George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate Senator O’Brien’s speech on the second reading.

Leave granted.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

The incorporated speech read as follows—

The Labor Party welcomes this bill.

It does, after all, implement the policy that the Federal Labor Party and my colleague, the member for Hunter, took to the 2004 election, and I quote:

“In natural gas, industry remains engaged in battle with the ACCC over a range of regulatory issues. Australia still lacks all the necessary ingredients for the development of a mature and fully competitive gas market and yet again, Parer’s recommendations have been ignored.

No initiatives have been taken to tackle the various barriers to enhancing upstream competition and nothing has been done to address regulatory risk, whether real or perceived. ... Labor will retain a strong Gas Code but, consistent with the Parer Review, will pursue two significant changes to provide greater certainty for new investors. We will provide for binding and up front coverage rulings and binding up front agreements locking in key regulatory parameters for extended and agreed periods of time.”

But this bill has been a long time in coming and it still does not go far enough in implementing the many energy market reform measures that still remain outstanding.

The bill will amend Part IIIA of the Trade Practices Act 1974 to provide new incentives for investment in gas pipelines, or more accurately, to remove existing barriers to investment.

There are two mechanisms.

The first is an ability to obtain an upfront ruling on whether full price regulation in the gas access regime should apply to a new pipeline.

If a pipeline does not meet the coverage criteria, it will be granted a full exemption for 15 years—called a binding no-coverage ruling.

The second mechanism is a price regulation exemption, also for 15 years, for new pipelines bringing foreign natural gas to Australian markets, subject to certain obligations.

Both mechanisms involve a prior competition and public interest assessment by the National Competition Council before a final Ministerial decision can be made, and that is a sound accountability mechanism.

They are welcome mechanisms to encourage investment in gas supply and gas transmission infrastructure for Australia’s future.

And they are much needed.

Australia is a gas rich nation with over 140 trillion cubic feet of known reserves and we have been finding gas faster than we have produced it for the last 20 years.

But most of it is remote from markets.

Ninety five per cent of Australia’s natural gas resources are in the remote northwest, but 90% of Australia’s population live on the eastern seaboard and most of the country’s energy-intensive job-creating industries are in the southwest and the east.

I can’t put it more starkly than that.

That is why we need to be thinking about strategic national energy infrastructure today and promoting investment in things like natural gas transmission.

Natural gas is also the best transition fuel for a lower carbon economy with proven reserves more than capable of meeting the nation’s energy growth needs over the next few decades.

We have to get more of it into the energy mix, along with renewables and cleaner coal.

That means:

• Enhancing the competitiveness of gas in the domestic market;
• Achieving greater interconnection of major supply and demand hubs; and
• Expanding domestic gas markets in electricity generation, process energy, gas to liquids and chemicals.

The opening up of new markets for natural gas is critical to underpin the development of remote gas production, processing and pipeline infrastructure for future gas supply security.

Without investment in that infrastructure today, Australia’s gas resources could be too expensive to get to market in the future and be locked away forever or destined only for export markets as LNG.

In Mr Howard’s Australia it’s commercial to get gas to Shanghai but not to Darwin or Sydney.

Nor can we assume that gas exports will necessarily create additional domestic industries or energy infrastructure.

More needs to be done to develop value-adding gas chemicals and gas-to-liquids industries and expand domestic gas infrastructure to complement the LNG industry.

Australia’s competitors in the global gas market, like Qatar, are way ahead of us already.

How do we address this?

Well, this bill goes some of the way towards removing the impediments to increased investment in interconnection and barriers to gas-on-gas competition.

The private sector now owns the majority of Australia’s gas transmission pipelines and substantial private sector investment will be required over the next decade and beyond.

It is in our national interest to encourage, not deter, this investment and that is why the provisions of this bill are welcome.

Whilst pipeline infrastructure developed since the last 1990s (Eastern Gas and SEAGas) ensured continuity of gas supply following the Moomba incident, it is clear that more could and should be done to facilitate linkage of uncommitted gas supplies to markets, improving security and reliability of supply as well as encouraging gas-on-gas competition.

The absence of a carbon price signal is also undermining the competitiveness of gas, thereby holding back demand and investment, and forcing regulatory intervention.

Consequently, in this looming crisis, Labor accepts the need to provide greater certainty for investors as gas plays catch-up in the market.

Regulatory burdens are growing not shrinking, and competition regulators are under increasing pressure to provide long-term income-guarantees for infrastructure investors.

The existing cooperative gas access regime has created barriers to efficient investment in new pipeline infrastructure and this bill will encourage more efficient investment and provide investors with regulatory certainty.

The bill also recognises the additional complexity of international gas infrastructure projects like the PNG gas pipeline and provides investors with regulatory certainty.

Both mechanisms will have a positive impact on securing investment in gas pipeline infrastructure for Australia’s long term energy security needs.

But as I said before, energy market reform is happening too slowly. Let’s look at where COAG has got to so far this year.

Whilst the commitment to progressive national roll out of smart meters from 2007 is to be commended, it is heavily qualified and only time will tell whether the initiative is truly national.

Beyond that, we are promised a recommitment to earlier COAG reform proposals and a new “high level, expert” Energy Reform Implementation Group.

This new committee is due to report back to COAG before the end of 2006 on a range of energy market issues including options for a national grid, structural weaknesses in the electricity market, and financial market measures to support energy markets.

What the communique doesn’t say is that this new committee is the Prime Minister’s latest attempt to address the inertia of his energy Minister, the Ministerial Council of Energy, and the National Electricity Market Ministers Forum on real energy policy issues.

They have done virtually nothing over the last almost five years.

The fact is we are no further advanced on national energy market reform than we were when the Parer review was announced in June 2001 along with the establishment of the MCE and NEM.

The Parer review was released in December 2002 and only a handful of its recommendations have ever been implemented.

It was August 2004 when the Productivity Commission Review of the Gas Access Regime was released and COAG now promises us a response by the end of 2006—a full two and a half years later.

After Parer in 2002, it took until July 2004, with legislation introduced in mid June 2004 at the eleventh hour, to set up the Australian Energy Regulator and the Australian Energy Market Commission, and then it took another year to agree on who would head it, where it would be located, and how it would interface with the ACCC, with operations not actually commencing until July 2005.

This government’s answer to the problem is to go back to June 2001 and make the same mistakes again—a new national body, a review of the same issues, and still no action or leadership.

That’s what is really needed—action and national leadership. Well over a year ago I said, and I’ve said it many times since:

“Internationally competitive supplies of energy are critical to Australia’s global competitiveness in a range of manufacturing and value adding industries and while the success of the reforms of the 1990s cannot be denied, nor can the fact that much more needs to be done.

COAG recognised this by commissioning the Parer Report, but little action has been taken by this government.

The Parer report identified all the deficiencies in our energy markets but barely any of its recommendations have been implemented.

Our electricity and gas sectors remain burdened by excessive regulation, overlaps in regulatory roles, slow and cumbersome code change processes, anti-competitive marketing practices, poor market design and poor, if any, planning mechanisms.

It’s time for this government to get moving on both the Parer recommendations and the Productivity Commission recommendations.”

And I recall that my colleague, the member for Hunter, also said this many times during the course of the last Parliament when he was the Shadow Minister responsible for energy.

Let me say that one of the biggest issues for the natural gas industry is the expansion of its markets.

And this is a big issue for Australians too because natural gas is part of the answer to their concerns about petrol prices and supply security.

Of course the government is out of touch with the triple whammy facing Australians around the kitchen table these days—higher interest rates and mortgage payments, industrial relations changes undermining their wages and conditions, and record high petrol prices.

This government treats tax cuts as “go away” money for motorists worried about petrol prices.

It did nothing in the budget to bolster Australia’s fuel supply security or look to the long term.

And it has done nothing in this bill.

The fact is that without developing alternative fuels industries in Australia, we will increasingly be hostage to supplies from the Middle East, West Africa and Russia.

I don’t need to spell out the implications of that for energy security.

Australians 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 affordable prices.

But there is no plan and they are far from “relaxed and comfortable” about that.

The Howard government has failed Australians by letting the opportunity pass to create the right fiscal and regulatory environment to make gas to liquids a new industry option and a new fuel supply source for Australia.

The answers are there for Mr Howard and Treasurer Costello in Kim Beazley’s Fuels Blueprint just as they were on gas pipeline investment in Labor’s 2004 election policy.

If the government was serious about the gas industry and gas market reform, they could have seriously reviewed the PRRT regime and considered special treatment of capital investment in gas to liquids fuel projects and associated gas production infrastructure.

The Commonwealth could have faced up to some responsibility for resource related infrastructure instead of passing the buck to the States.

Above all, they could have sent a clear signal to Australians that they are interested in their future fuel supply security and to the industry that this should be part of Australia’s national gas strategy.

Australia’s competitors in the gas industry are way ahead of us, particularly in the Middle East where countries like Qatar, already a formidable competitor for the Australian LNG industry, are developing GTL projects making clean transport fuels for the global market.

It is now almost five years since the government’s own GTL Task Force highlighted the potential significance of a GTL industry to Australia’s economy saying it could underwrite offshore gas supply infrastructure to bring forward the possibility of major new domestic gas pipelines to connect the national market, increase domestic gas competition and energise gas exploration.

The potential benefits of course go beyond unlocking new resource wealth and creating new industry, more jobs and more exports—they include the opportunity for Australia to address this most pressing of problems, our future transport fuel security.

But five years later no action has been taken.

There is a long list of failures that I could point to on energy market reform—the issues I’ve discussed today are just some of them.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

The Democrats will be supporting the Energy Legislation Amendment Bill 2006. This bill implements a number of changes, including the Gas Pipelines Access (Commonwealth) Act 1998 and the Trade Practices Act 1974 in relation to the conferral of functions and powers on the National Competition Council and the Commonwealth minister under the cooperative gas access regime. It amends the Trade Practices Act 1974 to accommodate incentives for new pipelines in the cooperative gas access regime which were recently introduced in the South Australian parliament, and it allows the Australian Energy Regulator to apply to the Federal Court for a disconnection order. It amends the Administrative Decisions (Judicial Review) Act 1977, the Australian Energy Market Act 2004 and the Trade Practices Act 1974 to correct certain incorrect references in relation to the application of the cooperative electricity regime. Finally, the bill repeals the Pipeline Authority Act 1973.

As I understand it, these amendments have the support of the states and the industry, and I must say that it is good to see the federal government and the states working jointly through the Ministerial Council on Energy to make improvements to the gas regime in Australia. Gas will, of course, play a very important part in the early mix of low-carbon-emitting energy sources as Australia aims to achieve that 60 per cent reduction of 1990 levels of greenhouse gas emissions by 2050. However, this is only part of the job that needs to be done with respect to energy reform in Australia, and it is our view that this government has monumentally failed in delivering Australia a sustainable energy policy for the future.

The debate on greenhouse gas emissions and climate change has been around for more than three decades. Over a decade ago, most countries joined an international treaty, the United Nations Framework Convention on Climate Change, to begin to consider what can be done to reduce global warming and to cope with whatever temperature increases are inevitable. The federal government showed some promise early on with the announcement in late 1997 of the establishment of the mandatory renewable energy target, known as MRET, to help foster the renewable energy industry in Australia. But since then, the government has abandoned any sensible policy on energy. It was not until 2004, less than two years ago, that this government produced an energy white paper—its blueprint of how future energy goals would be met.

The Senate Environment, Communications, Information Technology and the Arts References Committee examined the government’s energy white paper in 2005. The report of the Democrats-chaired committee, Lurching forward, looking back, criticised the energy white paper, saying that it did not go far enough and it lacked a viable time frame for success. The paper did not contain effective planning for the future needs of Australia in energy supply, in greenhouse emission reductions or in alternative renewable energy development. The report made a small number of achievable recommendations, none of which, as I understand it, have been implemented.

This government continues to refuse to ratify Kyoto, an international and legally binding agreement to reduce greenhouse gas emissions worldwide, and instead opted for the Asia-Pacific Partnership on Clean Development and Climate, which has no price signals, no targets and no real plan for reducing greenhouse emissions. In late 2005 the government signalled it was looking to carbon capture and storage from coal-fired power as a primary means to address greenhouse emissions. Then, of course, earlier this year the government announced major funding for so-called clean coal technology. This is despite evidence that underground storage is expensive and highly risky as the technologies are unproved in the context of stationary energy generation, not expected to be developed and available for implementation until the middle of the next decade and will lead to an increase in energy costs.

And this year the Minister for the Environment and Heritage blocked two wind farms for very suspect, spurious reasons. This action has effectively brought to a halt any further investment in wind power in Australia. The chief executive of ActewAGL, Mr John Mackay, said on ABC radio:

Unless ... Federal Government ... stops playing politics at a local level, any wind farm, including ours, has got to be a doubtful proposition ...

If this was not bad enough, the whole renewable energy industry is under threat because the government continues to refuse to expand or increase the mandatory renewable energy target which it established nine years ago. This was supposed to raise Australia’s renewable energy generation to 12 per cent of the total electricity production, but of course it has gone backwards—it is now, even under MRET, lower than it was before MRET began. That is because, instead of increasing our renewable energy by two per cent progressively, a fixed target of 9,500 gigawatt hours was established, which turned out to be a gross underestimation of what two per cent might look like in 2010.

Only last month the Senate inquired into a government bill that makes minor changes to MRET. Every business and industry representative unequivocally said in their submissions that renewable development had now stalled because sufficient projects already exist to fully deliver the 9,500 gigawatt hour target. All of them called for an increase and an extension to MRET. But the government stubbornly refuses to do anything about this situation, proclaiming how successful it has been.

Then we have, less than four weeks later, the Prime Minister announcing an inquiry into nuclear power. Nuclear energy was not even a vague consideration in the government’s energy white paper, and that was just two years ago. How Australia can possibly plan for a reduction of 60 per cent in our greenhouse emissions by 2050 when it cannot even see two years ahead is anyone’s guess. But now, suddenly, after a visit to the US President, George Bush, our Prime Minister is talking about nuclear power as the way forward to reduce greenhouse emissions. I wish the many much more sound recommendations of the Senate inquiry into greenhouse issues a few years ago had received his undivided attention—the sort of attention that has obviously been paid to our great and powerful friends. Despite empirical evidence showing that nuclear power is not economically, socially or environmentally acceptable as a means to address climate change, our Prime Minister has set up a task force stacked with pro-nuclear members who may compare its viability against coal but not stray beyond that to renewable energies.

We have another bill before the Senate this week, the Fuel Tax Bill 2006, which is part of a package designed by Treasury—which knows so much, of course, about greenhouse—which will destroy the renewable biofuels industry in this country. I should also mention that we have various states implementing their own greenhouse gas abatement price signals and emissions trading schemes because the federal government refuses to establish a national scheme. In fact, there was a scheme put together by the Australian Greenhouse Office some years ago, and that would have provided the groundwork for us to proceed with a national plan. But no, it is not just gathering dust; it is very much in the too-hard and not-to-be-interested-in basket.

All in all, Australia’s approach to climate change is laughable and, frankly, an international embarrassment. If I hear the minister talking about how much has been done to reduce greenhouse gases and mentioning yet again the appliance labelling for water efficiency—which in fact the Democrats pushed the government into doing—as one of the key climate change measures I think I will scream! Climate change and our energy future is a very serious economic, social and environmental issue for Australia, and the federal government has no long-term sustainable plan to address it. The International Energy Agency has concluded that environmental sustainability is Australia’s biggest single energy policy challenge.

The issue of energy is being dealt with in at least six different departments by this government: the Department of the Environment and Heritage; Department of Industry, Tourism and Resources; the Department of Education, Science and Training; the Department of Agriculture, Fisheries and Forestry; Treasury; and the Department of Foreign Affairs and Trade—and no doubt the Department of the Prime Minister and Cabinet. We have various bodies responsible for research, monitoring and regulation of various energy related areas, such as the Renewable Energy Regulator, the Energy Market Commission, a number of CRCs, NEMMCO, ABARE and Geoscience Australia—and that is just to name a few.

But there appears to be no coordinated, holistic approach to sustainable energy solutions and implementation and no-one is actually delegated to undertaking independent research and public consultation within a national framework. In fact, the only body that was close to understanding those kinds of activities, the Australian Greenhouse Office, once proudly acclaimed on the world stage as the first such department in its own right, was shunted back into the Department of the Environment and Heritage as a mere division. We do not hear very much from the Australian Greenhouse Office now, as a result of that.

Both the Productivity Commission and the Business Council of Australia argue that the current lack of a long-term national policy framework on climate change is impeding investment decisions in Australia’s energy infrastructure. The Australian Conservation Foundation argues:

To reduce greenhouse gas emissions and encourage investment in our energy system we need a strong, nationally consistent policy framework that creates a long-term price signal for greenhouse pollution and consistently supports and drives the development and deployment of new low greenhouse technologies.

That is something the Democrats have been saying for a very long time. We agree that we need this strong, nationally consistent policy framework and we believe that what is sorely needed is an independent body that can plan and coordinate sustainable energy solutions.

To this end I will be moving a second reading amendment to the Energy Legislation Amendment Bill 2006 calling on the government to establish a sustainable energy commission. Australia cannot afford to keep addressing climate change in a piecemeal, faddish way. It is my hope that this evening the Senate, in particular the government members of the Senate, will support this amendment. I move:

At the end of the motion, add:

        “but the Senate is of the view that:

        (a)    The Government should establish a Sustainable Energy Commission;

        (b)    The Sustainable Energy Commission should be responsible for:

              (i)    providing leadership and national coordination of sustainable energy policies,

             (ii)    conducting public inquiries and research on sustainable energy options and strategy,

            (iii)    advising government policy makers and stakeholders across government on sustainable energy matters,

            (iv)    monitoring and reporting on progress of sustainable energy policy and industry programs,

             (v)    monitoring international progress on sustainable energy policy, and

            (vi)    educating and disseminating information on sustainable energy”.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise tonight to support the amendment to the Energy Legislation Amendment Bill 2006 moved by Senator Allison for the establishment of a sustainable energy commission for Australia. The issue, as Senator Allison has outlined, is the completely ad hoc manner in which energy is addressed in Australia and indeed how industry is addressed in Australia.

We have no industry policy and no energy policy. We have a policy that simply says: ‘We don’t pick winners of any kind. We just support everything and then something might emerge from the pack.’ Whilst we say we do not support anything, we direct all the subsidies to the industries that we have known for a long time are traditional supporters of and donors to the conservative side of politics. We get the big end of town—the coal industry, the uranium industry and the mining industry generally—all supporting government policy and the government arguing there should be a level playing field when it comes to renewables but never acknowledging the extent of the subsidies that are already there for the mining industry and the oil and gas industry in particular.

The Australian Greenhouse Office has been there in theory. As Senator Allison points out, it is now part of the Department of the Environment and Heritage. That was supposed to coordinate a whole-of-government approach in relation to energy policy, and that has not occurred. In the last few weeks we have seen total confusion. The government talks about energy security. That is a critical issue, even though it was not mentioned by the Treasurer, Peter Costello, in his budget. He did not mention energy security, climate change or oil depletion as challenges to the budget. The budget died on budget night. Is anyone talking about the budget? I do not think so. Since then, the whole debate in Australia has been focused on energy issues.

The issue of energy security is seen by the government simply in terms of, ‘Let’s make sure we’ve got enough energy to support the Australian lifestyle, the Australian way of life.’ The fact is you cannot deal with energy security without dealing with the ramifications of climate change and also the geopolitics. That brings in the Department of Foreign Affairs and Trade, environment and all the sustainability issues. That is what is wrong with the Prime Minister’s whole push on nuclear—it fails to recognise that energy security has national security ramifications.

It was completely laughable to hear Senator Ellison talking about the fact that the government did not consider nuclear reactors as a terrorist threat. It was completely absurd. Given that every other government around the world looking at its energy strategies recognises terrorism as a concern with nuclear power stations, I find it extraordinary that the Australian government, with its supposed interest in national security and terrorism issues, failed to recognise reactors as a potential target.

The other issue with climate change is that it is the biggest national security threat that we face. It is not a security threat in terms of an invasion as such but it has the potential to disrupt the entire region. Imagine if we had abrupt climate change and massive relocation of people. There would be all sorts of issues about water shortages and food scarcity. There would be internal dislocation and movement from the Pacific. New Zealand have made it clear that they will cooperate with a number of Pacific island countries and recognise climate refugees. Australia, of course, are saying not only will they not recognise climate refugees but they will not take even the most basic mitigation measure and ratify the Kyoto protocol.

We need a whole-of-government approach to the issue of energy security, recognising that inherent in that are the issues of sustainability and dealing with climate change. If we actually had that focus, we would recognise that nuclear is a complete nonsense when it comes to energy in Australia because we do not need it, it is too slow, it is too expensive and it will not address the greenhouse gas issue in the time frame that is required. Plus, it is dangerous, which is why President Bush would like to set up a new alliance of nuclear energy supply centres around the world, and he is discussing with our Prime Minister the possibility of Australia becoming one of those nuclear fuel supply centres. That is what this debate is about, and it is about time we had some honesty about that.

It was quite refreshing to hear Senator Minchin today be honest about it and recognise that, as an economic rationalist, as he says he is, there is no way known that nuclear is ever going to be economically viable in the next hundred years in this country, even with a carbon tax. That is getting closer to recognising what the real agenda here is, and that is that the Australian budget and Australian economy are essentially dependent on corporate profits from mining and that this is about the expansion of uranium mining and the export of uranium to China and India. It is as simple as that.

I support the idea of setting up a sustainable energy commission. The UK has its Sustainable Development Commission, which looks at issues in the whole area of sustainability, and we should be doing exactly the same. We need some national coordination in energy policy and we need national coordination and prioritising in industry policy as well. We need stakeholders and the community to be involved in these discussions and we need to have a monitoring of progress on sustainable energy policies. In terms of renewable energy policy, Australia is so far behind it is embarrassing. If you look at the German experience, where they decided to move from nuclear to solar, you will see that they introduced a feed-in law. This excites many Australians when you talk to them about it. The Germans introduced a law which required energy wholesalers to purchase renewable energy from anyone who wanted to sell it to them for a fixed price and for a fixed period of time. The result of that was that people could go to their bank and borrow money in order to cover their roof with photovoltaic cells because the bank could be assured of a fixed return on the amount of energy that was sold into the grid. The result has been that Germany has made a massive shift out of nuclear and into renewable energy, solar in particular, and has created over 150,000 jobs in the process—more jobs than ever they had in the coal industry. What is more, they are generating a whole new industry sector for Germany.

The Chinese are doing the same. They have set a 15 per cent renewable energy target, making Australia’s two per cent look absolutely pitiful and ridiculous. Dr Shi has become Australia’s first solar billionaire as a result of rolling out photovoltaic technology in China—not in Australia, but in China. He has made $1 billion and given money back to Professor Martin Green at the University of New South Wales for his work there because the government does not fund the research work that is required. What an embarrassment. What a shame for this nation. Down here at the ANU we have sliver cell technology, which is reducing the cost of photovoltaics by 75 per cent. That also is a technology that is now being chased by the Germans, the Japanese and the Chinese. If we are not very careful, that technology will head overseas as well. There is example after example of the government just turning its back.

What about solar thermal? That is a fantastic technology. The CRC for coal research, in its recent paper on solar thermal, said that, for an area of 35 square kilometres of Australia, solar thermal could meet all of Australia’s baseload electricity. That is amazing. They say that it can be cost-effective with coal in seven years. Why are we talking about nuclear even for a minute when we have the potential to roll out solar thermal? It is not a pie in the sky. The US already has a 250-megawatt solar thermal station operating as we speak. The advantage of solar thermal is that it can be used in conjunction with coal as a transition strategy that removes the problems of burning coal in power stations and treats coal as a chemical to be used in association with the solar technology so that you get the baseload power.

It is extraordinary to me that we have a government that is so wedded to the dollars from coal and uranium exports and the big end of town, the whole mineral industry, that they are not looking at the clever end. In terms of the low emissions technology fund, it is going to technologies, as Senator Allison said, like carbon capture and storage, that have not been proven. By adopting that strategy, you end up with business as usual: ongoing coal mining and ongoing construction of coal-fired power stations. We have heard a lot from the government, including from the science minister, Minister Bishop, about how nuclear is supposedly cleaner and greener because it is greenhouse friendly.

I want anyone in the government—I do not mind who it is—to tell me: what is the carbon footprint of the Roxby Downs expansion at Olympic Dam? What is not being said is that currently that mine uses about 30 million litres of water a day out of the Great Artesian Basin. The expansion will see it going to about 150 million litres a day. Where are they going to get it from? They cannot get it out of the Murray River and they cannot get it out of the Great Artesian Basin. They are going to have to build a desalination plant in South Australia to desalinate water to send it up to the Olympic Dam site. How are they going to fire the desalination plant? They will either have to go with a coal-fired power station or a gas-fired power station—either way, it is a fossil fuel solution. So much for saying that uranium out of Olympic Dam is somehow going to contribute positively in relation to greenhouse. It is going to make a mega negative contribution to greenhouse—and add to that the costs of the energy involved in processing the uranium and the mining emissions that are going to come from transport fuels.

Then, of course, at the end of the day, if you look at the whole nuclear fuel cycle, you have the decommissioning of the plants. The government could not even put a dollar figure on what it is going to cost to decommission Lucas Heights. If they cannot even do that, why are they having an inquiry into this whole issue? Let us put a dollar value on that before we start, so that we get some real figures out there in this whole energy and policy discussion mix instead of misleading the Australian people into thinking this is something to do with energy security or greenhouse. It is to do with neither. It is simply to do with the government’s relationship with BHP Billiton, the export contract with China and the potential export contract with India, which of course would undermine the nuclear non-proliferation treaty.

What is incredibly ironic is that the two wind farms that were signed onto by Roaring Forties in the last week are going to return, on their own, more than half of the dollar value that was expected from the estimated return on the deal from China on the uranium exports. So let’s get real here about the kind of dollars we are talking about, the mess we are going to create for future generations, and the real prospects in terms of which energy sources Australia could employ that would be sustainable, create jobs, strengthen the economy and contribute to our global responsibility on greenhouse gas emissions.

That is why I support Senator Allison’s initiative here in trying to set up a sustainable energy commission that goes across government and stops this ad hoc approach—where the Department of Foreign Affairs and Trade does not realise that climate change is a national security issue, where the industry groups do not have any sense of the potential of these new industries to create jobs and where you have the environment department giving one set of advice in relation to wind farms. We all know full well that the wind farm decisions were based on a promise during the election campaign in a marginal seat that if the people voted for the Liberal Party the minister would stop the wind farm, and that is what happened. Then in Western Australia it is Senator Campbell’s bid to change from the upper house to the lower house and get preselection in that seat that has led to the decision on the West Australian wind farm.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

What a fantasy!

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am glad that Senator Macdonald thinks it is a fantasy. It is certainly what people think may occur in terms of the member for that particular seat, Wilson Tuckey, and the future preselection to the lower house—but we will see in the course of events what does happen in relation to that. But that is the kind of idiocy that we are getting in climate policy across Australia and the lack of consistency and the lack of actual real concern about sustainability and commitment to it. That is why setting up a sustainable energy commission would be a very good idea, and I commend Senator Allison on this initiative. The Greens will be supporting it.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

I thank the senators for their comments and contributions to the Energy Legislation Amendment Bill 2006, not that they had anything to do with the legislation—but we do come to expect that. The bill will in fact amend part IIIA of the Trade Practices Act 1974 to ensure that two greenfields incentives for the investment in new pipelines—which were passed by the South Australian parliament on 8 June 2006—can function properly. The bill assists with encouraging new pipeline developments to meet Australia’s increasing demands for natural gas.

In relation to Senator Allison’s amendment to the legislation, the government will not be supporting the amendment. In fact, we have a body that looks after the issues that Senator Allison was looking to deal with. That body is the Ministerial Council on Energy which was established in 2001 by the Council of Australian Governments, and that body is the national policy and governance body for the national energy market. That body essentially looks at all of the issues that Senator Allison is addressing in her amendment. We will not be supporting the amendment and I commend the bill to the Senate.

Question negatived.

Original question agreed to.

Bill read a second time.