Subjects: Labor's energy policy, rollout of renewables, East Coast gas reservation, the meeting with President Trump and Kevin Rudd.

LAURA JAYES, HOST: And let's go live to Canberra now. Joining me live is Industry and Innovation Minister Tim Ayres, who's been quite busy over the last couple of weeks. So, let me pick up there where I left off with you, Ron, about net zero practical solutions. Labor's rollout of renewables is certainly far from perfect. Yes, the Coalition don't know what their policy is but they're in opposition at the moment. Do you agree with Chris Minns that there needs to be an East Coast Gas Reservation and after 10 years need to remove that red and green tape and get Narrabri off the ground, Tim Ayres.

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Hey, Laura, it's really good to be on the show. I think it's been a few weeks. That was an interesting, interesting discussion, wasn't it really? Look, I don't have any difficulty with Chris in New South Wales advocating that proposition. I'm of course constrained by the fact that we’re engaged in a Cabinet review led by Madeleine King and Chris Bowen, the energy and resources ministers, on exactly that question: how do we secure enough Australian gas for Australia? And of course, you would expect I'm particularly focused on those big industrial gas users who need gas as a feedstock to secure a Future Made in Australia. Like that is – I'm absolutely and this government is focused on the market settings not because we're fascinated by intricate policy detail; it's because blue-collar Australia now and into the future requires delivery on gas market settings that are in the interests of Australia. And of course, we've got a huge gas industry that's got enormous capability and projection into our region. It's a big contributor. So, that's where we're focused. It's completely consistent with our emissions objectives and our industrial objectives, our economic objectives and our objectives about what we're trying to deliver in industrial regions.

HOST: Is this really what our country calls for at the moment, consistency? Don't we need you to pivot? Because once you laid down this plan before the election, yet this massive renewables rollout, we weren't really talking about AI in the way we are now. At the moment, this is part of your portfolio area. The world is talking about the enormous amount of power that is going to be needed to power AI and from where we sit at the moment, we are falling dismally behind, and it is not even part of the central conversation. That is what is the biggest concern, is it not?

AYRES: I see no inconsistency here, Laura, that we are in the transition and addition business but we, we will need huge –

HOST: Ok, I don't want to interrupt you, but I just want to make this one interruption Tim Ayres, if you'll allow me –

AYRES We will need lots more electricity.

HOST: Yes, we will. So, at the moment we seem more focused on reducing emissions and net zero than we are on actually generating more stable power and eventually cheaper power. These seem like they are working against each other and there is too much focus on emissions when there should be more focus on actually our economy and embracing this because we're about to be left behind.

AYRES: No, no, Laura, there is absolute consistency here. We cannot return to the delinquent decade –

HOST: There needs to be urgency.

AYRES: Of the previous government. Urgency is absolutely the core of how I'm approaching these portfolio issues, how Chris and the rest of the government are. We need to get on with cheap, renewable power, the lowest cost form of power, transmission, storage, gas. These are all part of the story for Australia. If we're to achieve our ambitions in terms of industry, in terms of digital infrastructure, which is, as you say, power hungry. Australia's natural advantage here is, you know, we're different to Finland or the United States –

HOST: Is coal and gas. Our natural advantage is coal and gas.

AYRES: I couldn't, I couldn't imagine anything, Laura, that would make our industrial ambitions impossible or lift the price of power more than doing a U-turn –

HOST: Not a U-turn.

AYRES: – back towards the second most expensive form of energy. We’ve had 24 –

HOST: You could ramp up gas, though, dramatically. Like Chris Minns has suggested.

AYRES: Yep, we need the – like let's take these things in sequence. Gas is important for households as a peaking capacity in the electricity sector, where you want just the right amount, you don't want too much because –

HOST: Why?

AYRES: It's very, very expensive. Because it is very, very expensive.

HOST: Well, not if you had an East Coast gas reservation because then there would not be at the whims of the fluctuations of the global market.

AYRES: Laura, the lowest cost by a country mile is renewables plus gas plus storage. By a country mile. There is –

HOST: Well, why weren't you able to deliver that $275 cut in electricity prices then without a subsidy? If what you're saying is true, why was that not delivered?

AYRES: All I’ll say is there are two pathways, one of them laden with challenge as a national interest objective to modernise our electricity system to get the lowest possible household prices and to drive prices down for industry. The alternative is a return to the delinquency and self-indulgence that you can see on the other side. Coal-fired power stations that nobody wants to build and will never build in Australia because it's a dumb idea. It's expensive, it pushes electricity prices up and you can't find a single person in the investment community who would have the remotest interest in doing it. The last government tried. You had Matt Canavan sending millions of dollars to some electricity company. God knows who they were. I don't remember who they were. Zero got built. I don't think they even built a fence. They spent a lot of public money –

HOST: Sure, I mean, that’s fine and they were in power for 10 years.

AYRES: They didn't turn a sod on that project because nobody wants to build it, Laura.

HOST: And you're absolutely right. But you can't sit here and tell me that this rollout is going particularly well.

AYRES: It is full of challenge. It's like building the original Snowy Scheme, doing big things for the country. These are big challenges. It does require a sense of national spirit and progressive patriotism here. People who are like Senator Canavan or Mr Joyce who are running around country communities, you know, basically chaining themselves to bulldozers and trying to stop development in transmission infrastructure and wind generation, are killing blue-collar jobs. They are making it harder for firms like in the aluminium sector, where what these firms need is access as fast as possible to renewable power because it's cheap and that's what their customers are demanding they produce. These characters who are using, you know, social media memes imported from overseas to prosecute some pretty silly propositions like, I accept these projects have got to get social licence and all of those things, consult, that's important. But in Canberra we've got to be responsible and we're about delivery; they are about delinquency. That's the problem here.

HOST: Alright, we haven't spoken to you since you went to Washington. I just wanted to bring up these pictures of you in that meeting with Trump, and Rudd was sitting just up from you as well. It was pretty awkward at the time. Just give us a little bit of insight into to how the room was and the mood of the room was when, when that exchange happened.

AYRES: You know, it wasn't awkward at all. It was funny and it was an enjoyable exchange. It was a very warm exchange. I think you know that Kevin has done an outstanding job in Washington, well known all through the discussions that I held on the side. It was a very warm discussion in public; it was a very warm discussion in private. And what you saw was the Prime Minister prosecuting Australia's national interest and delivering for blue-collar jobs and future regional industry with a critical minerals deal that is all about mining and production, from mines to metals here in Australia, securing our future advantage and having industrial policy and blue-collar jobs at the heart of the bilateral relationship. That's a good thing. It was a very enjoyable discussion and we made very significant progress.

HOST: Ok, Tim, good to talk to you. It's been a while. Love talking energy with you.

AYRES: It has. Anytime. See you, Laura.

HOST: We'll see you soon. Tim Ayres there live from Canberra.

ENDS.