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Tuesday, 16 October 1973
Page: 2203

Ms SPEAKER -Order! If the right honourable gentleman claims to have been misrepresented he may make a personal explanation at the completion of this speech.

Mr KEATING - Thank you Mr Speaker. Of over 140,000 square miles we have 15 per cent Australian equity. In the lower part of that 140,000 square miles there are about 92 locations in which it is worth drilling. The Woodside-Burmah consortium has explored only one-third of those locations. But instead of putting down a decent drilling pattern of about one hole in every 80 acres - which if there are good sediments should show oil - it has not done that. It has not explored the area properly as it is obliged to do under the Petroleum (Submerged Lands) Act. It put the holes down over a large area so that it could stretch its net as far as it possibly could and say that it has explored the area so that the land does not revert to the Commonwealth when the lease expires in 1975. So the company is not complying with the spirit and terms of the Petroleum (Submerged Lands) Act. It is trying to get away from them.

The Opposition roasts the Minister for Minerals and Energy because he will not agree to allow farm-ins to multi-national corporations which are to go into the area and explore it with a 50-50 proposition - they put up the cost of the exploration and Woodside-Burmah would get half of what they find. In the really juicy areas Woodside-Burmah is to get 75 per cent of what they find and they keep 25 per cent. If Woodside-Burmah cannot explore the area adequately it should revert to the Commonwealth and the Commonwealth will be quite able to find any number of multinational corporations which will go to the expense of exploring the area. The 50 per cent or 75 per cent would then come back to the people of Australia. But that is not good enough for the Opposition. It wants all that money to go back to its friends, to the multinational corporations it sees fit to represent.

There would not be one conservative political group in any comparable country in the world that is so slavishly tied to the needs of the multi-national corporations as is the Opposition. One can look at Great Britain or any of the conservative parties in the West. All the other conservative groups have stood their ground against multi-national corporations. The members of the Opposition have enslaved themselves to the point of being ludicrous.

I should like now to deal with the question of what has already been spent by WoodsideBurmah on exploration. About $180m has been spent so far. In the long term probably about $ 1,200m will be spent by the time they produce but half of that will come back to the consortium by way of taxation concessions at the time of production. So the total cost to the consortium will be of the order of $600m. The Minister has said that on the present estimated reserves Woodside-Burmah has claimed for the north west shelf and on the price which the Australian Gas Light Company has agreed to pay Delhi-Santos in Gidgealpa, there is $6,000m worth of produce - for an outlay of $600m. In round terms that is a return of 1,000 per cent on investment - and that is acquiring the gas at the well-head. And the Opposition does not think that we are being fair by suggesting 1,000 per cent on investment. A guilt edged security returns 11 per cent or 12 per cent. A return of 1,000 per cent is more than the company deserves. What the company wants - and what all the conflict is about - is access to the export market. The Pacific Light and Power Corporation has had a representative sleuthing around this Parliament for months. The Japanese are here all the time trying to get natural gas for Japan. As the Minister said, we can export gas without cryogenic tankers. The Pacific Light and Power Corporation, through AGL, offered a price of 90c f.o.b. per 1,000 cubic feet at Sydney. The same would apply to Dampier and that is without any expense to the Government. There is $6,000m worth of natural gas at the 20c per 1,000 cubic feet Tate; that means that there is about a 5,000 per cent profit on export at a 90c rate. That money will come back to this Parliament thanks to one man and one man alone; and that is the Minister for Minerals and Energy.

The situation is that the Opposition believes that it has to secure that export right for the Woodside-Burmah consortium so that the enormous return on investment will go to a stock of multi-national corporations and not to the Commonwealth of Australia. That is really what is at issue. Now the Opposition says that there is no viability in running a pipeline down from Dampier to Palm Valley in central Western Australia. Let us have a look at that situation. As the Minister said, there is about 8 to 12 years supply of natural gas at Gidgealpa. As things stand, Sydney will have a demand consumption over that period of 2.8 trillion cubic feet, Adelaide in South Australia will have a demand of 1 trillion cubic feet, and the petro-chemical plants to be established on the north west shelf will have a demand of 0.4 trillion cubic feet. So the total demand will be 4.2 trillion cubic feet. The total reserves of the area amount to only 3.3 trillion cubic feet. The short fall in supply from Gidgealpa within that 8-year period will be 0.9 trillion cubic feet. What are we to do? Are we to wait for 8 years before we build a pipeline or should we build it now? Obviously the only thing to do is to build it now. That is why the Government sees the value of constructing this grid system linking the north west shelf to Sydney via Gidgealpa, the Pilbara and those great industrial complexes in the west.

Industries in the west also need to be considered. We are giving consideration not only to decentralisation but also to the industries in the west. Fifty per cent of the iron ore in Western Australia is in the form of dust, and when it goes into the blast furnace there is a loss of approximately 15 per cent. This iron ore dust needs to be pelletised before it can be blasted, and heat is required to pelletise it. There are no indigenous coals and there is no fuel in the Pilbara. There is no fuel around Kalgoorlie. There is no fuel in Perth. The fuel used has to be natural gas, and the only place it can be obtained is on the north west shelf. So this makes a mockery of any criticism that there is no need to build a grid. There has to be a grid and we are prepared to build it. The price of the gas will more than pay for its construction, and there will be a handsome return to the Commonwealth. The Minister for Minerals and Energy has said that when this project really comes on line in a few years time it will bring in such enormous profits to the Commonwealth that it may be possible to cut out some of the indirect taxes which are presently levied under our taxation system. If this is the case the grid will be one enormous national development project singlehandedly carried on by the Minister for Minerals and Energy who had to fight the Australian Gas Light Company for the right to build the start of this pipeline from Sydney to Gidgealpa.

What the Minister said tonight about the pipes is perfectly true. The Commonwealth has paid for those pipes and has deeds of title for them. They were imported by the

Australian Gas Light Company but the documents were transferred over to the Commonwealth when the pipes were delivered in Newcastle. So the fact of the matter is that we will build the pipeline and we will acquire the gas at the well head. People who have shares in Woodside-Burmah will get handsome returns on their investment. The Commonwealth will get a handsome return on its investment, but that return will go to all the people in Australia ad infinitum- or for as long as we have natural gas supplies. We have about a 5-year supply of indigenous crude oil in Australia. In a energy hungry world we are sitting in a good position, but as the national Government we are obliged to ensure that our domestic reserves are maintained. We are not prepared to say to any company that it can export until it is prepared to tell us what its reserves are. If these companies want to play the waiting game we will play it with them. If they want to be honest we will be honest with them. The position is as simple as that. Be that as it may, the Minister has said to these companies that as far as possible we will give them a fair price for the gas we buy. We can be no fairer than that. I compliment the Minister on his statement. It is a forthright statement. It advises the nation on the Government's energy policy, and I think it deserves the complete support of the House.

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