Wilson Tuckey (O'Connor, Liberal Party) Share this | Hansard source

I would like to congratulate the member for Batman on his contribution to this debate on the Petroleum Resource Rent Tax Assessment Amendment Bill 2006 and the Petroleum Resource Rent Tax (Instalment Transfer Interest Charge Imposition) Bill 2006. He is starting to demonstrate leadership qualities on that side of the House by his practical assessments and by putting some substance into his speeches, which—be they critical or not—add significantly to the parliamentary debate. I heard a previous member pointing out that certain people complain about having their opportunity to speak closed down but that, when you read what they have to say, you see that it is in fact often a waste of the time of this House. I would not say that of the member for Batman. I wish he had stayed so that I could have told him about the things in his speech that were good and some of the things that were not.

I note that the member for Throsby, who is at the table, has also agreed with me on some of these energy issues so far. Nevertheless, she does not seem to have got her leader and others to focus on these very important matters, compared to some others which seem to be of great interest to them. I note that, notwithstanding the case put by the member for Batman for an increase in the petroleum resource rent tax threshold, that is not one of the opposition’s proposed amendments. That case has been put strongly by the industry with fairly substantial reasons. I gather that the government’s response is to try to achieve savings for the industry in administrative areas and that some of these are quite significant. I note that the Minister for Revenue and Assistant Treasurer, in his second reading speech, points out:

The amendments reduce compliance costs, improve administration and remove inconsistencies in the Petroleum Resource Rent Tax Assessment Act 1987—

which, as you would remember, Mr Deputy Speaker Jenkins, was the time when the Labor government was in office and brought these measures to the House. There has been a shift in time and a shift in need, and I will shortly refer to a number of the changes that have been made in those respects. Whilst I cannot agree to the amendment that suggests that the government should be condemned for introducing this positive legislation, I do tend to agree with the opposition that this parliament lacks, to use their words, ‘a comprehensive, national energy policy’. It is not a matter for words; in my view, above all else it is a matter for targets. You can find in the past evidence of governments around the world doing that. Maybe some diplomatic efforts are required to do as the member for Batman mentioned: unshackle the free world—and more particularly in our case the Australian motorist and others—from an unstable Middle East and ever-escalating prices.

We can do that with an energy policy, but what we want is an energy policy with targets. For the life of me I cannot see, having participated in some debates that have looked specifically at our best renewable options, why we should not be able to get together on those and bring to this parliament the credit that used to exist to a great extent when the present government was in opposition. It is an interesting aspect of that period in time—and I certainly do not want to return to that period—that, when the government of the day brought forward policies like the privatisation of the Commonwealth Bank, the opposition of that time said, ‘We support you simply because that was always our policy.’ Similarly, when the Hawke government, contrary to the views of many of its members, eventually decided to float the Australian dollar, we got up and said, ‘What a good idea!’ So there is plenty of evidence in this place that the parliament runs better when there are joint policies, and I think nothing is more important than a joint policy on energy as mentioned. I do not think we have one, and I am not aware of anything of substance that the opposition has provided.

I am concerned by suggestions in these opposition amendments that, by the government relaxing some of the administrative requirements and by companies being able to access what is virtually a self-assessment scheme, major oil- and gas-producing companies will seek to cheat the government of revenue. The PRRT process is common throughout the world. As a member of a joint delegation party to Norway recently, I found that their version of PRRT is at 77 per cent, so I would imagine that those dealing in the Australian environment would think they are pretty well off. There are probably some reasons for that, but it is interesting to note that by law the Norwegian government spends only four per cent of the rent that it raises, putting the rest into a future fund, that being an initiative which this government has also taken in a more generic way. That other governments around the world also see the need to look at demographic change is evidence that we are on the right track.

Nevertheless, it is interesting that part of the suggestion from the member for Batman for a future energy policy was to look at gas to liquid processes. And the other day the Premier of Western Australia, when he was called upon to say something positive about energy—and he had been saying, ‘No nuclear’ without offering any alternatives—suddenly said, ‘We’ve got plenty of gas. We’ll liquefy it and pump it across Australia.’ Other people have thought of that, but it is not necessarily a good idea.

There is a fundamental rule of physics that says you cannot destroy an element. If the emission of carbon into our atmosphere in various forms—both particulates and, in particular, CO gas—is delivering the climate outcomes which some claim and others deny, then it does not matter what sort of carbohydrate you use—you have carbon in it and you have an emission problem by degree. Unfortunately, considering the proximity and low costs of coal, coal is the worst. The CSIRO told us at one of their breakfasts that cleaning up the gas is achievable, and I welcome the information they provided. They also had to admit that the process of extracting the nasties from the gas emissions would consume 20 per cent of the energy output of the powerhouse. So you are going to burn an awful lot of coal to clean up the emissions. It is almost a vicious circle. But, if we are going to have an energy policy and we believe it should have the best economic outcomes, we have to look at our renewables, but we also have to be very cynical about them.

I saw an excellent article today in the West Australian newspaper putting in quite good balance the different arguments about our future in energy—including, of course, nuclear energy—and quoting the views of a number of people. The article eventually had a quote from a professor who said wind power was much better than tidal power because it was cheaper. I am going to post him a copy of a newspaper article pointing out that a very significant wind-generating farm in New Zealand has 150 megawatts. That could be a small coal-fired station. I think the largest in Western Australia is 300 or 400 kilowatts and I think they have a couple in New South Wales that are 600 kilowatts. This is a big generator and its power generation can vary by 100 of those 150 megawatts within a five-minute interval. This is common in the use of wind power. The poor old power distributors are more worried about when it goes up than when it comes down so they do not fry everybody’s computers or blow out all their light globes. Wind power is totally incompatible with a grid system. I often remind people as a simple example that the wind blows strongest just as you turn the lights out. Of course, when you look at solar power, take your pick: do you want only to live in daylight?

These particular forms of renewable power do not suit the demands of our grid system as coal does. In fact, because of this huge variation, we are burning as much coal in coal-fired power stations waiting for the wind to drop off because we just cannot crank them up like we would, say, with hydro. Consequently, we are still burning coal, and people are making wonderful claims about all the emission savings from wind power. I think wind power is too expensive to be the solution to making hydrogen, but at least it would be compatible with the manufacture of hydrogen because you just make more or less.

In the tidal regions of the Kimberley, we have a harvestable energy resource, whatever it might cost, equal to all the energy of every variety used in Australia. What is more, in bringing myself back to this legislation in more detail—although I think I am responding in most cases to the previous remarks, which I welcomed—the fact is that opposite that tidal resource in the Kimberley is yet untapped one of the largest offshore gas deposits known in Australia. It is owned by Woodside. If one is interested in emissions and in reserving our resources or maximising the amount we can sell to someone else or consume ourselves, it seems pretty silly to me to burn natural gas, a carbon emitter that is lower than coal but not clean, to generate the electricity power necessary to liquefy natural gas. It might be arguable that the generating capacity of power transmission of those tides in the Kimberley is a little bit far away from Karratha where we presently do our gas liquification, but it is awfully close to Broome. If there is going to be, as is proposed, a gas liquification industry installed north of Broome—and that would be better—then its energy resource will be generated from the tides of the Kimberley.

Whereas this professor said in the paper that it was too expensive—that is the Derby tidal power situation where a mickey mouse proposal was put forward; I supported it as a demonstration of a plant’s ability to generate power up there, but it was extremely expensive for what it was—we would have looked awfully funny to the people in Broome and Derby if we had tried to give them a stand-alone wind generation system. One minute they would be in the dark and the next minute their computers would be blowing up. There is not a wind farm in Australia that is allowed to operate without a connection to baseload power. If the baseload power fails for some reason, you have to shut the wind generators down for fear of the damage they will do. We just have to accept this. It is a silly argument to say that it is contributing to reduced emissions.

What I wanted to say on the renewable energy opportunity called the tide is that it too varies but on a highly predictable basis. High tide on the Kimberley coast 100 years from now can be predicted with certainty. Consequently, you can build—and I will not say redundancy—a capacity into tidal generation to overcome the blips on the neap tide, as they mention it. That can be done with pump storage. It can be done by literally pumping water with some of the generators in the correct direction. Because of its predictability, there are means by which you can respond. I hope that other speakers will want to say in support of their No. 1 pious amendment that this should be a serious matter for this parliament. Once you start making tidal energy in the Kimberleys, with the customer of liquefied natural gas—considering the double benefit of saving gas and having a cleaner outcome—you have an aluminium or bauxite deposit up there which could become an integrated aluminium industry based on that sort of energy. Aluminium, of course, is known as congealed electricity.

Then there is this huge opportunity to start producing hydrogen. The only fuel of this form of generation is money. Australia in an investment sense is awash with the stuff. We have our institutions, quite correctly, running around the world buying up tollways in Canada, airports in Brussels and anything else they can get their hands on because of the investment opportunities for that sort of money—a nine per cent superannuation deduction. That money is being invested overseas. It could be invested in that sort of energy generation in Australia. Once the money is spent, as the French have proved with their tidal power station, your operating costs are virtually zilch.

A company that invested in that energy production—and obviously had secured adequate markets—could use the money that people put in for their superannuation. The member for Batman said that people are really feeling pain filling up their car at the bowser, and they are. If they were refuelling with hydrogen generated from tidal power, funded by superannuation, they would be contributing to their own superannuation. Moreover, as the member for Batman said, Australia would have a perpetual, secure fuel of mobility that was totally insulated from the goings on in the Middle East and the fluctuations of petroleum pricing—which, of course, liquefied natural gas is tied to for obvious reasons.

When General Motors tells me that only 12 per cent of the world’s population owns a car today and that that is going to go to 16 per cent by 2020, along with a population increase of 25 per cent, it is pretty obvious that petrol is cheap today because of the demand factors involved. Yes, I think they will go on finding it, and they will go on finding it at greater expense every time. I think I heard someone say today that we can go back in to old resources that people thought uneconomic years ago, pump out the stuff at today’s prices and pump out even more of it at future prices, but the one guaranteed factor is that, unless we turn to another fuel of mobility, from an economic perspective it is going to get more and more expensive. So we have the opportunity. We should continue to produce our gas.

I welcome these initiatives, which are designed to ameliorate some of the costs associated with the PRRT. I am sure the oil and gas companies involved would have been happier with an increase, as mentioned by the member for Batman, in the threshold. The government has obviously decided it does not want to do that, but it is extending the olive branch to the industry in a very sensible way. We should be looking at our natural gas resources as a major export earner and at utilising them within the country for power generation. But, when it comes to moving motor vehicles, when it comes to recognising that transport consumes 50 per cent of the energy consumed in Australia, that could all be replaced by hydrogen. BMW have a technology that puts hydrogen into reciprocating motors. They are starting to install hydrogen fuel stations in Germany. So we know it all works. All we need is for governments to set some targets which say, for instance, that as at a certain date, if you do not have a hydrogen car, do not drive into Sydney. (Time expired)

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