Chris Trevor (Flynn, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy and Minister for Tourism. Will the minister advise the House about the significance of the government’s decision today to share any long-term liability for the storage of CO2 from the Gorgon LNG project in Western Australia?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I thank the honourable member for Flynn for his question. In doing so, I indicate that he, like I, understands the importance of the LNG sector to Australia not only from an export point of view but also from a clean energy point of view. Historically, the LNG sector has been confined to the west coast of Australia and a small operation in the Northern Territory. The potential in the foreseeable future is also for a real industry on the east coast of Australia—hence the interest of the member for Flynn in the development of the LNG sector.

It is in that context that the Western Australian government has been working closely with the Australian government to secure the Gorgon LNG investment in Australia, a joint venture investment potentially of the order of $50 billion by Chevron, ExxonMobil and Shell. As the Prime Minister has said this afternoon, it is potentially the biggest single investment ever made in Australia. Not only is it important from an economic point of view in terms of domestic jobs and investment; it is also potentially a major export earner which creates wealth not only for the private sector in Australia but also for the Australian government.

On that note, I am pleased to say that the agreement between the Western Australian government and the Australian government also enables us to put in place the regulatory regime previously approved by this parliament which goes to the injection and storage of CO2, which is consistent with what we want to achieve in offshore waters. In that context, I express my appreciation for the opposition’s support in enabling that legislation to have passage through the lower house and the Senate over the last 12 months.

The project also represents a major step forward on clean energy. The House will recall that the Prime Minister has been responsible for putting in place the Global Carbon Capture and Storage Institute, which was well represented and welcomed by the meeting of G20 leaders in Italy not long ago. The Global Carbon Capture and Storage Institute has received considerable international support, with over 130 founding members and collaborating partners, including 23 national governments and over 100 companies. The reason it has received overwhelming support is the need for us, both domestically and internationally, to make real, practical progress on the clean energy front. Carbon capture and storage is central for Australia’s endeavours to move to a low-emissions economy, because of the importance of coal in guaranteeing our energy security.

I therefore remind the House that not only does the Gorgon project represent potentially one of the G8’s targets of 20 CCS projects to be in place by 2020; it also represents potentially the biggest commercial deployment of carbon capture and storage in the world, consistent with our endeavours and consistent with the endeavours and objectives of the G20, as laid out in their recent meeting in Italy. It is not only important from a clean energy point of view; it is also of vital importance to Australia as we make progress with respect to the challenge of the global financial crisis. I will simply say that, if everything goes well for Australia over the next 12 to 18 months, we could secure something in the order of $100 billion in LNG investments in Australia which create a good platform for job creation and wealth for the broader Australian community and also key revenue opportunities for government to do what is necessary on key fronts such as education, health, child care and transport—all those services that the Australian community expects that we provide.

This project represents practical endeavours to put in place jobs for the Australian community, investment revenue and exports. In essence, it is about wealth creation, something that the government often speaks about but that is little heard of on the other side of the House. Not only will the project itself deliver, domestically, something in the order of $300 billion worth of LNG to export markets in the form of export opportunities; it is also important for our energy security in Western Australia. It will deliver 150 terajoules per day of domestic gas into the Western Australian market no later than 2015, increasing competition and easing supply-side issues for the Western Australian community. On the jobs front, it represents about 6,000 jobs for Australians if we secure final investment before Christmas, with construction to start on Barrow Island prior to Christmas—an important stimulus not only for Western Australia but also for Australia at large. Take the Pluto project at the moment. One in four of those construction workers lives on the east coast. The Gorgon project not only represents, potentially, domestic construction jobs but also represents, potentially, major manufacturing opportunities and the capacity to increase Australian content in a major domestic investment.

In conclusion, I say that from the Australian community’s point of view it is right for the Australian government to work in cooperation with the Western Australian government and the private sector to secure one of the needs for this project going forward: resolving the issue of CO2 liability. It is also important in putting the project in place to have proper regard for the environmental considerations and the nature of Barrow Island. The project represents industrial scale technology of vital importance in taking forward the clean energy debate, and for Australia it is of fundamental importance for wealth creation, jobs and investment. It is a win-win on all fronts.