Senator O’BRIEN (7:46 PM) —I want to commence by making it clear that Labor supports the passage of the Offshore Petroleum Bill 2005 and related bills before the Senate. The Offshore Petroleum Bill 2005 is effectively a rewritten and renamed version of the Petroleum (Submerged Lands) Act 1967, which has been the primary legislation for the administration of Australia’s offshore petroleum resources for 40 years.

The legislative package before the Senate amends the structure and style of Australia’s offshore petroleum legislation and implements a modest number of minor policy amendments. According to the government, the management regime for offshore petroleum exploration, production, processing and conveyance will remain largely unchanged. In his second reading speech in the other place, the Parliamentary Secretary to the Minister for Industry, Tourism and Resources—who was, incidentally, dumped in the recent reshuffle—said the Petroleum (Submerged Lands) Act 1967 and incorporated acts have become complex and unwieldy. The changes are designed to reduce compliance costs for the industry and the state and territory governments who administer them. My colleague the member for Batman noted these comments and compared the size of the current act—less than 600 pages—with its replacement, which is more than 600 pages. The explanatory memorandum is itself over 300 pages long. Legislation is rarely simplified by making it longer, something Australia’s accountants know only too well following the introduction of the government’s new tax system.

There are many challenges confronting our energy sector. In 2003-04 we exported $8 billion worth of crude oil, LNG, and LPG, and a further $1 billion worth of refined products. This sounds good until you understand that, in the same period, we imported well over $10 billion worth of crude oil, LPG, and refined products to fuel our transport sector. In a country which, due to its size, is so reliant on transport, we cannot afford to be complacent about the future of our domestic oil and gas industry. The International Energy Agency’s 2005 review of Australian energy policy noted Australia’s thirst for oil, saying that the transport sector could particularly benefit from efficiency efforts with its fuel efficiency standards at the lower end of IEA countries. The review noted too that transport accounts for 40 per cent of final energy consumption and is projected to grow by two per cent annually over the two decades to 2020.

At the same time, oil production in Australia by 2020 is likely to be less than half of what it is today and demand is likely to exceed production at least threefold. Our reliance on imported oil is already having repercussions. Many motorists are struggling to keep their tanks full and afford other necessities of life. The impact of oil prices is starting to show in patchy retail spending. The transport sector is also feeling the squeeze. Australia is consuming oil three times faster than we are finding it, and we already import 60 per cent of our domestic oil needs. The Howard government has never addressed this fundamental problem of Australia’s reliance on imported fuel or the need to apply the competition blowtorch to the petrol industry. We are running out of time, and Mr Howard is leaving Australia unprepared for the future.

There is no simple solution to the problem of high petrol prices, but there are things the Howard government can do to make a difference. There are responsible steps which the Howard government could take now. First, instead of increasing our reliance on imported oil, the government should help develop an Australian gas to liquids fuel industry. We want Australia’s natural gas developed to make us more self sufficient in transport fuels and less vulnerable to future global oil shocks. Australia’s competitors in the gas industry are way ahead of us, particularly in the Middle East where countries like Qatar already have major gas to liquids projects making refined products for the global market. Second, it should provide a real future for the biofuels industry held back by continual Howard government incompetence, cronyism and mismanagement. Third, it should apply the competition blowtorch to this industry to make sure Australians get the lowest possible prices at the bowser.

I commend to the Senate Kim Beazley’s blueprint speech entitled ‘Developing the Australian fuel industry’. I also commend Mr Beazley’s blueprint speech on skills and schools, which outlines Labor’s plan to address Australia’s growing skills deficit. No industry sector has been harder hit by skills shortages than the energy sector. I also commend to the Senate the many sensible things Martin Ferguson has had to say as Labor’s resources spokesman, including the detailed remarks he made during the debate on these bills in the other place. These bills do not address the big issues facing Australia’s energy sector. They do not address our future domestic fuel needs. They do not address our need for skills. They do not address the provision of infrastructure to support industry development. Having said that, these bills are unlikely to do any harm. It is not high praise, but it is the basis on which Labor extends its support for their passage.