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Tuesday, 9 October 1984
Page: 1450

Senator ROBERTSON —I refer the Minister for Resources and Energy to a proposal to construct a natural gas pipeline between Alice Springs and Darwin and the associated proposal that the new Darwin power station be fuelled by natural gas. I further refer to recent newspaper reports that the Northern Territory Government believes that the pipeline proposal is 'a definite goer'. Can the Minister advise the Senate of the progress of discussions between the Northern Territory Minister and himself on this matter?

Senator WALSH —Mr Tuxworth had a meeting with John Dawkins and me about a month ago, as a result of which it was agreed, or I thought it was agreed between the three of us, and Mr Dawkins thought it was agreed, that there was no point in holding further ministerial meetings until there was approximate agreement, between the Bureau of Mineral Resources, the Northern Territory Department and some consultants which it has engaged, on the gas reserves in the fields which the Northern Territory Government proposes to tap. I might add that there is a wide discrepancy, particularly in one field, between the Bureau of Mineral Resources estimates and the consultants Van Poollen and Associates who were engaged by the Northern Territory.

Notwithstanding that, Mr Tuxworth rang about a fortnight ago and asked for another meeting. I sent a letter to him on 5 October drawing attention to our original agreement; that is, that there was no point in holding further meetings until there was agreement, or something approaching agreement, on the gas reserves. Obviously it would be futile and stupid to build a gas pipeline in the expectation that there was sufficient gas to supply a market for 30 years and then discover that there was only sufficient gas to supply it for 15 years. The economics of the project, which are probably marginal in any case, would, in those circumstances, clearly be negative.

I must say that I am becoming a little worried about some of the comments that Mr Tuxworth has been making recently. I suppose that he is making his run for the leadership of the Northern Territory Government after Mr Everingham is forced to resign and thereby end his parliamentary career because he is not likely to be coming into the House of Representatives as he seems to believe. For example, my concern about Mr Tuxworth was greatly stimulated when I saw a Press clipping from the last issue of the Sunday Territorian which is headed ' Bid for Smelter', which reports that Mr Tuxworth is going to South Korea in order to negotiate to construct an aluminium smelter in the Northern Territory. It is common knowledge that electricity to aluminium smelters is normally sold at around 2c per kilowatt hour in Australia and that the cost of producing electricity in the Northern Territory is, according to the Territory Government, in the vicinity of 18c per kilowatt hour. Even with the most optimistic expectation of the cost of electricity from its gas project it would still be of the order of 15c a kilowatt hour or thereabouts. I find it very surprising that Mr Tuxworth should be going to South Korea to negotiate to sell electricity at presumably a price in the vicinity of 2c per kilowatt hour when, on the most optimistic expectations, the production cost of that electricity would be 15c per kilowatt hour.

The same Press report also forecasts-Mr Tuxworth, has apparently warmed to his subject of throwing pies in the sky-that if the central Australian gas reserves were exhausted the off-shore gas which will be discovered very shortly off Darwin would be piped down through the pipeline towards the south instead of the north in this case and fed into the national grid. He said also, of course, that it would need to be sold at uniform prices-a suggestion which I must say I find extraordinary.

Senator Chaney —Mr President, I take a point of order. This seems to be an extremely rambling answer to a specific question. The Minister is now going into all sorts of extraneous matters. I ask you to bring the Minister to order so that we can ask a few more questions at Question Time.

The PRESIDENT —I listened to the question asked by Senator Robertson. The Minister is within the ambit of the question but I ask him not to debate it in any way.

Senator WALSH —Mr President, I am certainly not debating the question. The suggestion to pipe Northern Territory gas all over Australia and sell it at uniform prices-this is not a matter of debate but a matter of fact-for example, to pipe it from Darwin to Sydney and sell it in Sydney at the same price as it would be sold in Darwin, clearly would disadvantage any industries which may or may not at some time in the future be thinking of locating in Darwin and it would encourage them to locate instead in Sydney.