Alan Eggleston (WA, Liberal Party) Share this | Hansard source

On behalf of the coalition members of the committee, I would also like to make some remarks on the inquiry. The Varanus gas explosion and its sequelae have been a major disaster for Western Australia. The reduction in the supply of gas caused immediate and enormous disruption to industry around the state, particularly in the south-west, which overall, according to the Chamber of Commerce and Industry of Western Australia, lost an estimated $2.5 billion in income. Coalition senators are of the opinion that, while the state government appeared to move quickly to deal with the gas crisis, setting up both the Gas Supply Coordination Committee and the Gas Supply Disruption Recovery Group, this either disguises or ignores the fact that, despite two previous incidents where gas supplies were compromised, the state government did not have a contingency plan in place to deal with a major disruption in the supply of gas from Dampier such as was caused by the Varanus explosion. Accordingly, coalition senators believe that the state government deserves severe criticism for this omission.

There was evidence that the state government’s failure to keep business informed led to a fall in confidence in its ability to handle the crisis, particularly in the south-west. This was highlighted by the government’s decision, the coalition senators believe, to leave the distribution of gas to market forces—the bulletin board system—instead of declaring a state of emergency which would have enabled the state government to equitably direct gas to where it was needed. The role of Minister Logan was also a matter of concern to coalition senators. Although Mr Logan sought to defend the government’s actions in his answers to questions on various issues from coalition senators, including Senators Johnston, Bushby, Eggleston, and Adams, the coalition senators were not convinced by his answers. Coalition senators are of the view that Mr Logan, as energy minister, should have been aware of the 1998 ESSO Longford gas explosion and its consequences. He should also have been aware that New South Wales has a contingent emergency response plan in readiness for any possible disruptions to its supply of gas. From evidence provided to the committee, coalition senators concluded that Minister Logan understood the potential economic impact on industry, especially in the south-west, from any disruption to the gas flow through the Dampier to Bunbury pipeline. Accordingly, the coalition senators hold the view that his failure to put in place a contingency plan to manage such an event amounts to incompetence on his part for failing, as the minister, to ensure that such a plan was established.

Coalition senators are concerned that insufficient attention appears to have been addressed at government level to the potential danger of Western Australia’s heavy dependence on gas from the North West Shelf and believe that, if there is a lesson to be learned from the Varanus incident, it is that there is a need to diversify the sources of energy available to supply the south-west grid and the south-west of Western Australia in general. We concur with the majority report on these matters. While businesses across Western Australia have felt the impact of the Varanus explosion, coalition senators would like to make a special acknowledgement of the south-west region of the state, which suffered severely in the crisis. During the hearings in Bunbury, members of the committee heard firsthand what impact the loss of gas was having on industry. It was made known during the Bunbury hearing that various businesses in the south-west operated with equipment which required a consistent and predictable supply of gas. The operations of such businesses were compromised in this crisis by the intermittent nature of the supply of gas provided to them.

Coalition senators are of the view that the bulletin board which was established as a secondary gas market during the crisis was severely flawed in at least two areas. Firstly, it failed to ensure the provision of gas to essential services, including the food industry, and, secondly, it left small businesses at a disadvantage. Furthermore, it has also been submitted that, as a result of the failure of the state government to intervene, the bulletin board appeared to have allowed price-gouging tactics by energy suppliers. A most concerning feature of the aftermath of the Varanus gas explosion has been that, as the gas supply has been re-established, prices for gas—and, more importantly, electricity—have reportedly been substantially raised.

As a result of this inquiry, coalition senators believe that in the public interest there is an imperative requirement that there should be further investigation to determine whether the management of the crisis by the Western Australian government was negligent and that the question of compensation to injured parties should be considered. Coalition senators recommend accordingly that the state government be called upon to establish a judicial or other major independent inquiry to investigate the consequences and management of the Varanus gas explosion. I would add that the coalition senators concur with the majority report conclusion that there is a need for a conference of all interested parties to be held to plan for the response to any future such interruption of the gas supply through the Dampier-Bunbury gas pipeline.

Coalition senators also concur with the view that Alinta’s late correspondence to the committee, in which they claimed that they did not appear before the committee because they were not subpoenaed, is gratuitous because they were previously invited to appear before the committee and in writing responded saying that they would not do so.

We also agree that there could have been a far better response from the department of social security to assist those workers in various industries in the south-west who found that their employment was not continued due to the consequences of the Varanus gas explosion and its sequelae.

In conclusion, this has been a major disaster for Western Australia and, given the unusual dependence of industry in the south-west of Western Australia on a single gas pipeline, it really is imperative that a plan be put in place to ensure that any future incidents such as this will not have such severe consequences, if that is possible.