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Wednesday, 19 March 2008
Page: 2359


Mr HAASE (10:29 AM) —I am very pleased to rise on this occasion to support this piece of government legislation, the Offshore Petroleum Amendment (Miscellaneous Measures) Bill 2008. The Senate committee recommended, as a result of submissions from Australian Petroleum Production and Exploration Association, that this legislation be voted up and that our petroleum industries take advantage of it. My research has shown that the federal government has provided well for the petroleum industry over the years in relation to exploration and production in Australia.

What I am far more concerned about is that it would appear the state governments are not keeping abreast of necessary changes to facilitate the petroleum industry. The member for Brand, who will be speaking shortly on this legislation, has a background that probably makes him more knowledgeable than most about this industry, and I will listen carefully to what he has to say in his opportunity to speak on this bill. The truth is that, even though this piece of legislation being proposed by the government will be an asset to the petroleum industry, and it follows on the heels of many things done by the Howard government to facilitate this industry, there is still a long way to go in changing the attitudes of state governments, especially in Western Australia, and in relation to those would-be petroleum processors with leases offshore from Western Australia.

We have in the past, for instance, done a great deal in the funding of Geoscience Australia to make sure that pre-exploration data is available to those corporates which would bid for leases at great expense and then drill out those leases exploring for a commodity that is highly valued today. Multiple millions of dollars are spent on the exploration of these leases that they apply for and win. If these international companies are fortunate and they find a resource, be it liquid or gaseous petroleum, that is when the hard work starts. The member for Brand well knows the hurdles that have to be jumped by these petroleum companies once they have found the needle in the haystack and, one would think, done all of the hard work. Their shareholders would say: ‘We have been immensely fortunate. We have been blessed with technical assistance from the federal government. We have been assisted by the federal government in the whole administrative process of finding and processing this petroleum product.’ They then find there is a hurdle called state governments. There is the hurdle of an environmental impact study. It exists at a state level. It exists at a federal level. Of course, a case in point is the recently proven up resources of the Browse Basin, offshore from West Kimberley in my electorate.

A particular company, Inpex—an outstanding Japanese company—have for years now been pouring millions of dollars into the process of getting some progress towards production. They worked through the state environmental impact studies and applied again and again, having been brought back to the table to address yet one more issue, one more fine detail in satisfying the environmentalists. They then had to come to the federal government and go through the process again.

Many members would be surprised to learn that, as difficult as this process is in its laid-down formal structure, like a bolt from the blue comes a further imposition from the new federal government. There will be not just the formal process of abiding by the requirements of the environmental impact studies at state and federal level; we have now had a decision taken by this government that says: ‘All bets are off. The formal details that we wanted you to attend to, the hurdles we wanted you to jump, the game, are all changed. We are now going to carry out a survey of the Kimberley coastline to establish what the situation is there generally and, instead of being able to apply for a particular location to establish an LNG production plant to process your Browse Basin gas, we are now going to tell you where a suitable site might be for a multiuser piece of infrastructure. We will tell you where that will be. Implied is that you will wait cap in hand for your shot at some production from this facility and you will take your orders from a higher authority.’ This ignores the fact, of course, that multimillions of dollars have been invested by shareholders. It ignores the fact that finding that resource in the first place was an expensive process and involved a great deal of technology and good luck. We are now expected to believe that these companies are simply going to persevere, address the new hurdles that are set up and be sufficiently tenacious to eventually get this investment to pay some dividends.

I put it to you, Deputy Speaker Andrews, that tenacity is a wonderful thing but life is hard enough. We ought not be making things unnaturally difficult. I am wondering just why it is that this new government is creating such an apparent impasse for this company to develop a resource that, when it is productive, will improve our balance of trade and will give greater revenue flows, with tax implications. It certainly would have given in its original proposition form opportunities for Indigenous people of the Kimberley to actually have a future, to have an opportunity, as we all have, to hold down a job for remuneration and to have a quality of life, to have self-esteem—to have all those opportunities that flow from having a job and not be dependent on welfare. Without this latest decision from the federal government to search for a suitable location that will be acceptable to the multiple levels of public opinion, it would have been the case that various companies—Chevron, Inpex, BP, Woodside—would have applied for and constructed individual gas processing facilities around the Kimberley coast, making pacts with Indigenous Australians in exchange for jobs for production, for a future in exchange for access.

I applaud that opportunity for companies to make investment in Australia. I think making an investment in Australia is good for Australians. It is especially good in remote areas of Australia because it gives for the first time an opportunity for employment for Indigenous Australians. We take for granted our opportunities to have jobs. We take for granted the opportunity to have a life that is sustained by our personal efforts. Indigenous Australians in remote areas have, in the main, never had a shot at this. But the government has come along now and said, ‘No, rather than a multiple of soft footprints on the environment distributed over a large area of country where many separate groups will have the opportunity for a job, we have got this focus to find just one location.’

I mused as to why. The best solution I can come up with is that this is some bid to address promises that were made pre-election in exchange for swapping vote preferences with the Greens—a very substantial group in the Kimberley. The fact is that there is a perception in the Kimberley that any development ought to be banned. I might add this is a view that is held by people who, in the main, enjoy a wonderful life. Many of us in this place are passionate about our own backyard. I believe most people who live in the Kimberley—especially in the coastal area—have got it right: that is heaven; everywhere else is somewhere down the line. But it galls me to see people comfortable in their environment—a man-made environment, an environment served with all of the utilities and the accoutrements of modern life—say: `No. We have got this. We wish now to passionately guard that and jealously prevent anyone else from enjoying it.’ Broome as it is today, for instance, has all of its amenity, all of its vibrant international tourist activity, but why do the people who are resident there wish to deny others in other parts of the Kimberley the same shot? It confuses me, quite frankly. I think it is short-sighted. I think it implies the ‘I’m all right, Jack’ system and I do not quite understand it.

Indigenous Australians need a shot at life. The Kimberley is a very vast and, yes, I agree, pristine environment in the main. But I would urge all of those who are so passionately opposed to giving Indigenous people a shot at life to wander some 800 kilometres down the coast and have a look at the development of Woodside. Woodside have a very extensive operation located on the Burra Peninsula. If you are more than about 15 minutes flying time away from that site you cannot see it. The absolutely huge development that is there, comparatively speaking, is invisible if you are more than about 15 minutes flying time away. It is about the size of a fly dirt on a football field if you consider its impact on the Pilbara, and a similar situation would exist if various spots around the Kimberley coast were developed to service the Browse Basin.

The argument that one very large piece of multiuser infrastructure will somehow have a softer footstep than a number of small, well-contained, well-regulated production facilities around the Kimberley coast, I believe, is a nonsense. Furthermore, as I have said, it will prevent the greatest number of Indigenous Australians from being involved in employment opportunities. But, more importantly, the investors in those corporations, who have made an investment not for some philanthropic ideal but actually to make a profit—I think we will all agree profit is not a dirty word; it makes the world go around—need security of investment. For security of investment, the particular corporation needs to have security of sales based on guarantee of supply

So the potential purchasers of the INPEX product, for instance, will want to know that supply can be guaranteed. And INPEX, in their wisdom—and they are not mugs, believe me—accept readily that, if they have a stand-alone facility that they have built to their specifications, it will have an IR strategy that is to their specifications, the product will have a specification that meets the needs of their clients, cash will flow in exchange for the flow of product and the investors will have a guaranteed secure situation. If you have the outside influence of this ratbag attitude from the federal government of casting about for some alternative supply base, where corporates stand in line for their shot at production and consequently their customers stand in line waiting for the delivery of the product that they have guaranteed to take, if it comes, then that is not a secure situation.

There is little to say in favour of a single multiuser infrastructure. We have experience from around the globe of industrial areas set up on a particular commodity, and we have the knowledge of that environmental experience. Why do people refuse to look at history when planning for the future? Look at Birmingham; look at Newcastle; look at some of the great blights behind the Iron Curtain where industrial areas have destroyed the environment: how could you argue that one great, large blob will have less impact on the environment than small-footprint, well-regulated environments? It is beyond me.

This piece of legislation is necessary because it quite rightly shows our concern for making the situation better for those corporations that are prepared to invest in leases, invest in exploration and then invest in the development of those areas. By the way, this INPEX investment is proposed to be somewhere in the area of $20 billion. How would you like to start raising $20 billion of capital in Australia today? It would be almost impossible, I believe. We have a situation where companies are prepared to make the investment to bring these valuable resources on stream, and then they are bludgeoned with further bureaucratic hurdles, as I have said, designed only to appease some previous political deal whereby the votes of the Greens were required. It will not do them any good, but that was the plan, pre-election.

I am not going to say any more on this bill. I have had the opportunity, and I appreciate that opportunity, to air some of the other problems suffered by the industry and I thank the House for that opportunity. But before resuming my seat I will make one final point: corporates make a huge investment in this nation in exchange for a product that is surely highly valuable. But they need, to a degree, to be unfettered by unnecessary bureaucracy. Yet a great hurdle has now been imposed at a state level. That is in addition to the apparent confusion that exists in the state as to how to deal with these internationals and what their priorities are. We now have the Western Australian government saying: ‘You’ve found this resource, on the open market, in competitive bidding and with the investment of millions of dollars. But, now that you have found it, we’re going to assume almost a state controlled situation, and we want you to guarantee that you will hold back 15 per cent of the product and sell it into the domestic market of Western Australia.’ I say: that is fine, but let it be a commercial deal that gives a return to the investor. I do not mind Western Australians having a guaranteed supply of energy. But let it be on commercial terms and let it not be to the detriment of investors—investors without whom we would have no petroleum industry in this nation and we would have a huge variation in our balance of trade. Investors are very important. Profit is not a dirty word, and states should either get up to speed on the game or step out of the way of industrial development of this fine nation.