Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Primary Industries, Resources, Forestry and Tourism) Share this | Hansard source

is just how interested in fuel security the Prime Minister was, back then in 1979, compared with his complete lack of interest today as Prime Minister, when fuel security has never been so important and petrol prices have never been so high. As I have said before, this government treats tax cuts as go-away money for motorists worried about petrol prices.

I therefore remind the House of some facts I have raised many times in this place. The fact is that, without developing large-scale alternative fuels industries in Australia, we will increasingly be hostage to supplies from the Middle East, West Africa and Russia. This is the debate about security. I do not need to spell out the implications of that fact for energy security and for the security of Australia’s economic future. Australians around the kitchen table each night want to know that their governments and the companies with stewardship of their resources have a plan to secure their energy supplies for the future at prices affordable to Australians.

I raise this because it is important. At the moment there is no plan. Unlike Uncle Arthur would have them believe, they should be relaxed and comfortable. Have we heard the Prime Minister talking about being relaxed and comfortable? They are not relaxed and comfortable about our energy future. Creating the right fiscal and regulatory regime to convert our natural gas and coal to clean diesel as a new industry option and a new fuel supply source for Australia is unfortunately not on the Howard government’s radar. Mr Howard was thinking about it, interestingly, in 1979, but it is not on his radar in 2006 when he is the Prime Minister and it is more important. Unlike with other alternative fuels, the Prime Minister has done nothing to provide any industry framework to encourage the establishment of industries in Australia to convert our vast local coal and gas resources to clean diesel. This is the future debate. This is the key to transport security in terms of energy in the future.

Alternatively, the Labor Party has always been a great supporter of both gas to liquids and coal to liquids, which is integral to the commercialisation of clean coal technology for power generation in Australia and which is part of the environmental debate. We actually achieve on both fronts—energy security and environmental progress. I recall that a former Prime Minister, Paul Keating, as resources minister, was a great advocate of gas- and coal-to-liquids technologies. That was more than 20 years ago. This is a debate that has been ongoing. It is about time the Howard government actually got serious about it.

My colleague the member for Hunter was also a great advocate when he was shadow minister for resources in the last parliament—and we continue this tradition because we believe that establishing new nation-building industries is not easy and requires, more than anything, sustained leadership and focus at a national level. For that reason, over the last couple of weeks I have had the pleasure of dealing with two innovative proposals in the private sector, both looking at coal gasification and conversion to diesel, one in Queensland and the other in the Latrobe Valley in Victoria. Unfortunately, the Howard government has waxed and waned on both coal to liquids and gas to liquids. It should pick up the challenge and run with it.

Once again, let me remind the House that it is now almost five years since Senator Minchin, then minister for resources, appointed a GTL task force to investigate the feasibility and benefits of establishing a GTL industry in Australia. Five years later, no action has been taken. I suppose that is why the member for Hunter once said that in John Howard’s mind it is easier to get gas to Shanghai than to Sydney. That says it all: export it; do not worry about our own local economy. John Howard is happy to dig it up, ship it out and look after Japan, China and the United States. He guarantees their resource and energy security, but when it comes to Australia he has no plan for our energy security and our economic future.

I simply say to the Prime Minister that he needs an industry policy, a resources policy and an energy policy. We can no longer wait. Those policies will have to give us large-scale options to reduce our reliance on foreign oil. This is pretty interesting. I think it is what Australians actually believe. We cannot rely on foreign oil if the Strait of Hormuz is closed, if the Alaskan pipeline has to be fully shut down, if war escalates in the Middle East or if civil unrest shuts down West African production. GTL is the best option. It is about time the Prime Minister took up the challenge laid down by the Leader of the Opposition in October last year about the importance and urgency of this debate.

The Prime Minister’s own GTL task force noted that, while Australia could simply wait for the market to provide an incentive for a GTL industry, once gas supply infrastructure is in place and investment is sunk in other countries—not in Australia—where taxation and infrastructure incentives are on offer today, those countries will serve as investment hubs for expansion for years to come. Unfortunately, that is what is happening in Qatar at the moment while the Prime Minister is asleep on his watch.

The implication from the task force’s review was that Australia’s remote gas fields could be left stranded from markets for even longer because, by and large, it will be cheaper to expand existing projects than to build new ones here. It is about economies of scale. I am sure this is a concept Australia’s LNG industry fully understands.

The task force also highlighted the potential significance of a GTL industry to Australia’s economy, saying that it could underwrite offshore gas supply infrastructure to bring forward the possibility of further major new domestic gas pipelines to connect the national market, increase domestic gas competition and energise gas exploration. That is an interesting challenge, one the Labor Party would love to have the opportunity to implement. That is why it is going to be an ongoing debate between now and the next election. This debate can no longer be put off. The task force also said, and this is the crux of the debate:

These benefits would be of national strategic significance to Australia.

It went on to say this, and perhaps the Prime Minister should revisit the report:

The cost of any government intervention must be considered against the potential benefits.

That is simply saying that if you invest now you get the return in the future in terms of competitive energy supply in Australia, which is the key to our future. That is what attracts investment to Australia—a stable economy, stable government and energy at a reasonable price and with security of supply. The potential benefits go beyond unlocking new resources. They go beyond wealth and creating new industry, more jobs and more exports. They include the opportunity for Australia to address our most pressing problem, our future transport fuel security challenge.

It is also three years since CSIRO’s report Energy and Transport Sector Outlook to 2020 laid out its proposed strategy for Australia’s transport future—a strategy that identified gas to liquids and coal to liquids as the keys to our future transport fuel security. The tragedy is that we all appreciate the potential but the reality remains just beyond the Howard government’s grasp. It requires sustained and committed national leadership. It requires that we review the PRRT regime and consider special treatment of capital investment in gas to liquids fuel projects and associated gas production infrastructure. It requires that we have some responsibility for resource related infrastructure instead of simply saying that it is a state responsibility. Above all, it requires that the Howard government should send a clear signal to Australians that it is interested in their future fuel supply security. We should send that clear signal.

So on that basis, in order to bring this debate to a head, I will have pleasure in moving the second reading amendment circulated in my name calling on the government to immediately conduct a feasibility study into a gas-to-liquids plant in Australia. The Prime Minister needs to dust off his 2001 report, bring it up to date, move on the implementation and make it a reality. I also call on the government to review, in 2009, the proposal to introduce excise on ethanol and biodiesel, LPG and CNG in 2011 and to consider whether or not there is a case for deferring the introduction of excise depending on industry progress. I think this is a matter of such public importance that the department should report to parliament, in the period commencing next year, on the measures taken and the progress made to wean Australia off foreign oil dependence. Such a review would keep the pressure on parliament and decision makers. It would be on the uptake of alternative fuels. We have got to be serious about the implementation, given the issues raised in the opposition’s blueprint.

I simply say in conclusion, before moving the second reading amendment, that the government ought to be criticised for its tardiness in moving on petrol retail reform, for bypassing the parliamentary process in taking companies out of the sites act, for failing to announce amendments to the Trade Practices Act to implement the 2003 Dawson and 2004 Senate committee reports and, above all—and this is the crux of the debate—for failing abjectly to take action to reduce Australia’s dependence on foreign oil. I now move the second reading amendment standing in my name:

That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading, the House:

(1)

calls on the Government to require the Department of Industry, Tourism and Resources to report to the Parliament annually, commencing in August 2007, on the measures taken and the progress made to:

(a)

increase market penetration of ethanol and biodiesel, LPG and CNG, including the number and location of service stations and the names of the companies offering these products on their retail sites;

(b)

secure new investment in biofuel, LPG and CNG production and supply infrastructure in Australia; and

(c)

secure investment in new alternative transport fuel industries in Australia, including gas and coal to liquids;

(2)

calls on the Government to review, in 2009, the proposal to introduce excise on ethanol and biodiesel, LPG and CNG in 2011, and consider whether or not there is a case for delaying the introduction of excise, depending on the progress made:

(a)

in increasing market penetration of biofuels, LPG and CNG;

(b)

in securing new investment in biofuel, LPG and CNG production and supply infrastructure in Australia; and

(c)

towards achieving the 350 million litre biofuels target in 2010.

(3)

criticises the Government for:

(a)

its tardiness in moving on petrol retail reform;

(b)

bypassing due parliamentary process in introducing a regulation to “undeclare” companies under the Sites Act;

(c)

failing to introduce amendments to the TPA to implement the 2003 Dawson and 2004 Senate recommendations for reform; and

(d)

failing to act to reduce Australia’s dependence on foreign oil and improve its transport fuel security;

(4)

calls on the Government to immediately conduct a feasibility study into a gas to liquids fuels plant in Australia, including:

(a)

consideration of Petroleum Resources Rent tax incentives for developers of gas fields which provide resources for gas to liquid fuels projects;

(b)

examining a new infrastructure investment allowance for investment in Australian gas to liquids infrastructure; and

(c)

developing a targeted funding scheme for research and development in this area;

(5)

calls on the Government to immediately embrace Labor’s Fuels Blueprint proposal to:

(a)

make alternative fuel vehicles tariff free, cutting up to $2000 off the price of current hybrid cars; and

(b)

grant tax rebates for converting petrol cars to LPG; and

(6)

calls on the Government to immediately embrace Labor’s Fuels Blueprint to find more oil and use more gas by;

(a)

re-examining the depreciation regime for gas production infrastructure;

(b)

allowing the selective use of flow-through share schemes for smaller operators”.

(Time expired)

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