The government has been well aware of the Incitec Pivot’s challenges to supply an adequate amount of gas to its facility, and it is great news for Queensland and great news for Australia that, on Monday, Incitec Pivot was able to reach a deal with Central Petroleum for a 12-month 32-terajoules-a-day gas supply contract that will help keep that plant open.
Senator IAN MACDONALD (Queensland) (14:59):
My question is to the Minister for Resources and Northern Australia, Senator Canavan. Is the minister aware that the Incitec Pivot Gibson Island fertiliser plant was at risk of shutting down due to difficulties in securing adequate gas supplies? Is the minister aware of how that might have affected jobs in Brisbane? What’s the present position with that plant and how has the government helped?
Senator CANAVAN (Queensland—Minister for Resources and Northern Australia) (15:00):
I thank Senator Macdonald for his question on this very important matter—a facility in Brisbane that supports up to 1,500 jobs, including 450 jobs at Gibson Island. It is also the only location in Australia where urea is manufactured—a very important input to our agricultural sector. So it is an incredibly important piece of infrastructure for our country. The government has been well aware of the Incitec Pivot’s challenges to supply an adequate amount of gas to its facility, and it is great news for Queensland and great news for Australia that, on Monday, Incitec Pivot was able to reach a deal with Central Petroleum for a 12-month 32-terajoules-a-day gas supply contract that will help keep that plant open. This is very important for our country, and it is at least in part thanks to the action the government has taken on a range of fronts to avert a gas supply crisis that we faced 12 months ago.
As I outlined to the Senate earlier this week, last year we announced a framework to control gas exports if required to make sure there’s enough gas in this country. Indeed, we made that announcement at the Gibson Island fertiliser plant in April last year. Since that announcement, and in subsequent agreements with the gas industry, more than 70 petajoules of gas has come back onto the domestic market that would have otherwise been exported. That has meant that there is more gas in the market. It’s helped bring down prices by around 25 per cent in most markets. Prices in Australia now are back down, well below what they are in North Asia and exports markets; whereas, 12 months ago the price in Australia was about the same as it was in North Asia, which was quite a paradoxical situation.
We will continue to act to make sure that businesses right around Australia—not just Incitec Pivot—have adequate supplies of gas and that we protect these very important manufacturing jobs. To have these jobs we need sensible energy policies, we need cheap energy, and we need to make sure that we don’t impose unnecessary burdens on our energy sector which would cost jobs and hurt families in this country.
The PRESIDENT:
Senator Macdonald, a supplementary question.
Senator IAN MACDONALD (Queensland) (15:02):
In asking a supplementary, can I thank the minister for his recognised effort in ensuring gas supplies, and I ask: how have the coalition reforms that the minister was instrumental in getting forward, including those to improve transparency and competition in the regulation of gas pipelines, contributed to better outcomes for gas supply?
Senator CANAVAN (Queensland—Minister for Resources and Northern Australia) (15:03):
I’m happy to inform the Senate that the deal that was announced earlier this week by Incitec Pivot will benefit from the pipeline reforms that the government has progressed in this area. The gas to Incitec Pivot will be delivered from the Northern Territory via the Northern Gas Pipeline, which is due to be completed later this year. The Central Petroleum managing director, Richard Cottee, said that he is ‘absolutely convinced’ that the deal wouldn’t have been possible without recent pipeline reforms driven by the federal government and the competition regulator. These pipeline reforms include requirements on pipeline companies to provide the market with more information about gas flows and to establish binding arbitration to resolve negotiation disputes. By allowing more of these deals to occur to transport gas around the country, we are able to make sure that gas is supplied to where it’s needed and when it’s needed—and it supports jobs.
The PRESIDENT:
Senator Macdonald, a final supplementary question.
Senator IAN MACDONALD (Queensland) (15:04):
Minister, how can we ensure the long-term survival of Australian manufacturing industries that rely on affordable energy? How can we ensure that they stay in business?
Senator CANAVAN (Queensland—Minister for Resources and Northern Australia) (15:04):
What we do need is the continuing investment in energy supply. We know that Labor governments won’t be able to be trusted to provide that sort of energy security because they don’t support the development of our energy industry and they don’t support the development of our resource industry. Without exploiting our resources, we will not have adequate supplies of energy and we will not have adequate supplies of gas, and it will cost thousands of jobs in this nation.
While it is good news for the country that the gas supply crisis of 12 months ago has been alleviated, it is still the case that to ensure this does not arise over the next decade we develop and find more supplies of gas. That was identified in the Australian Energy Market Operator report earlier this week. That is why this government is right behind making sure we do develop our gas resources, whereas the Labor Party, with the Greens and various state governments, have been blocking the development of those resources. And if they succeed—if they win—jobs will be the cost. If they win, families will be put out of their homes, because these good manufacturing jobs that we need for cheap and successful energy
