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Wednesday, 16 October 2002
Page: 5246

Senator O'BRIEN (11:32 AM) —Last night in regard to the Petroleum (Submerged Lands) Amendment Bill 2002 I was talking about the Sunrise field in the Timor Sea and the current debate about whether the gas in that field should be exported from a floating facility or brought to an onshore facility in Darwin and used for domestic gas purposes. If we had such a policy in this country, while some would argue that government intervention might cause a flight of capital and leave our reserves unexploited, the finite non-renewable reserves are not going to dissipate in the short time span that we would be talking about in human terms. We are talking about the resources laid down in a geological form which have existed for many, many years. In the context of the life of these assets, whether they are exploited this year, the year after or in a decade's time is hardly relevant. As was argued by my colleague Mr Fitzgibbon in the other place, we are not suggesting for a moment that the exporting of gas from a floating LNG facility is a bad thing for Australia. The real issues are whether it is in the national interest, whether it will return a maximum benefit to Australians and whether exporting from a floating facility is a better proposition for Australia than bringing that gas to an onshore LNG facility and using it for domestic purposes.

I touched upon the issue of the Northern Territory's interest in this matter. The Northern Territory has long struggled in an industrial sense. It has long relied on the Commonwealth to keep its economy turning over, if not humming along. It has had its moments economically in terms of boosts in tourism and property investments in the Darwin property sector following the cyclone and the build up of the construction work force that resulted from that, the developments in the uranium province and the advances which were brought into the tourism industry by the development of the casino in Darwin. All of the ups and downs that the Territory has faced are due to the fact that the extractive industries have been of assistance and the tourism industry has been of assistance to it, but there has been no long-term industrial base for the Territory to harness as a basis for a more permanent population, to drive its economy and ultimately to make it less reliant upon the resources of the Commonwealth.

I am sure the Northern Territory and Territorians generally would prefer to be self-reliant. They would prefer, perhaps driven by the industrial base, that they were in a position to attract further major investment and further infrastructure development. Manufacturing itself could well be facilitated by the delivery of a domestic gas option into the Darwin market. It is proposed that, if that took place, at least potentially there would be the ability to distribute that gas to other parts of the country—to link into the Cooper Basin, for example. These may be options which have significant difficulty in terms of financial viability, at least in the short term. One never knows what is required in the long term, given the fact that we have significant resources of natural gas in the south-east of Australia but the Cooper Basin gas fields have a finite life. Apart from the North West Shelf, there are not too many other options at this stage to supply the main population centres of Australia with domestic gas.

We do not believe, therefore, that the government is doing enough to ensure that the national interest that I was talking about has been properly focused with respect to the Sunrise gas fields. We believe that the government should do more because, at the end of the day, if it is proven that there is a potentially viable option for domestic gas from Sunrise, it seems to the opposition to be preferable that the interests of this economy come first, and certainly that the nation-building consequences of further industrial development in Darwin come first, rather than what might be a good option for the company—that is, a floating liquid natural gas option—but what is not necessarily in the best national interests. However, if at the end of the day it is proven that domestic gas from Sunrise is not commercially viable, the opposition will accept that. I guess it would be disappointing but there is no point in pursuing an option that is only going to see companies lose money, because no company is going to invest in the proposition and no government can leverage development on the basis of a financially deficient option.

Having said that, the opposition is not convinced that enough has been done or that enough encouragement has been given to the joint venture partners in the Sunrise project to look sufficiently closely at the prospect of bringing gas onshore, not only for the purposes of the Northern Territory but also because there is some doubt about the proposal to bring gas from Papua New Guinea and down the coast of Queensland to fuel areas like Mount Isa, where a considerable amount of work can be done in terms of value adding to our product that cannot be done without a reasonably priced source of energy. These are additional things that can be done, and this bill is a small step in the right direction, but, as I said earlier, it does not go far enough.

I think the opposition will be in a position to support this bill. We will listen carefully to the views of others in relation to any proposed amendments. I have heard that there may be some but, essentially, we are happy to give our support to the amendments proposed in this bill. We will consider others but we will not be obstructing the passage of the bill.