Firstly, I just want to briefly respond to Senator Hanson there. It is not correct to say that the former Liberal-National government did not impose a domestic gas reservation policy. One of the last acts I did as resources minister was to establish a change in the policy of the federal government so that any new gas field developed in Australia would have a domestic reserve requirement. I stand by that decision. And we very much hope that some of these new gas fields are developed, to help supply gas to Australians.
In terms of comments Senator Hanson made about offshore oil and gas fields, we really have only a few of those in Australia—some off the Western Australian coast and some off the Victorian coast, with a little bit up in the Northern Territory. The reality is that those in the west and the north are not connected to the eastern coast, and there is not a shortage of gas in our north and west, so an offshore reservation policy there would not have alleviated the situation we face here in eastern Australia.
That being said, in Western Australia there is already a 15 per cent domestic gas reserve requirement, which supplies them with gas—properly so. All of the gas from the Bass Strait, the other big resource we have, is supplied domestically. The Bass Strait reserve already does go to domestic supply. A domestic gas reservation requirement would not have changed that.
The problem we, as a nation, have and have faced for some years is that the Bass Strait, as a region, has been declining in terms of its gas reserves, especially of the low-cost gas which comes when you produce oil. That has increased prices and costs for the users of gas in eastern Australia. We have been desperate to find new sources of gas. Of course, we have the coal-seam gas in Queensland, which helps, but it is a relatively high-cost form of gas production. And what we desperately need is to find more oil.
That is why the decision in the budget, only a few weeks ago, to slash funding for the development and exploration of new gas fields is so disappointing to the manufacturing industry in this country, and to anyone who wants to see power bills, energy bills, come down in Australia. Effectively, this government is crying crocodile tears for the manufacturing industry right now. They are purporting to have sympathy for the factory owners, for the small businesses and for mums and dads who are struggling to pay their bills right now. But, on the other hand, they are doing nothing—not taking the actions they could take—to alleviate those circumstances. If the government were serious about bringing down gas prices and making sure we keep manufacturing jobs in this country, why would they have cut over $50 million from the development of the Cooper and Adavale basins to develop more gas for Australians?
The truth is that Australian governments have always been involved in the development of new oil and gas fields in this country. In the Bass Strait, it was the Menzies government at the time that provided a production credit, a drilling credit, to BHP and Esso to develop that field. It served Australia well for 50 years. Drilling for new oil and gas fields is extremely risky. In the early stages of the development, it is very hard to make the sums stack up—even more so, when you have a government calling in 18 coal and gas projects right now. The risks of paying lots of money—hundreds of millions of dollars—upfront to drill, when you don’t even know if you’re going to get approval at the end of it, make it very difficult.
There is a public good in developing our own resources, because—let’s be clear, and I agree with Senator Hanson—the gas companies don’t own the resources; they are owned by the Australian people. So, because they’re owned by us, we should seek to develop the knowledge and understanding of those resources so that we can attract further investment from companies to develop them. They are our resources. It’s like owning a block of land. When you own a block of land, you try and market it; you want someone to buy it. You might put some fences around it or do some stick-picking on it, to make some buyers interested in coming along and potentially developing it. It’s the same principle here. It is our oil and gas. Those are our resources. We should be doing that early work, that exploratory drilling, to de-risk those projects, to bring up the knowledge of them, so that we can attract investment and bring down power bills and keep manufacturing jobs in this country.
The government’s decision to slash funding from those activities is so short-sighted. And it is so hypocritical, because we had the Treasurer out there today saying that somehow he wants to find a solution for the manufacturers and the gas industry in this country, and yet, in his budget, only a month ago, he slashed the very funding of development of resources that could help alleviate those resource issues. If only our factories could be powered by the hypocrisy of this government, we would never have another problem. We’d solve climate change!
There is an infinite supply of hypocrisy from those opposite, but we can’t bottle wishful thinking and use it to help to protect jobs in this country. We actually have to get our hands dirty and drill and support those people who work hard for our nation to develop our country. That’s why we supported the gas industry when we were in government. I just wish this one would do the same.
