Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Speech to the Queensland Resources Council.

Download PDFDownload PDF

Minister for Resources and Energy, Minister for Tourism



Good afternoon ladies and gentlemen and thank you for the opportunity to be with you today

It is a pleasure to be in Rockhampton.

And if I can start by donning my Tourism Minister’s cap - can I encourage visitors to this beautiful part of Queensland to get out and visit some of its wonderful attractions.

It will be time well spent.

Having said that, it gives me great pleasure to be with you this morning to discuss Australia's energy future.

It is a very challenging and exciting time to be Australia's Minister for Resources and Energy.

Our region’s insatiable thirst for energy means energy security is one of the big issues confronting Australia and the world today.

Access to energy resources is the key to continuing economic growth and the challenge of meeting global energy demand - in a sustainable way - is daunting.

Australia's place in the world in this debate is front and centre.

In May, I travelled to Rome, where I had the pleasure of being the first Australian Minister to attend a G8 Energy Ministers' Meeting.

As the world's largest exporter of coal, the second-largest exporter of uranium, and the 5th largest exporter of LNG, Australia is being recognised as an emerging energy superpower.

This is a sobering reality which brings both a responsibility to provide for our own energy security and an opportunity to help the Asia Pacific meet its rapidly-growing energy needs.

Australia has a central role to play in pulling our region out of recession.

There are presently 1.4 billion people in the world who do not have access to electricity.

As the developing nations of the world - led by China and India -modernise, demand for Australian resources and energy supplies will continue to grow.

RET Minister > The Hon Martin Ferguson AM MP

The Hon Martin Ferguson AM MP

20 Jul 2009

Page 1 of 6 Minister for Resources and Energy, Minister for Tourism


In a carbon-constrained economy, demand for Australian LNG and uranium will be most evident.

Gas is going to be a very important transition fuel in the coming decades, not only in Australia, but also on our doorstep in Asia.

In the context of energy security, climate change and economic recovery, further development of Australia’s LNG industry is one of my top priorities.

Western Australia’s Gorgon project alone could involve an investment of $50 billion dollars - bigger than the Federal Government’s recent stimulus package.

We also have the Pluto, Browse, Wheatstone, and Ichthys projects on the horizon.

But LNG is not an industry that will be limited to Australia’s north-west.

The coal seam gas industry has developed rapidly over the past five years and it now supplies about 85% of Queensland’s natural gas market.

This is a crucial part of the energy mix for eastern Australia and is supplying an increasing proportion of energy for both electrical generation and the residential and industrial sectors.

However, the domestic use of coal seam gas is only the tip of the iceberg.

The development of an LNG export industry based on coal seam gas is a natural extension of its rapid growth in Australia.

We could be the first in the world to export LNG produced from coal seam gas.

In Queensland, the partnering of local oil and gas companies such as Santos with experienced LNG players, including Petronas, BG Group, Shell and ConocoPhillips indicates there is real potential for an LNG industry for Queensland.

I cannot overstate the importance of this to the Queensland economy.

The benefit to regional communities in Queensland will be enormous, stimulating local economies and providing employment in difficult times.

For example, Shell recently stated that its Curtis Island proposal could employ 2,500 to 3,000 people during peak construction and between 250 and 300 people during operation.

The Government shares industry’s vision for a strong, internationally competitive LNG sector in this country.

In recent years we have seen the economic benefits from the growth of China and India.

The global recession has understandably affected growth in these economies, however there is no doubt they will continue to drive global growth and future global energy demand.

China’s LNG imports are forecast to double this year.

They are forecast to increase a further 50 per cent in 2010.

Australia is very well-placed to capitalise on this opportunity .

Page 2 of 6 Minister for Resources and Energy, Minister for Tourism


Similarly, concerns relating to energy security and climate change will drive growth in demand for Australian uranium.

While Australia itself does not need a domestic nuclear power industry, the Government does strongly support the expansion of Australian uranium mining.

Last week’s approval of the Four Mile uranium mine in South Australia is very welcome.

With South Australia’s Honeymoon mine expected to be commissioned in 2010, it is foreseeable that Australia will soon have five uranium mines in operation.

Not all countries are as fortunate as Australia when it comes to energy supply options.

Nuclear power will increasingly be used as a reliable base-load power supply in more than 30 nations.

Possessing more than a quarter of the world’s uranium, the Australian economy will reap the benefits of this growth.

There are many misconceptions relating to future energy mix and how it will change as we move to a carbon-constrained economy.

Australia is blessed with an abundance of energy sources which provides us with a range of energy options.

Renewables will grow in importance.

Australia is very fortunate to have diverse renewable energy resources.

Our recent Budget included $4.5 billion to support the growth of clean energy generation and new technologies.

Of this more than $1.3 billion was in new funding for the Solar Flagships program - which will position Australia as a world leader in this vital energy technology for the future.

This follows last year’s Budget’s inclusion of nearly half a million dollars to the Renewable Energy Demonstration Program.

I was very pleased by the strong response to this Program from companies developing wind, solar, geothermal, and wave technologies and I look forward to making funding announcements relating to this Program in the near future.

Growth in renewables will occur in Australia.

The Government has mandated that 20% of our electricity will come from renewables by 2020.

This, however, only underscores the importance of finding ways to reduce emissions from the other 80 per cent.

Coal is Australia's largest export and the primary fuel for around 80 per cent of Australia's current power supply.

It underpins the security, reliability and low cost of Australia’s electricity.

Page 3 of 6 Minister for Resources and Energy, Minister for Tourism


In turn, this supports the competitiveness of Australian industry.

While the importance of renewables will increase, coal and gas will continue to produce the bulk of our electricity.

Reliance on coal is set to increase far more dramatically globally.

In recent years, China has been adding nearly three times Australia’s entire grid capacity in new coal-fired generation - every year.

In the coming decade alone - China will bring on line something in the order of 1,000 average-sized coal-fired power stations.

This ladies and gentlemen, equates to 34 times Australia's grid-connected coal fired electricity capacity.

In just one country.

In just the next decade.

It is hard to comprehend.

But use of coal has to change in a world where CO2 emissions have a price.

Technologies capable of significantly reducing CO2 emissions from coal have to be found.

And like renewables - it will be several years until these technologies reach commercial-scale deployment.

This year’s Budget includes a $2.4 billion investment to accelerate low emissions coal technologies, including new funding of $2 billion in industrial-scale CCS projects under the Carbon Capture and Storage Flagships program.

And of course, the Government’s commitment to establish and fund the Global Carbon Capture and Storage Institute received global coverage last week when the Prime Minister outlined this initiative to world leaders in Italy.

The Institute’s CEO, Mr Nick Otter, will be speaking to you later today about this important work.

I would also like to take this opportunity to outline for you the work the Government is doing to support the coal industry - and our other important resource export sectors.

The value of Australian resources exports increased 46 per cent throughout 2008.

But much of this increase was built on surging commodity prices, rather than growth in production

Australia’s next generation of prosperity must be different to the last.

When global growth returns, it is crucial that Australia's resources sector can increase production accordingly.

It needs to e unshackled from capacity constraints.

Page 4 of 6 Minister for Resources and Energy, Minister for Tourism


The Government is building crucial export infrastructure.

We have delivered a Nation-building Budget that invests in roads, rail, and ports.

It is a Budget that supports jobs and positions Australia to take maximum advantage of the global recovery.

It includes:

o $580 million for Hunter Valley rail projects which will double coal-carrying capacity

o $339 million for critical common user infrastructure at Oakajee Port.

o $50 million for the proposed Darwin Port expansion

o $1.5 billion for Queensland road & rail projects

Investing in infrastructure has the twin benefit of pumping money into the economy to see us through the global recession; and giving you the tools needed to export efficiently at volume.

We are seeking to assist those companies which have the foresight to prepare now for global growth.

It is these companies which will be best positioned to reap the rewards.

But for the Queensland coal industry - there are other lucrative options to be explored.

The coming years will present enormous energy security challenges for Australia.

Australia last year had an $18.3 billion trade deficit in oil and condensate, which will continue to grow as production declines.

Australia today is oil poor but gas and coal rich.

Coal-to-liquids and gas-to-liquids can play a major role in Australia’s energy future.

And I am not the first Labor Resources Minister to hold that view.

Paul Keating, as a former Resources Minister, was a great advocate of CTL and GTL technologies more than a quarter of a century ago.

Back then, there was a lot of scepticism about this idea.

Today things are different.

The industry is real - and taking off - and ultra clean diesel is in the global marketplace.

The product is becoming highly sought after.

GTL plants in Qatar and Malaysia are supplying significant markets in Europe and Thailand and Shell is selling these diesel blends to over 3000 retail sites.

Of course - CTL is being developed right here in Queensland, at Chinchilla.

Page 5 of 6 Minister for Resources and Energy, Minister for Tourism


In conclusion ladies and gentlemen, can I say that forecast growth in global energy demand dictates that Australia - and our trading partners - will require a broad suite of energy options in the years ahead.

Coal, LNG, alternate fuels, uranium, wind, solar, and geothermal.

These are not competing alternatives.

If the energy supplies of Australia and our trading partners are to remain secure, then each and every one of these energy resources must be developed as fast as possible.

I look forward to working with you toward this goal.

Top of page

Page 6 of 6 Minister for Resources and Energy, Minister for Tourism