I thank the Senate for the opportunity to speak on a very important issue in the Australian oil and gas industry and what it contributes to our country, and why it deserves a commonsense approach to its regulation and oversight.
The government will not be supporting this bill from the Australian Greens, the Great Australian Bight Environment Protection Bill 2016, primarily because this bill is an anti-science bill. It is a bill that does not want to look at the evidence. It is a bill that does not want to adopt a commonsense approach to the development of the natural resources in this country, because it doesn’t want to engage in any kind of evidence; it simply wants to prohibit, to ban, an activity that is safely carried out in this country and has been done so for decades—more than 50 years, in fact, and I’ll go through that.
It is typical of an agenda that is often run by the Australian Greens that they don’t want to engage in the detailed investigation of individual and specific projects in this country. Instead, they want to put blanket bans on any kind of activity right around the country, because they know that if they had to get to the guts of the evidence, of the data on what has actually occurred in the past, they would lose that debate. So, instead of engaging in the hard work of looking at specific projects and what their specific impact on the local environment would be—and what the impact of not doing the developments would be—they simply propose bills that seek to prohibit activity over wide swathes of Australia and deny particularly local communities the opportunity to benefit from the development of their resources. The reason they don’t want to engage in that science—and I think we can all agree that science is basically about looking at evidence, particularly looking at past experience and making reasoned judgements on that experience and on that evidence; it is evidence based—is that the evidence would show their arguments to be the bunkum that they are; they would show the arguments that Senator Hanson-Young has just put in this chamber to be absolute bunkum.
This bill would, for the first time, establish a complete ban of oil and gas activities over an area of Australia—not based on any evidence, not based on any investigation or consultation with those local communities, but based instead on an unelected, unrepresentative fiat from the Australian Greens, who represent perhaps 10 per cent of Australia’s population. Instead, we should be evaluating things on a case-by-case basis. I would like to spend a bit of time in my contribution discussing the example and the evidence of the production of oil and gas in Australia in the past 50 years or more. Over the past 50 years, thousands of wells have been drilled in offshore areas across Australia with no major incident whatsoever. They’ve been drilled safely, because we have a very strict and robust regulatory regime to do that. In fact, it is an independent regime. It’s a regime that’s not controlled by the minister or the government; it is controlled by an organisation called NOPSEMA, who take their job very seriously—and I’ll have more to say about NOPSEMA later in my contribution.
Also really important to this debate is that a lot of that drilling, around 1,000 drills, has occurred in the Bass Strait—just south of Melbourne, just south of a major city in Australia, and also a very important environment—and nothing serious has occurred over 50 years, because there’s a well-regulated process, and it’s based on science. Australian workers who are involved in this industry take their job very seriously. I think it’s a great denigration by the Australian Greens of our great Australian workforce who work in these industries and, day by day, deal with the risks and natural environments in a way that is safe to the environment and also incredibly productive for our country.
Specifically in the Great Australian Bight area, nowhere did Senator Hanson-Young mention the fact that wells have been drilled in the Great Australian Bight before. If the Australian Greens and Senator Hanson-Young were going to take an evidence based, scientific approach to this debate, they would engage with that evidence and explain why, given that we have safely drilled in the Great Australian Bight before, it needs to be banned today when it wasn’t banned, obviously for the past 40-odd years. I think the first well was drilled there in 1972. In fact, 13 wells have been drilled in the Great Australian Bight, all without incident and under the proper and independent regulatory system that we have in this country.
One of the great contributions that have been made by our oil and gas industry, the Australian oil and gas industry, is its contribution to our national security and to our domestic security over oil and gas. It’s something that I think, unfortunately, is not commented on enough, perhaps because we’ve taken it for granted too much in the past. But in fact, for most of the last 50-odd years, we have had quite secure supplies of oil and gas in Australia, principally because of the productive fields of the Bass Strait, which began to be developed in the 1960s. After the 1960s, of course, we had the 1970s—that usually is the way it follows—and in the 1970s we had an oil crisis around the world where a lot of countries did not have access to oil because of the creation of OPEC, which is still, obviously, in existence today. But Australia was somewhat insulated from that process thanks to the oil and gas production we had in the Bass Strait. We had sufficient supplies of oil here in Australia. We did not have the petrol rationing that had to occur in the United States, and, of course, we benefited from the terms of trade changes that occurred when oil prices went up.
The problem for us is that we no longer have the oil security we had in the past. We should no longer be taking it for granted, because in the past 20 years our demand for oil has continued to grow as our economy has grown, and economic activities continue to demand the use of oil for certain activities, particularly transport. However, our production of oil has fallen rapidly. Indeed, over the last 20 years, our demand for petroleum products has increased by 35 per cent but our production has fallen by 65 per cent, principally because the Bass Strait is no longer producing much petroleum or oil at all.
To put this in stark relief here, on the eve of September 11, now 17 years ago, Australia produced enough petroleum to meet 95 per cent of our domestic needs, so 95 per cent of our domestic needs could have been met from domestic production. Of course, some of that production was exported, and we imported petroleum and refined oil products from other parts of the world, but back then, if the worst had happened and our supplies of oil or hydrocarbons from the rest of the world had been cut, we would have had enough domestically to survive. It’s a different story now. Now we only produce enough oil and gas for 48 per cent of our domestic petroleum needs, so we’ve gone from 95 per cent on the eve of September 11 to 48 per cent. Less than half now is produced through domestic production.
That should be a wake-up call for our country. We are an island nation. We sit at the bottom of the world, where, fortunately, we have access to largely free and open trade routes, but we should not and cannot always take that for granted. There is always, of course, the risk of things going wrong, and the old saying is correct that we should hope for the best but prepare for the worst. The worst for our country in this regard would be the cutting of those supply chains, which would immediately, overnight, cause us to have to reduce our oil and gas consumption by more than half—possibly more given that we don’t refine a lot of the product here either.
I’ll get to the Great Australian Bight in more detail in a second, but when the Australian Greens bring to the parliament a bill that says, ‘Let’s just ban any opportunity for us to develop one of the most prospective areas for oil and gas production in the world or to have it as an insurance policy against the worst happening,’ you’d think they would engage in that argument when we say, ‘Why are you proposing something which would make us potentially more vulnerable if trade and access to oil and gas from overseas were cut, which would mean we would fail to have sufficient oil to run not only our military needs—the submarines that we’re building in South Australia, our fighter planes and our tanks—but also basic transport needs in a crisis?’
But the Greens do not even engage in this debate. They have no response to this issue: what would your alternative be if we’re not going to develop our own domestic supplies of oil and gas and become more reliant over time? The strategy of the Australian Greens is that they want to continue to cut oil and gas production right across Australia. They don’t support it anywhere in Australia. If that’s going to be their end game, how are we going to make that up if the worst happens? There is no response on that issue from the Australian Greens. That argument alone should be reason enough for the Senate to say no to this bill, because there is not much more an important issue than making sure that we can defend our nation and protect Australians from the worst outcomes that might occur around the world.
If we were to develop a new oil and gas basin, it would be a major economic boost to our country as well, which is also an important reason to back the development of our natural resources. We are an incredibly prosperous nation, thanks almost primarily to the fact that we have an ability to turn our natural resources into wealth-demanding products—products that people demand around the world—whether it’s our iron ore, our coal, our soils or our agricultural industry. Our tourism assets are also natural resources but do need economic development to attract people to them and, likewise, in this case our oil and gas assets. It’s very important for our country to responsibly develop these assets.
I noted while I was sitting here that Senator Hanson-Young originally claimed there wouldn’t be any local jobs at all created from the development of the Great Australian Bight. That’s on the record. I think Senator Hanson-Young may have picked herself up and thought that might be a bit too extreme, so she might have given the oil and gas industry five or six jobs—half a dozen jobs. This is demonstrably ridiculous and absurd because we have an oil and gas industry right now. We can see the jobs it provides. This is another example of the Greens not listening to the evidence and just deciding to pass legislation based on a motion, not any evidence, facts or figures.
Right now, our oil and gas industry employs thousands of people around the country. You can go to Traralgon, Gippsland and Melbourne and see the thousands of people who work in the Bass Strait in that industry. Mr Acting Deputy President Dean Smith, one can go to your part of the country, the great state of Western Australia, to Karratha and Port Hedland, and see the thousands of people who are employed in our oil and gas industry there. Indeed, they’re right around the country, including in my electorate. I’m always surprised how many people in my electorate, in Central Queensland, travel over to Western Australia every fortnight or every month or so to work in the iron ore industry but also in the oil and gas industry. It is an employer, right around the country, of thousands of people. So to come to this place and say that, if we were to develop a major oil and gas basin which could produce two to six billion barrels of oil on the current evidence we have, it would somehow only employ half a dozen people locally is demonstrably absurd. Again, if Senator Hanson-Young were to engage in the evidence, she would have seen—and probably has seen—reports showing that ACIL Allen, a respectable economic analysis agency, has recently estimated how many jobs could be created by the development of the Great Australian Bight. They found that more than 2,000 jobs would be created in construction alone from the development of the Great Australian Bight. It would add $3 billion to $12 billion to the national economy, which would be a huge boost, particularly for South Australia, which is of great importance.
I think that we need to balance the issues here. Of course, we do need to have an incredibly robust system to protect the environment—I’ll come to what we’re doing, if I have time, in a second—but we also need to recognise the local communities that do want those jobs, that economic opportunity and a future for their children and grandchildren in their local towns, doing something which is of great importance to the world. It’s obviously of great importance: people pay a lot of money for oil and gas, so they must need it. It must be an essential input to people’s lives right across the world, given the price it gets. We can be part of that. We can take pride in supplying an important energy source to the world. As I said before, people have great respect for the workers in this industry, who often spend a long time away from their family in a very tough environment and do a tough job, and it does produce enormous benefits for the world.
Recently—again it’s something Senator Hanson-Young failed to mention in her contribution—we had local government elections in South Australia, where this was a live issue. Greenpeace in particular ran a strong campaign trying to elect councillors across the areas who were opposed to the development of the Great Australian Bight, but that was not the result. Senator Hanson-Young mentioned Kangaroo Island. I’ve been to Kangaroo Island. It’s a lovely, lovely place. The new mayor there, Michael Pengilly, has said:
I don’t oppose it—
that is, he doesn’t oppose the development of the Great Australian Bight. He said:
… my view is very strongly that the environmental lobby have successfully run a great fear campaign against it. Everybody is environmentally conscious these days but you need to have some clarity and common sense. Our economy revolves around the oil industry, we have to have energy.
And Michael does speak common sense. The new Mayor of the City of Port Lincoln, Brad Flaherty, also said:
These sorts of things aren’t going to be a real priority for us. The priority for us is making sure the council is efficient and effective in its actions towards looking after the ratepayer base … ensuring that the city is sustainable and viable going forward into the future.
Mr Flaherty says that he is pro employment and pro business and wants to see those opportunities for his area.
I too want to see local towns be able to take those opportunities. I want to see them take those opportunities, as I say, under a robust and strong environmental protection environment. That is why, as the minister for resources, I’ve made decisions to strengthen the oversight of NOPSEMA on the oil and gas industry, to make sure we continue to improve our environmental protection, because we can always do that and do things better. For example, in November last year, I announced that all environmental plans on oil and gas developments will now be made fully public—there will be full transparency of those. We have already drafted amendments to the offshore oil and gas regulations in that regard. They’re out for consultation at the moment.
I am thankful for the fact that Equinor, the company that are proposing to drill in the Great Australian Bight, have already committed to release their environmental plans in full, despite it not being a statutory requirement yet. They’re pre-empting the changes, and that is a good thing. They will release all their modelling, all their evidence, for public consultation. It will be all out there.
We are also making sure that we fund further research into the impact, potentially, of seismic testing on our seafood industries in particular and more broadly on the natural environment. Recently there’s been a comprehensive review by Geoscience Australia of the existing evidence, and the CSIRO has just completed a study on the impact of seismic testing on zooplankton. We’ve now provided extra funding to the Australian Institute of Marine Science to look at how seismic testing might impact fish and pearl oysters as well. That research is being conducted at the moment. Again, we will be guided—and NOPSEMA I know are guided—by the science, by the evidence. They will not approve anything that has a materially detrimental impact on the environment.
I recognise that the reason we have these stringent regulations, and the reason I have made decisions to strengthen those and strengthen that oversight, is that there are risks associated with the development of oil and gas. There are risks associated with pretty much everything we do in life, whether it’s construction in a city or it’s farming, mining or building a factory. All of these things have risks associated with them. The proper approach to those risks, though, is to properly manage, mitigate and assess them and also to balance them, of course, with the risks of not doing anything.
That’s something that, unfortunately, the Australian Greens simply have not engaged in in this debate: the risks of not doing anything. If we do not develop our oil and gas resources, what does that mean for the national security of this country? If we do not develop our oil and gas industries, what does that mean for the accessibility and affordability of petrol for Australians? It’s a demonstrable fact that those countries that produce petrol have cheaper petrol because they don’t have to transport it, and they refine it close to where they are. It is cheaper for them because of that. I think those risks of not developing are serious. They are serious risks that go to the heart of our national security and go to the heart of the cost of living of millions of Australian households, and they need to be properly assessed and weighed up against the risks on the other side of this debate.
We have successfully managed those risks under an independent regulatory regime for the past 50 years. I’m confident that we’ll continue to strengthen that regime to improve on the outcomes for the oil and gas sector, and we’ll do so in a way which also helps to support thousands of Australians to have a good, high-wage job in an industry that is an amazing development in our modern economy. Some of the smartest people in the world work in this industry. Some people say that the deep-sea drilling that occurs across the world, including in Australia, is the scientific equivalent of taking a man to the moon. It is that complex, that detailed, and I’m proud of the fact that we have an industry in this country—such a scientifically demanding industry—which leads the world. It leads the world in offering high-paying jobs for Australians who just want to work hard and provide for their families, and it leads the world in making sure that we protect the environment while also supporting a strong economy for millions of Australians.
