Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Hansard source

Unfortunately it is something the member for O’Connor does not understand. We operate in a global market driven community. In the meantime, we need to work with the international oil companies and OPEC countries, to encourage them to invest as much as possible in additional production capacity. There is also a need to improve the quality of data available about reserves in OPEC countries and demand in the rapidly growing economies such as China. The non-OECD countries where economic growth is highest are also the most energy intensive. The fuels that are the key to economic growth are the middle distillates—diesel, jet fuel and kerosene. Demand for these fuels is growing much faster than for other refinery products. Refineries around the world have no spare capacity at the moment to increase their output of diesel and jet fuel.

Also, these refineries have to cope with changes going to the availability of crude oil, changes which mean there is less potential at the moment for middle distillate production without more hydrotreating and coking. Middle distillates are also the fuels produced in gas to liquids and coal to liquids processes, something the government has spoken about over a considerable period and something the previous government unfortunately neglected as a serious debate.

We as a nation will encourage producing nations and the international oil companies to accelerate the development of next generation gas-to-liquids and coal-to-liquids technologies that could reduce cost and, in the case of coal to liquids, improve its environmental credentials. That is why, just as in relation to coal fired power generation, the development of carbon capture and storage technology is important. I am pleased to advise the House that earlier this week the government introduced the carbon capture and storage legislation going to offshore storage of CO2.

In conclusion, an international effort is required to address these important issues. I hope the Jeddah energy meeting will be a step in the right direction. Let us ensure that the global community does not waste this opportunity.

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