Senate debates

Thursday, 7 September 2006

Committees

Rural and Regional Affairs and Transport References Committee; Interim Report

10:45 am

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise to comment on the interim report of the Rural and Regional Affairs and Transport References Committee inquiry into Australia’s future oil supply and alternative transport fuels. I am absolutely delighted with the way this inquiry has proceeded. When I moved for this inquiry last year it was because, from the minute I got into the Senate, it was apparent to me that no thinking is going on at the highest levels of government about the fact that the world is facing a convergence of two megaproblems that we have not faced before: global warming—climate change—and oil depletion. We are facing these problems at the same time and there is absolutely no thinking going on in Australia about how we take on our global responsibilities, mitigate climate change to stop it from getting worse, adapt to climate change and, at the same time, adapt to oil depletion.

I moved for this Senate inquiry to get some thinking going on Australia’s future oil supply—where we are going to get our transport fuels from—and to make sure that, in thinking about alternatives, we do not make the greenhouse gas problem, the global warming problem, worse. We moved for this inquiry, and I am delighted that it was supported in this chamber. We have had 192 submissions. I would argue that the inquiry has raised a great deal of interest in the Australian community about what is going to happen in Australia in the future.

It is timely to recognise that, on Geoscience Australia’s figures, over the next 20 years Australia’s self-sufficiency in oil and petroleum will decline from 84 per cent to 20 per cent. I would argue that that is a very optimistic figure. Globally, we are facing the end of the age of cheap, plentiful and easily accessible oil. Australia’s self-sufficiency in oil is running down at a very fast rate. That means Australia will have to import oil and be subjected to higher and higher global oil prices.

Those who believe in the operation of the free market, including some of the agencies that came before the inquiry, say: ‘That’s all right. Australia will just buy oil on the international market.’ ABARE argues that we can just go out and buy oil, at whatever high price, and that it is not going to make much difference to us, because we will also be exporting energy in the form of gas, and the high prices we will be getting for it will offset the high price we have to pay for oil. This argument takes no account of the depleted global supply and the fact that Australia is busy selling off our major transition transport fuel—gas—to China and other places on long-term contracts. That is why the Premier of Western Australia has moved to establish a gas reserve. I am delighted that the committee has decided that Australia should have a national gas reserve.

The other thing that came out very clearly is that there is no thinking at the highest levels of government about the need to reduce our dependence on oil. Sweden moved for an oil commission tasked with finding out how Sweden could reduce its exposure to world prices in the future and, at the same time, reduce greenhouse emissions. They came up with a plan to make Sweden oil free by 2020. Whether or not they achieve that is not the point. The point is that, by establishing that goal, they are now investing in a whole lot of alternative technologies that might get them there.

In Australia, what we have found from talking to a number of people who have come before the inquiry is that all this talk about trying to have just a marginal change in the price of petrol does not address the fact that we need to redesign Australian cities to make them less car dependent. We have to invest heavily in public transport—that was an overwhelming response from the inquiry. We need more bicycle lanes and much better public transport, not only to make us less car dependent but also to address obesity. There are lots of issues this would address. It would reduce city congestion, improve air quality, improve the health of Australians and make our cities more livable and efficient. If Sydney and Melbourne want to be regarded globally as competitive international cities, they are going to have to have much better public transport than they currently have.

A social justice issue that emerged very clearly is that the poorest people generally live furthest from the centre of the city in the areas least well served by public transport. The upshot is that those people are going to suffer the double whammy of higher interest rates and higher petrol prices—and they often have the oldest and least fuel-efficient vehicles; that has been mapped quite clearly. That is why we need to be thinking about redesigning cities.

I must say that my colleague from Western Australia, Senator Siewert, the chair of the committee, was not expressing a bias when she said there was overwhelming evidence congratulating Western Australia. Western Australia came out of this inquiry very well, because it has seriously started to address these issues. That is because Western Australia has a vibrant NGO sector, which is looking at transport issues, an engaged academic sector and a state government that is prepared to listen. Western Australia has invested heavily, without Commonwealth help, in public transport—the railway system in Perth. At the same time, they have invested heavily in alternative fuels—and I congratulate them for that.

We need a combined effort. We need to reduce our oil dependency by investing in public transport and redesigning our cities. At the same time, we need to have vehicles that are more fuel efficient—and mandatory fuel efficiency standards are an absolutely sensible option. Another strand to this is that we need to invest heavily in alternative fuels.

If you look at the Australian car fleet, you find that Holden and Ford are becoming increasingly uncompetitive. If you look at the private vehicle fleet, you find that people have moved to smaller, fuel-efficient vehicles. It is the fleets that are using Holden and Ford—the big six-cylinder vehicles—because the drivers are not paying for the fuel; it is on the fleet.

One thing that came up very strongly was that we need to get rid of the fringe benefits tax, which encourages people to use their vehicles more. One of the recommendations has been that we should look at a way of using concessionary approaches to assist employers to make available public transport options instead of the fringe benefits tax.

Another clear thing that came out of this concerned the role of ABARE. I think that all the evidence we have before us shows that they are out on their own. Nobody takes them seriously anymore, except the government. It would be laughable—and people did laugh about ABARE’s predictions about future oil prices—if it were not so serious. But the tragedy for Australia is that ABARE advises government and that advice is the basis on which AusLink makes its projections about interstate transport. As a result, they are building more and more freeways instead of getting into upgrading the railway network and the internodal transport connections that we need. It is a tragedy for this country that they have got it so wrong. And why have they got it so wrong? Because they are relying on going to coal to liquids. They are saying: ‘There’s no problem. If we run out of oil, we’ve got plenty of coal; we’ll just liquefy coal.’

The point I made at the beginning, and which I return to now, is that coal to liquids is not an option for Australia if you are serious about addressing global warming. In this inquiry it came out very strongly that, to achieve even exactly the same oil emissions as we have now from coal to liquids, you have to have geosequestration. So, in other words, we have to spend millions on geosequestration to achieve tailpipe emissions from coal to liquids exactly the same as those from conventional oil. That is not acceptable.

We should be investing in ethanol, particularly lignocellulose. That, again, is where Western Australia is leading the way. I would argue—and this is not a committee recommendation but it certainly came out of the evidence as far as I am concerned—that we should switch all of the investment we are currently putting into coal to liquids across to lignocellulose. That would have the benefit of improving salinity and biodiversity. If you went with the mallee, as they have done in Western Australia, you would get the biodiversity and the salinity outcomes you want, you would produce an oil which could be used to make biodiesel and you would have a biomass which could then be converted, via lignocellulose, to ethanol. Going down that path would be a fantastic option for Australia, which would have many benefits. I seek leave to continue my remarks later.

Leave granted; debate adjourned.

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