Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

The amendments in this legislation are another important step in the creation of a modern Australian energy market. Whilst the Australian Energy Market Amendment (Minor Amendments) Bill 2008 goes specifically to the regulatory issues on gas energy, it is worth reflecting on where Australia has come from and where it is going in relation to the creation of a national energy market.

It is also worth commenting, first of all, on the importance of our national energy market. The creation of a national energy market is of importance to every single Australian. Australia must have an efficient, integrated, properly regulated, transparent energy market. The energy industry affects every other industry. It affects, in one way or another, every Australian job. It affects our homes and our lives. It will affect significantly the future of our climate and our environment.

We have come a long way from the time when there was relatively little regulation over our energy industries. And, as an aside, I have to say that the regulation of our industries is a clear case of where some of the rhetoric coming from the other side is exposed. It is an example of where the rhetoric from the other side is exposed as nonsense. The flat-earth free marketeers on the other side are always saying how we should do away with government regulation and let everything flow free, uninhibited. I think clear, detailed and comprehensive regulation such as that we are developing today is just what the energy industry needs in Australia today. This multilevel regulatory environment is what will make our energy production, distribution and retailing much more efficient, safe, environmentally friendly, and equitable. In my view this sort of detailed and clear regulation is critical to the future of our planet. Energy is the key determinant of Australia’s future economic growth and prosperity, yet global warming threatens to change all aspects of life on earth. It is a conundrum that must be regulated. We must come a long way from the days when there was only regulation around government monopolies. We are moving into a new world where there is a comprehensive framework of regulation to create a national Australian energy market.

The Ministerial Council on Energy is at the moment developing a cooperative legislative regime to regulate access to gas pipelines on a national basis under national regulatory and rule-making bodies.The Australian Energy Market Agreement commits all Australian jurisdictions to developing and applying legislation as a part of that regime. The linchpin of the new system will be the National Gas Law. The National Gas Law will be established in South Australia and then applied through application acts in all other participating jurisdictions. Western Australia will pass complementary legislation too. The development of gas industries through this legislation is reaching a point of maturity, and I welcome this.

Australia is indeed a lucky country when it comes to gas. We have very significant reserves. It is very important to our industries and it provides a more environmentally friendly alternative energy source. I think Australians are just coming to understand the importance of gas to our industries, and our growing reliance on it.

What is happening right now in Western Australia is making us all take note. The gas plant explosion and fire on 3 June has cut 30 per cent of WA’s domestic gas supply, leading to thousands of workers being laid off. Perth’s skyscrapers and shops have shut down their lifts and turned off lights in an effort to save energy. The Royal Australian Navy has been called on to hand over 16 million litres of diesel for emergency electricity generation. This situation will have a flow-through to our national economy. That would surprise many; it certainly made me sit up and take notice. In fact, what has happened in Western Australia has made everyone sit up and take notice. I think it says that we should be taking the legislation before us very seriously and that perhaps we need to look more closely at assessing the financial and human risks of this burgeoning industry. I think that will happen and that in the future we will see much more robust risk assessment and new, best practice risk mitigation measures to protect this industry and related industries.

Australia’s gas resources and reserves are very, very significant. We are still discovering how extensive they are. Just within my region, in Bass Strait and the Otway Basin, discoveries are still being made. If we play our cards right—if we get the legislative regime right, if we get the regulation right, if we get the investment right—this industry has enormous potential. Our gas resources mean we can become an international leader in R&D in the methane economy. I note that the CSIRO are doing an enormous amount of work in this area, partnering with industry in a number of gas related production areas that hold considerable promise. The CSIRO are trying to work through technical issues and form future strategies on converting gas to liquids, on converting hydrogen from natural gas, on gas processing and on syngas manufacture. The CSIRO have developed networks, companies and research bodies across Australia and around the world. So the gas industry has a very big future in Australia, and it is important to get the regulatory environment right.

Under the Australian Energy Market Agreement, the Commonwealth parliament has to pass laws to apply the National Gas Law in the offshore area and external territories. More importantly, the Commonwealth has to consent in legislation to the conferral under state law of functions such as those of the National Gas Law on three Commonwealth bodies: the Australian Energy Regulator, the National Competition Council and the Australian Competition Tribunal. This is done through the Australian Energy Market Amendment (Gas Legislation) Act 2007.

I want to say a few words about the National Gas Law, which I have previously mentioned. The Gas Law is a critical bit of cooperative economic reform that will bring the economic regulation of gas transmission and distribution pipelines under the national energy market governance arrangements. The National Gas Law provides a clear, transparent and certain regulatory environment for the industry. It will better protect the interests of consumers. Not only are we coming up with good regulatory reform for our energy sector but we are getting on with the job of implementing it. The National Gas Law is now before the South Australian parliament, with passage expected in coming weeks. This will see the first gas pipelines brought under national regulatory arrangements.

We are getting on with reform and creating the national energy market at a pace. The Ministerial Council on Energy has achieved a significant milestone in the government’s energy market reform agenda through amendments to the national electricity law; the rules and regulations for this come into force on 1 January 2008. The regulation of electricity distribution now operates under a truly national framework administered by the Australian Energy Regulator. We have also achieved significant progress in addressing barriers to renewable investment and demand-side management in the national electricity markets. COAG is developing a national framework for transmission reliable standards. The government are putting in place arrangements that will guide the strategic decisions we need to make and prepare us for any threat to our energy security. I am sure the volatility of the Western Australian suppliers will add food for thought. In short, our Labor government are planning and implementing a reliable, affordable and more environmentally sustainable energy sector. We are looking ahead to see how we can develop a framework that will enable us to make decisions about our energy usage to grow our industries, create jobs, build stronger communities and at the same time take into account the pressing imperatives of climate change. This bill is another important step along this path, and I commend the bill to the House and congratulate the minister for his foresight.

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