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Thursday, 2 November 1967

Mr CONNOR (Cunningham) - I move:

At the end of the clause add the following sub-clause: (2.) The Minister of State for the Territories may at any time add to any such licence, at the request of any person, corporation or statutory body not residing or functioning in the State adjoining the adjacent area, a condition setting the minimum proportion of the output of petroleum which must be offered for sale in any State other than such adjoining State.'

The text of the original clause 56 is as follows:

A licence may be granted subject to such conditions as the Designated Authority thinks fit and specifies in the licence.

The purpose of this amendment is to restore some basis of sanity, equity and fair play as between the Premier of Victoria and the consuming public of New South Wales. During the course of the second reading debate and also during the debate in Committee we have raised repeatedly the need for some protection against the obvious intention of the Premier of Victoria to do everything that he possibly can to impose upon the industries and consuming public of New South Wales a price structure of his own choosing, and literally to jockey himself into a position where he will be able to control the supply of natural gas to New South Wales. Apparently the Commonwealth Government is quite complacent about this.

The purpose of this amendment is quite simple. The continental shelf is under Commonwealth control; the Commonwealth has sovereign rights to explore and exploit it. At the point of production - and there is not the slightest doubt that production will come from the Esso-BHP wells - the gas is the property of the Commonwealth of Australia. It is for that reason that I have specified in the amendment that at the point of production, meaning on the continental shelf, a fixed proportion may be set aside - it is optional for the Minister - for sale in another State. No-one wants to suggest that the sovereign State of Victoria should be deprived of supplies of natural gas proper for its needs now or in the foreseeable future. But it has gone much beyond that stage. An official spokesman for Esso-BHP is reported in the 'Sydney Morning Herald' of 14th August last as having said:

There is no question of our reticulating gas in the areas.

He was referring to Sydney, Newcastle and Port Kembla. He said that his company would conduct feasibility studies as to whether it could wholesale gas at the city gate in Sydney. Of course, associated with that would be a supply to the Newcastle and Wollongong areas. But what is of the utmost importance is that the spokesman for the Esso-BHP group is also reported as having said:

The only natural gas is our own and there is sufficient to supply Sydney and Melbourne.

It is time that someone came into the ring to hold the scales between the rival parochial States. There is not an interstate commission, as provided in the Commonwealth Constitution. This is one case where we do think that the Minister for Territories (Mr Barnes), who is to be, willy-nilly, the designated authority in control of this Act, should come in and have the power to insert a clause where necessary to ensure that supplies of natural gas are available. I have already stated the reasons for the activity or the policy of Sir Henry Bolte. They are quite simple. Firstly, he wants to protect his own State's investment in the brown coal industry. This is done by the price structure he has devised. Of course, whilst you may swear by the book that a contract has not been entered into, letters of intent have in fact been exchanged and they provide for natural gas to be supplied to Victoria at a price, at the Melbourne city gate, of about 3.9c per therm. If to that is added the cost of transmission to Sydney - of course, the transmitting point of origin would be in the Sale area - it simply means that the areas of Sydney, Newcastle and Wollongong, which represent about 50% of the potential market for natural gas in Australia, would have to pay a price in excess of that which is being paid in Victoria, which has 30% to 35% of the potential Australian market. Because of the price structure designed by the Premier of Victoria, contrary to the advice of the Electricity Commission of Victoria and the Gas and Fuel Corporation of Victoria, the only protection that New South Wales had would be its sheer purchasing capacity. There is not the slightest doubt that in the open market a price can be negotiated directly between New South Wales and the producing company. The basis of the contract would be at the well head, right outside the control of Victoria. If Victoria attempted to interfere with the transaction on the grounds that a pipeline ran across its terrain, this would lead to litigation. In such a case undoubtedly the purchasing organisation in New South Wales, whoever it might be, would win. Incidentally, the price paid would be lower than that which Victoria has been forced to pay. In turn, this would be reflected undoubtedly by some renegotiation of the agreement in the case of Victoria. So, out of the whole business could come only good, although it could cause the Premier of Victoria frustration and humiliation. After all, this is a federation and members of this Parliament should take a national viewpoint, but I see a lot of little State.righters around. The Government is studded with them.

In considering the prospects of finding natural gas or oil on the continental shelf off the coast of New South Wales, we can examine statistics which show that the only holder of a permit for exploration off the New South Wales coast is the Shell Co. This company has a permit for an area of some 4,800 square miles. This is fractional compared with the holdings in the other States. As a matter of fact, the continental shelf off the New South Wales coast is very skimpy indeed. The situation is worse than crazy - I hesitate to use another word to describe it - when we see the Prime Minister (Mr Harold Holt) entering into an exchange of correspondence, which was tabled last February in this House, whereby he, of all people, undertook to ensure that in any sale of gas interstate, Victoria would not be placed at a price disadvantage as compared with another State. The dagger was aimed at the heart of New South Wales industries. It is a putrid, pathetic and paltry business. This amendment is drafted to correct this situation and if there are any big Australians in the ranks of the Government, they will come in and support the amendment.

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