an arson attack.

July 5 – Synagogue door set alight; Israeli restaurant stormed by protesters in Sydney.

August – Pig’s leg thrown into kosher establishment in Waverley, Sydney.

August 3 – Palestinian march across the Sydney Harbour Bridge featuring Taliban, Islamic State, Hezbollah, Al Qaeda and Hamas flags, images of Ayatollah Khamenei, chants of “Death, death to the IDF”, and burning of Australian flags.

August 10 – Prime Minister Albanese announces Australia will recognise the State of Palestine at the 80th United Nations General Assembly.

August 26 – The Australian Security Intelligence Organisation (ASIO) determines Iran was behind the Adass Israel Synagogue and Lewis’ Continental Kitchen arson attacks.

September 7 – Ehtesham Ahmad rides an Arabian horse along Bondi Beach while waving a Palestinian flag.

September 21 – Formal recognition of Palestinian statehood by Australia.

December 1 – A 71-year-old woman arrested for antisemitic graffiti in Sydney’s eastern suburbs.

December 14 – Mass shooting at the Bondi Beach Hanukkah festival claims the lives of 15 innocent civilians, including Matilda, a 10-year-old child, and injures more than 40 others.

What more evidence did Albanese require to take firmer action?

One day before the Bondi massacre, I had breakfast with a close Jewish friend. We had been flatmates during our time at university. He told me just how unsafe his community had been feeling and that the authorities were doing so little to stem growing antisemitism.

He had been celebrating Hanukkah at another location with other members of his local synagogue, and it was ordered to be closed immediately after the attack in Bondi commenced.

Unfortunately, for a man who has been behind so much division, Australians must not accept his dilemma of “how hard it is to legislate” against such evil by wrapping it in tighter gun controls, further limits on free speech, and dragging in extreme-right actors as a deflection. Had the vile attack been carried out with a vehicle ploughing into victims, would the government be seeking to toughen car licensing laws? We must not allow Albanese to obfuscate.

As of December 2025, Australia lists 31 terrorist organisations under the Criminal Code, of which 27 are Islamic, three far-right, and one ideological. Australian Security Intelligence Organisation Director-General Mike Burgess has consistently stated in official briefings that “religiously motivated violent extremists remain the majority of ASIO’s counter-terrorism caseload… to be clear, I am talking about individuals who follow a perverse interpretation of Islam, not people of Islamic faith”.

Bondi hero Ahmed al-Ahmed embodied courage under fire and deserves our highest praise. Boris and Sofia Gurman showed equal strength in their attempt to thwart the massacre despite their tragic fate. Countless first responders and others should hold their heads high for their selfless acts, despite being uniformly let down by a government seeking not to offend certain radical groups due to the insidious poison of political correctness.

This is not a time for politics but a clarion call for real leadership to enshrine shared values that ensure all Australians never again have to experience such an atrocity. If our government refuses to accept accountability, Australians must vote with their feet and rid themselves of those who lack the courage to do the right thing.

It is time to reflect on the pictures of beauty personified in Matilda and Renia Kohn and take remedial action against the scourge of ideological and religious hatred that ended their lives before it is too late.

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The beach is soaked in blood no tide will wash away, and among the dead lies a child with that most Australian of names: Matilda.

Her murder, along with 14 other souls, stains the Bondi sand and our nation. The horror lies in knowing this was no senseless slaughter of innocents. This was a cold, calculated assault on a ­people whose only crime was their ­religion. Terrorists’ rifles were aimed at snuffing out lives, leaving permanent physical and spiritual wounds and cleaving our community.

As the Children of Israel celebrated their festival of light, darkness came in the shape of executioners bearing a flag that soils the name of the God they feign to sanctify. Words fail before the brute desire to kill. The crack of gunfire drowns out all reason, and we are left bewildered at a hate so raw it could stare down a gunsight at a child and pull the trigger.

This visceral hatred has a diabolical heritage, rooted in the desecration of a faith. What we witnessed was a religion corrupted into a nihilistic cult, where death is sanctified as an oblation to a false god. To insist this has nothing to do with Islam is cowardice. It is to evade the truth that a worldwide battle is raging for the soul of that faith, and it will not be won by denial. Many of its victims are Muslims. We should stand with those within Islam who reject this rank corruption of their beliefs and are willing to name it, confront it and defeat it.

Because only one name befits this act: evil. That evil now lurks in our suburbs and infects the minds and hearts of many more than just two assassins. This is a dangerous age, and what we do from here will define us. Fortune will not favour the weak.

In the wake of the slaughter, images play relentlessly on every screen, as clip by clip of a dozen minutes of chaos are drawn from hundreds of cameras to fill the jigsaw of the killers’ murderous arc.

And we are left to wonder what this picture means. What is this Australia?

We woke up in a foreign land.

But in the darkness there were flashes of light. Ahmed al-Ahmed lived up to his poetic name: the praised one, son of the praised. His is the courage all hope they will show in a crisis, as he wrestled the gun from the assailant. It was an essential reminder that Islam is not owned by those who defile its name with their bile. It now falls to Australian Muslim citizens, with our support, to deal with the extremism in their community.

Then there was the defiance of Reuven Morrison, who picked up a brick to throw at the killer before being gunned down. In an echo of the Warsaw Ghetto Uprising, his dignity shone in how he chose to die, the act of a man who would rather be killed than be cowed.

As Viktor Frankl observed in the death camps, the last of the human freedoms is the ability to choose one’s response to abject evil.

Then Boris and Sofia Gurman, who tackled a gunman before the shooting started and died side-by-side on the footpath, ending 35 years of marriage in each other’s arms. May they stay that way for eternity.

Then all the ones we did not see. The silent moments of heroism from citizens who saw their civic duty as selflessness. The police and the surf lifesavers who chose to risk their lives for others. This is not a job; it is a vocation where routine sacrifice is too little honoured.

But beyond the heroes, hard questions remain for our country. Are we to be a nation of tribes? A place so shattered by the insidious politics of identity that it has no idea what it is? What are the values that we share?

There is too much diversity and too little unity hidden behind bunkum words like multiculturalism. The balance is tipped too far by those who denigrate our history, ignoring that the democratic foundation stones on which we stand were laid by those they deplore. The rights we take for granted are inherited, and Bondi’s heroes remind us that citizenship is also a responsibility.

A nation cannot thrive without a common set of values. What are ours? What is worth honouring, what is worth sustaining? What should we never countenance? What would we be prepared to die for?

Too often we hear cant phrases about shared values from those who cannot define them. Values have a spiritual dimension. Values were demonstrated in the actions of Ahmed al-Ahmed, and when the Gurmans gave up their lives in an act of grace to protect people they did not know.

Their courage personified that value best articulated in the testament we inherit from Jewish scripture: you shall not kill. The moment murder is justified, everything collapses.

There is only one religious reference in our Constitution, where the authors say the colonies “ … humbly relying on the blessing of Almighty God have agreed to unite in one indissoluble Federal Commonwealth”. If we plan to remain indissoluble, then Australia’s values must be anchored in more than mechanical refrains about institutions or trite tilts to “fairness”.

In his wartime reflections, Liberal party founder and former prime minister Robert Menzies said: “It is only that democracy which sees the ­superb spiritual value of the individual … which can really win a crusade against tyranny and force, and lead the way into a ­better world.”

Our values did not emerge from nowhere. In this country, as in every Western liberal democracy, they rest on a moral inheritance that is unmistakably Judaeo-Christian, articulated most clearly in the Decalogue. Do not kill. Do not steal. Do not lie. Do not bear false witness. These are not sectarian curiosities or private articles of faith. They are the moral guardrails that make freedom and civilisation possible. You do not have to believe in God to live by them, but you cannot abandon them without consequence.

A society that refuses to name its moral foundations will not long be able to defend them, and a nation that cannot say what it stands for will discover, too late, what others are prepared to destroy.

We need to write a decalogue for democracy in Australia if it is to endure. As Menzies said, the problem of democracy began when democracy was achieved.

“If government were by a despot, amiable or vicious, we, as the governed, might well shrug our shoulders and resign ourselves to fate,” he said. “But when government of ourselves is by ourselves, we must bestir ourselves. If, then, there is tyranny, it is our own.”

Soon it will be Christmas. It is a time to celebrate the birth of a child, which is understandable in all faiths, and none, as an enduring symbol of hope.

But this Christmas will be different. Here it will carry the un­settling tone of T.S. Eliot’s Journey of the Magi when he asks: “Were we led all that way for Birth or Death?”

“There was a Birth, certainly,

We had evidence and no doubt. I had seen birth and death,

But had thought they were ­different; this Birth was

Hard and bitter agony for us, like Death, our death.

We returned to our places, these Kingdoms,

But no longer at ease here, in the old dispensation.”

We need a new democratic dispensation that finds a unity of purpose and a genuine sense of a shared national mission. It is a hard journey that begins with sacrifice. It will be found in the spirit of Bondi: valuing your community above all else.

As Menzies said, “If man is to be adjusted to man, if we are to live together in mutual amity and justice, if we are to be dignified without being proud or overbearing, we must be givers rather than receivers; we must be quick to discharge our duties and modest about our rights.”

Amen. Light a candle for ­Matilda and each of the fallen this Christmas to drive out the darkness. And let us pray that, somewhere, they are waltzing.

This article was first published in The Australian.

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