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Oil, gas and windfall -

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ELEANOR HALL: ExxonMobil and BHP Billiton have today announced a new oil and gas drilling project
in Bass Strait that they say will be a key step towards meeting eastern Australia's long-term
energy needs.

The consortium says the Turrum project will be able to provide enough energy to power a city of a
million people for 20 years.

At the same time in Victoria's north, a small community-owned wind farm project has moved a step
closer to completion.

Alison Caldwell has our report.

ALISON CALDWELL: It's no secret huge reserves of oil and gas exist underneath Bass Strait; the
question is how much.

The Turrum oil and gas field is 42 kilometres from the Victorian coastline, off Gippsland, and lies
in just 60 metres of water.

According to the consortium, it contains approximately one trillion cubic feet of natural gas and
110-million barrels of oil and gas liquids.

ExxonMobil and BHP Billiton say that's enough energy to power a city of a million people for 20
years.

The Energy and Resources Minister Martin Ferguson says it an important investment in Australia's
energy security.

MARTIN FERGUSON: Together with Kipper announced earlier this year, Turrum is just the start of what
I hope will be a new generation of oil and gas developments in the Bass Strait.

ALISON CALDWELL: Construction of the project is expected to begin in 2009. The consortium says oil
production should start in 2011 with first gas sales from 2015.

The chairman of ExxonMobil Australia, Mark Nolan, says the primary driver for the projects has been
the increase in the demand for gas. The investment is now more irresistible than ever.

MARK NOLAN: We've known about these fields for quite some time but their time has come because of
the growth in the need for their energy into the growing gas market.

ALISON CALDWELL: Natural gas produces up to 70 per cent fewer emissions than coal in power
generation and uses up to 80 per cent less water.

The World Today asked Mark Nolan what the carbon footprint of the new project will be; the answer
was less than precise.

MARK NOLAN: Bringing this gas into the energy mix has a very significant environmental benefit.
It's up to 70 per cent less greenhouse gas emissions and some of the current coal projects and has
environmental benefits including very much reduced water in power generation.

So we see these projects as a very big step forward in terms of environmental benefits.

ALISON CALDWELL: Not surprisingly the Brumby Government is thrilled with the announcement. It's
been criticised for recently unveiling another brown coal fired power station for the Latrobe
Valley.

North-west of Melbourne though, a regional community is taking the issue of climate change into
their own hands with a community-owned wind farm near Daylesford.

Today Hepburn Wind launched its share offer. Chairman, Simon Holmes a Court, says state and federal
governments need to do more to encourage the growth of renewable energy sources.

SIMON HOLMES A COURT: I'm really disappointed that the Government is pushing this notion of clean
coal. I think anyone who has looked into it realises that it's a complete misnomer. There is no
such thing as clean coal.

Clean coal is only washing brown coal to end up being as clean as black coal and everyone knows
there is nothing clean about black coal, but it is encouraging to see the Government push renewable
energy and to push gas fired plants.

On the renewable energy front, the Government is giving $1-million towards our project. It's a
great start but we would like them to put a much bigger emphasis on renewable energy and start
moving away, start moving Australia towards a post-fossil fuel economy.

ALISON CALDWELL: You wouldn't say, would you, that wind power could provide baseload power for
Australia, would you?

SIMON HOLMES A COURT: Australia uses, at the moment, only one per cent of Australia's power supply
comes from wind power. In countries like Denmark and Germany, up to 16 or 17 per cent of that power
comes from wind so we've a long way to go before we can really say that wind power is making a
meaningful contribution to our grid.

At the moment wind power is the low hanging fruit. We can get a lot more out of it and we are
really looking towards the Government to give the industry support and underpin it with strong
emissions targets.

ALISON CALDWELL: The Opposition's environment spokesman, Greg Hunt, says community wind farms are a
good idea.

GREG HUNT: I think the concept of a community-owned wind farm is a very important one. There are
two elements with wind farms. One is, firstly is it a good environmental outcome, and generally I
think it is as a way of producing energy which is acceptable and desirable.

Secondly, from a planning and community perspective, does it intrude upon the landscape and the
community and a community-owned wind farm goes a long way towards dealing with that.

You still have to make judgements on each individual farm in the context of the landscape but the
failure to date has been community exclusion. And unless you have community support, you're not
going to have an advance of this concept around Australia.

ELEANOR HALL: And that's the Federal Opposition's environment spokesman, Greg Hunt, ending Alison
Caldwell report.