The plan to transition Australia away from fossil fuels

A plan to decarbonise the Australian economy by nationalising and euthanising the Australian fossil fuel industry, writes Guy Lane.

A 2019 REPORT CO-AUTHORED by the late Professor Will Steffen stated that human civilisation had entered a State of Planetary Emergency as both the risk and urgency of climate change had become acute.

Around this time, the Great Barrier Reef – the jewel in Australia’s biodiversity crown – began back-to-back bleaching events.

Underscoring events on the reef, last year’s Global Tipping Points report claimed coral reefs to be in terminal decline as a result of increased sea temperatures due to climate change.

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At Davos this year, Johan Rockstrom – Director of the Potsdam Centre for Climate Impact Research – called for a rapid transition and a full-scale phase-out of fossil fuel industry.

Australia is home to a large fossil fuel industry that has two relevant parts:

Domestic: ASX-listed Australian firms that produce or import fossil fuels
International: Australian subsidiaries of foreign corporations, wholly internationally owned corporations, and joint ventures between Australian and international firms.

Domestic corporations include Woodside, Santos, Beach Energy, Karoon Energy, Viva Energy, Whitehaven Coal, and Stanmore Resources. Origin Energy is also included due to its part-ownership of a production asset.

These eight domestic companies are worth about $100 billion on paper and make around $10 billion profit annually.

RITA – Rapid Industrial Transition Australia – is a plan to transition Australia away from fossil fuels in three phases.

Phase 1: Legislate and finance

Parliament declares a National Security Emergency due to present and projected impacts of climate change.

Parliament passes the RITA Act that invokes Section 51(vi) constitutional defence powers as used during both World Wars – to impose controls over industry.

The RITA Act mandates staged phase-out of fossil fuel production, domestic consumption, and export, with the country becoming fossil-fuel-free within 15 years or sooner.

The Commonwealth prepares finance – around AU$100 billion dollars – to give effect to the Act.

Phase 2: Nationalise and negotiate

The Commonwealth offers to purchase ASX-listed Australian corporations engaged in extraction and importation of fossil fuels at 100% of their pre-RITA Act market value.

As the share price of these companies will likely drop 60% or more following the RITA Act passing, this offer is strategically generous as shareholders receive compensation for fossil fuel reserves that have become legally unextractable.

Companies refusing this offer face compulsory acquisition at post-RITA Act value, in compliance with s51(xxxi) "just terms" requirements.

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The Nationalisation of the Australian fossil fuel industry is essential for three critical reasons:

profit capture for public benefit
ensured compliance through elimination of lobbying interference; and
crisis resilience and energy security

International operations cannot be directly nationalised, however, the Commonwealth controls export licenses, environmental approvals, etc, and can negotiate phase-out agreements backed by diplomacy and regulatory pressure.

Phase 3: Energy transition

The nationalised companies will be merged into a Commonwealth-controlled entity that will be run by the Fossil Fuel Commissioner (FFC).

Existing boards and senior leadership will be replaced with Commonwealth operatives.

In line with the phase-out, the Commonwealth will close some assets and continue with normal operations for others, to maintain supply of energy, employment and profits through the transition.

Profits from the operating assets will reduce in line with the phase-out provisions, yielding potentially AU$80B over the 15-year transition.

This money will be used for:

transition from fossil fuels to clean energy;
repayments of any debt incurred to acquire the assets;
a national Public Relations campaign;
supporting the CO2 drawdown industry focused on soil, forest & ocean carbon;
international outreach to encourage other nations to follow-suit; and
social transition of affected communities.

RITA may not prevent the heat-death of the Great Barrier Reef, but it offers a turning point for Australia to transition from a net source of carbon emissions to a continent-wide carbon sink, to stop making things worse and start making things better for our climate and the future of life on Earth.

Guy Lane is an environmental scientist, author, and entrepreneur. He is a commentator on ecological sustainability and geopolitics, and a fiction writer with dozen fiction novels and novellas with sustainability themes.