Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Hansard source

The debate on the Appropriation Bill (No. 3) 2015-2016 and the Appropriation Bill (No. 4) 2015-2016 gives me a wonderful opportunity to talk about Northern Australia and the importance of Northern Australia not just for Australia's budget bottom line but for the social and economic wellbeing of our whole nation. Northern Australia is not simply the home of our big export cattle herd. It is also the home of our oil and gas industry and our prodigious and greatly capable iron ore and coalmining industries. It is, in so many ways, the economic engine room of our nation.

In the past decade we have seen investment in the resources sector of Northern Australia eclipse even the modern-scale equivalent of the Marshall Plan—which was an investment program to help Europe recover from the devastating impacts of World War II. What we effectively saw in our resources sector over the past decade was a scale of investment some four times bigger than the Marshall Plan, and that investment was carried out in one single sector of our economy, in the resources sector. We built massive capability in iron ore exports, in port facilities, in rail facilities, in coal exports and in oil and gas in particular. Indeed, this year we will see coming into location the Icthys central processing facility and the Icthys floating production, storage and offtake facility. Both of those facilities, in and of themselves, are impressive. But when hooked up to one of the world's largest subsea pipelines, some 500 miles long and 42 inches in diameter, running from the Icthys field into Darwin, we have revealed the most significant resources investment in one sector in one project than can even be comprehended. In many ways, that single investment is the world's largest-ever single financed project. It is financed by bankers around the world—$20 billion of it privately-raised finance—in order to make that project work. On many occasions I am caused to think that the engineering of the central processing facility itself is impressive. The engineering of the third-longest subsea pipeline, at 42 inches in diameter and 800 kilometres long, is, in and of itself, impressive. But the financial engineering that underpins that project is simply staggering.

In the course of the next 40 years that project will generate jobs that will be generational in their impact on our communities, particularly through the Kimberley and through Darwin. That project alone will generate business in the order of $100 million a year, and that is before we discuss the start-up that will happen in coming months at Gorgon, the world's largest geosequestration project, that will happen at Curtis Island when Curtis Island is in full production, and that will happen as we move into enhanced production from our existing iron ore capacity.

The story does not end in hard commodities and oil and gas. The story continues when we look at the great potential of Northern Australia for food and protein production. Out of Wyndham in the north of Western Australia we may well see one of the world's great seafood production operations commence, Project Sea Dragon. One would hope that, in the next few years, that project will produce prawns for a North Asian market, bringing into productive use lands around Wyndham, generating local wealth, jobs and opportunities for West Australians and also generating opportunities for Aboriginal people who live in the East Kimberley. It will also generate an export income that is both sustainable and highly valuable into the next decade or three or four.

Underpinning much of this is the optimism that Australians necessarily and instinctively feel about Northern Australia. Within that optimism there is kind of a traditional craziness. A view that all that land and all that water must eventually be turned to some great productive use often causes us in this place to focus on building dams. And building dams is not what it is all about. Building water impoundments can be useful. Water impoundments can control water run-off in tropical environments that can be important. Building water impoundments to store water for future use can be extremely valuable, but sometimes the uses need to be purpose designed, and we are seeing some thoughtful work being done in this area that may well be a key to good finishing-off crops that will help our billion-dollar northern cattle herd but also some interesting opportunities in horticulture as well.

In a previous parliament as a parliamentary secretary for northern Australia, I oversaw the investment in the Ord stage 2. Ord stage 2 saw a total investment from state and Commonwealth governments of in excess of $500 million. But one of the really interesting developments in horticulture in Northern Australia is actually south of Darwin, where there is very little Commonwealth or Territory money. That investment is to support the horticulture that is driven by Cambodian and Vietnamese horticulturalists and families, who make their businesses work through the sweat of their brow, the incredible energy that they bring and their willingness to find creative crops and willing markets. So okra production out of an area south of Darwin finds its way into markets in Melbourne within days of being picked, and finds itself in a situation where growth and opportunity is available to it, providing opportunity and economic security to the families that are driving those businesses in the horticultural districts south of Darwin.

One of the terrific things about this is that we see pure entrepreneurial spirit being invested to drive opportunities in northern Australia. It does not all need to come from a multibillion dollar damn-building project from the Commonwealth government or from a state government—clearing land, laser-levelling fields in order to, as we used to say, build a field and he will come. Sometimes what we are seeing is pure entrepreneurial spirit driving opportunities, creating wealth, defining markets and sustainably generating products.

In recent months in the Northern Territory, we have seen a range of decisions made by political parties around fracking and around gas production from onshore opportunities. Hydraulic fracturing has been used in the Northern Territory for more than 40 years. Hydraulic fracturing involves injecting water, sand and relatively small amounts of chemicals into rocks and creating fractures that allow gas to flow to the surface. This technology can unlock significant additional gas resources and generate low-carbon energy, jobs, wealth and opportunity not just in the Northern Territory but across northern Australia.

At a Katherine regional mining exploration forum that I recently attended, I discussed the science of hydraulic fracturing with engaged community members. Regrettably, good science has been missing from the misinformation and scaremongering that have ignited concerns about fracturing. Good science by the Obama administration's Environmental Protection Agency, the New South Wales's chief scientist, who was recently named in the New Year's Honours list and Geoscience Australia and Dr Allan Hawke, the Territory's special adviser on fracturing, show that hydraulic fracturing can be and is being managed safely. Of course, as we expect in Australia, the risks of fracturing must be managed through robust risk and environmental impact assessments and continued environmental management and monitoring. Regulation plays an important part and Australia has some of the best environmental regulations in the world.

In Queensland, the most comprehensive water monitoring program in Australia, if not the world, is regulated by Queensland and federal government environmental agencies to ensure that fracturing and gas extraction have no unacceptable impacts. This program in Queensland involves hundreds of monitoring bores and will most likely contribute even more to our scientific understanding of the Great Artesian Basin. It will contribute more in one decade than we have learned about the Great Artesian Basin in the past century. Queensland gas companies have also invested significant funds to treat the salty water that they extract and which otherwise would not be used. They are either re-injecting fresh water into shallow aquifers or virtually giving it away to farmers for irrigation and to local towns for domestic use.

Queensland has more than 5,000 land use agreements across northern Queensland and through the Surat Basin with local farmers. These land use agreements have supported local towns and those local towns have embraced the benefits of the gas industry. It is not impossible to see those benefits being delivered to the community of Katherine, if the community of Katherine would embrace the opportunity available to it through the resource that is available quite close to Katherine.

In similar fashion, of course, developing the Territory's large shale gas resources through the use of hydraulic fracturing could generate new long-term jobs in any number of remote and regional communities. It could create new businesses, improve regional infrastructure and generate increased royalties to the government of the Northern Territory. Just because science and economics are on the side of fracturing, it does not however remove a broader industry obligation to listen to communities, to properly address their concerns and to build a better understanding of the business of fracturing.

It is accepted that a strong regulatory regime is vital to effectively managing environmental risk. But there is a broader social licence that needs to be earned for the gas extraction sector to be successful in northern Australia. While governments can implement strong regulation to effectively manage environmental risks, only the industry can earn acceptance of what they do.

I am pleased to hear about recent independently run discussions on fracturing such as those that have been organised by the Darwin rural community forums. Companies in the Territory's onshore gas industry do need to contribute to these forums to explain their practices and their potential benefits. But in a world of 140-character arguments and publicity stunts and ideological campaigning, companies need to return to the field of public debate and engage in the kitchens and cattle yards of their neighbours and hosts. Eventually, common sense and the reasonableness of communities wins out and they feel that they understand the benefits and the risks of hydraulic fracturing, and are confident that companies and governments can manage and regulate those risks. This is happening in Queensland. It can happen in the Northern Territory, with the same outstanding beneficial outcomes.

In coming days, on Curtis Island we will see an official event to mark the start-up of the APLNG LNG production facility, taking coal seam gas out of the Surat Basin, converting it to highly energy efficient, sophisticated, elaborately transformed manufactured goods called liquefied natural gas, and exporting that gas for use in industry in North Asia. It is a truly virtuous cycle—taking a resource, making that resource so energy intensive that within weeks of its extraction from the Surat Basin it can be driving industry in Korea, Japan and China. It can be warming homes and cooling food. It can be driving wealth creation thousands of kilometres away from its point of extraction. It also supports outstanding living standards in the towns and regions of North Queensland.

So we see across northern Australia wonderful opportunities that come from our horticulture, from our agriculture and from our resource exploitation. We also see that resource industry under incredible stress at the moment. Price pressure in global markets has placed nickel under immense pressure and has closed many nickel mines. I think of one in the Kimberley, where the Panoramic Resources Savannah nickel asset is in the process of being mothballed, and close to 400 workers are being laid off as a consequence of that necessary economic measure.

Amidst the closures that happen in coalmining districts and iron ore mining districts I also see companies preparing to become so productive and so capable that, when eventually the commodity cycle turns back—and it will—these firms will become global powerhouses of economic opportunity that will benefit not only northern Australia but our whole region. The productivity gain that we are already seeing in iron ore, in oil and gas, and in coal is making our principal providers of these commodities very power commodities in the global marketplace. We will see them joined in the future by those firms that engage in protein production and horticultural production—making northern Australia the province that we know it can be, driving wealth and generating opportunity across our continent for the benefit not only of the people who live in northern Australia but of all of us who live in Australia.

See this speech in context