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

Let us, firstly, deal with the nature of the Latrobe Valley. The Latrobe Valley is rich in brown coal reserves. Let us also be frank, historically it is not able to be exported because it of its high moisture content and its combustible nature. The government is therefore absolutely involved with the Victorian government in exploring potential technology opportunities. The opportunities are basically driven by the private sector to which both parties are prepared to make a financial contribution and to assess potential technology, which would reduce the moisture content, and hence make it exportable. Also from an export potential it would represent a further energy opportunity for countries not as rich in resources as Australia in reducing emissions. For example, one of the projects involves Australian proponents in association with a company out of India. The lignite in the Latrobe Valley is akin to the lignite in India—high in moisture content—and if we break through on the technology front we create a new export opportunity.

I am pleased to say that there are a whole variety of potential technology solutions in the Latrobe Valley including carbon caption storage which we also committed money to in trying to guarantee the future of the Latrobe Valley. In terms of the contract-for-closure process, obviously there are a range of issues of a commercial-in-confidence nature. I can also say that a number of the applicants—as has the government—have negotiated in good faith. They are interested in assessing whether or not it is possible within the envelope provided by government to enter into an agreement over time to reduce the emissions in the Latrobe Valley in terms of the high-emitting nature of the Latrobe Valley. No-one can deny that in relative terms the emissions out of a coal fired power station in Victoria are significantly higher than most other coal fired power stations in Australia.

Hence, we also have the approach to technology of how to reduce the moisture content and, in doing so, reduce the emissions. With respect to the contract-for-closure process, if we make the breakthrough in technology, who will know what we will get out of the contract-for-closure process? There is an envelope and I will not go beyond the envelope because our assessment of what is value for money in terms of those existing power stations. Should one power station, for example, close, a change on technology can guarantee the future life and even potentially extend the life of other coal fired power stations because of the potential capacity to reduce emissions.

These processes and negotiations are continuing, including with HRL and Energy Brix. I had further discussions today including, I might say, with the Victorian government to assess all available options. The real issue is: how do we assist the Latrobe Valley in creating a new future. I remind the honourable member that, under a direct action of his own coalition party room's policy at the last election, their intent to close power stations in the Latrobe Valley was absolutely reflected in direct action. I am reminding him of the policy at the last election—he was a candidate at the last election—

Mr Chester interjecting—

It would be done by using consolidated revenue, which would close the Latrobe Valley because the coalition at the time also appreciated—

Mr Chester interjecting—

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