While touring Ipswich in Queensland last week, Gillard said: "We are going to be reliant on fossil fuels for a long, long period of time but we are going to change our energy mix. We are increasingly using the power of cleaner and renewable energy."
Her comments may be construed as intended for the state where support for the Labor party primary vote has plummeted to 22% and there are mammoth proposals for coal and gas exports.
While Gillard has been touting a "clean energy future", many industry observers say the admission of Australia's reliance on fossil fuel reflects the "watermelon" nature of her policies.
Namely green on the outside but really relying on burning coal and gas to maintain affordable energy supply.
There is a subtext to the reliance on fossil fuel.
The LNG export projects underpinned by the coal seam gas industry are likely to drive up wholesale gas prices across the east coast.
The recent gas market report from the Bureau of Resources and Energy Economics quantifies the increase.
It noted consumers on the eastern seaboard would have to adjust to the higher prices as contracts for available supplies increasingly became linked to international oil prices.
The general metric is that a $US100 a barrel oil price translates to about $7 per gigajoule for gas, which is twice the east coast price.
The BREE report also crunched the numbers on the projected share of fossil fuel and renewables in the energy mix.
It forecast that by 2025, Australia could expect to rely on coal for 61% of electricity generated, gas for 18% and renewables 20%.
In 2010, coal was at 76%, gas 15% and renewables 8%.
BREE's outlook for other Asian countries, especially Australia's coal and gas export destinations, makes for interesting reading.
It highlights more effective policy measures in those countries.
For example, China's coal dependency will drop to 59% in 2025 as gas use goes up to 7% and use of renewables goes up to 30%.
Similarly, Indonesia is likely to reduce coal burning to 27% and increase the share of renewables to 25%, while India will drop coal use to 53% and increase renewables to 25%.
Commenting on the domestic gas market, the BREE report acknowledges while the domestic market is tightening, it is fundamentally an issue of price and not availability of resources.
Analysts say the correct policy response to get affordable prices should be one to facilitate energy and infrastructure development and not one of market intervention.
