Scott Ludlam (WA, Australian Greens) Share this | Hansard source

I do not propose to speak for all that long on theTax Laws Amendment (2009 Measures No. 3) Bill 2009, but I would like to address a couple of comments to schedule 3 of the bill, which deals with petroleum oil and gas resources, which obviously have quite a degree of significance in Western Australia and for the nation as a whole. The amendments that I wish to address are the ones that are specifically targeted at enabling oil and gas explorers tax concessions to get into deeper water and to get into smaller and more marginal oil and gas deposits, which is essentially what it is starting to look like in the North West Shelf and certainly in the Browse Basin. The explorers have proved up most of the large gas resources in that part of the world and are now essentially heading into deep water to look for the smaller and more marginal oil and gas reservoirs.

The comments that I want to make really go to why exactly these amendments are being proposed. I should say at the outset that the Greens will be supporting this bill but want to put some comments very clearly on the record as to what the bill indicates is actually going on, because it is the tip of a pretty serious iceberg. Why would we want to encourage, through tax concessions—which have impacts on the broader economy—getting into deeper water to explore for smaller and more marginal oil and gas reserves? The reason is that we are running out of those resources not just in the North West Shelf, not just in Australia or Bass Strait but around the world. These reserves are running out. We have had a pretty good idea since the 1950s and 1960s of the planet’s oil reserves, and we are starting to get a much clearer idea now of the finite nature of gas reserves as well. It is not that we are getting down to the last barrel or the last drop of oil and gas, but we are reaching the point where growth will be unable to continue and we will need to deal with depletion, with less every year instead of more every year. We have built the kind of economy that does not handle that sort of thing very well.

What we are seeing here and what this bill reflects is really a symptom of the worldwide scramble to chase ever-smaller and more marginal oil and gas fields. There are two separate issues here that arise from the same cause but that are about to catch Australia in a very serious vice. They both rest on the economic model that dominates thinking on this issue, which is that we must liquidate our hydrocarbon assets as rapidly as possible as cheaply as possible, that we must get them out of the ground, sold and dumped into the sky just as rapidly as technology and tax breaks will allow and essentially that we must liquidate or asset-strip Australia’s reservoirs of hydrocarbons as quickly as we can.

There are two consequences that flow from this; most obviously, the first one is climate change. My dear friend and colleague in the Western Australian parliament, Robin Chapple, in his inaugural speech about a fortnight ago, totalled up the consequences for Western Australia of the scramble for gas resources in the North West Shelf and across to the Browse Basin off the Kimberley. He said:

If we tabulated the projected—

greenhouse gas—

emissions from the two new Woodside Pluto trains, the Woodside Browse Basin project, the Dyno Nobel explosives plant, the current Gorgon two-train proposal, the Yarra Holdings explosive plant, the Apache Reindeer proposal and the BHP Scarborough gas development … emissions would rise by at least a further 21.5 million tonnes per annum, lifting Western Australian emissions to around 110.5 million tonnes per annum. This—

just on the rough calculations, based on publicly reported data by the companies themselves—

would increase WA’s greenhouse gas emissions to 90 per cent of our 1990 emissions.

This is while the country is meant to be trending down. He continues:

This does not include any of the proposed expansions articulated by Don Voelte, chief executive officer of Woodside, in yesterday’s Western Australian Business News.

So Australia is committing to a maximum increase under Kyoto, which was very strongly fought at those negotiations, of eight per cent above our 1990 levels, but apparently this does not seem to apply to Western Australia. The scramble to get the gas out of the ground and burn it as rapidly as we possibly can is leading to those very steep projections of greenhouse gas emissions. Apart from trying to undermine and weaken the government’s Carbon Pollution Reduction Scheme as radically as they can before it is put to a vote, I do not think the oil and gas companies have any idea at all how to address those emissions. So that is the first greenhouse gas consequence of this rather innocuous looking amendment, which seeks to enable and further push the boundaries of what is going on around the country.

The second consequence of course is peak oil, which was debated briefly on Tuesday and again by Senator Milne yesterday. We are starting to run out of these reserves. There are some very interesting corporate tactics going on in Western Australia at the moment about where the gas plants will be located, which reservoirs they will tap and where the pipelines will go. This really is part of the end game, because I think the companies have realised that this resource is not going to last for ever.

It is arguable at least that the parliament is starting to come to grips with climate change—20 years too late and with a mixture of genuine intent, reluctance, compromise and outright denial, but at least the parliament has begun that work of grappling with climate change. But I do not think we are even at first base with fossil fuel depletion. A debate that we had in here on Tuesday was around a fairly simple amendment—and I am glad Senator Conroy has joined us in the chamber—to just put in a little bit of scrutiny by the minister when signing off on large-scale national infrastructure projects that would have bearing on oil vulnerability, on fossil fuel vulnerability. Of course, that was defeated. I think we went down six votes against the rest of the chamber. I think that is something that we will probably come to regret, and I hope we do not see too many more of those votes in the near future. We are simply not facing up to and addressing this issue yet in this parliament.

There was a degree of interest in Western Australia, partly because of the hard work, again, that my Western Australian Greens colleagues have put in in state parliament over many years. We also had a planning minister, Alannah McTiernan, who was awake to the issues of peak oil and who did quite a bit of work within the Western Australian government in trying to shift the priorities—the spending priorities and the planning priorities—to at least begin to address the issue that fossil fuels, on which our economies are based, are finite and will eventually and perhaps in the very short term become extraordinarily expensive. So we did see some moves in Western Australia, but effectively they have been snuffed out, and there has been no such work done in the Australian parliament, as far as I am aware. A couple of years ago the Standing Committee on Rural and Regional Affairs and Transport handed down a very good report, with strong involvement by Senators Milne and Siewert, but nothing has arisen from that as far as I have been able to tell.

The Australian Association for the Study of Peak Oil and Gas, which is an offshoot of a large and reputable international organisation based in Sweden, points out that a growing number of estimates of the date of peak oil—that is, the halfway point where the economy needs to deal with less every year rather than more—cluster around 2010 to 2015, and there are actually estimates that say that the age of global cheap oil reserves has in fact passed already and that the only thing that is masking that price signal is what is going on in the world economy at the moment; those things, I suspect we all hope, will pass.

There are a couple of pretty sensible recommendations in the paper that I am reading from here, which is an appendix to a study that was done by Bruce Robinson and Sherry Mayo for the Association for the Study of Peak Oil and Gas. They made several pretty common-sense recommendations about what governments could be doing, and I would ask any people in here today whether they can identify whether the government is doing any of these things at all:

Issue repeated credible warnings that oil shortages are approaching us. Advise the community openly of the various estimates of the timing and—

probable—

impacts of peak oil.

If that has been going on, I have clearly missed it.

Engage the community, through participatory democracy, to create practical, equitable options and countermeasures, and to select preferred steps.

None of that is occurring.

Dismantle the many “perverse polices” that subsidise heavy car use …

We are embedding these perverse policies—or, at least, the government is seeking to embed or entrench some of these policies—in the CPRS, which will favour private motor transport over public transport for three years.

Instigate policies, taxes and pricing regimes that encourage frugal use of fuel …

There is not a great deal of that going on either.

… Smart-Card personal fuel allocation system.

That is not under any kind of active consideration.

… nationwide “individualised marketing” travel demand management campaigns—

for both urban and rural regions. I would like to point out that TravelSmart, which originated in Western Australia, has been rolled out to a limited extent around the country, but it is getting by on the smell of an oily rag. It is doing incredibly important work to complement the work that non-government organisations do, but it is the kind of thing that would need to be scaled up quite rapidly.

Divert infrastructure funding to less oil-dependent urban structure and transport options.

I think the government would probably argue that we saw the first hint of that in the last budget, where we have started to see some Commonwealth investment in public transport options, which we have obviously been pushing for for a long time, and we saw investment in the stimulus package owing to negotiations with the Greens on cycle paths and public transport, so there are the beginnings of some of these turning points, but it is not systematic. It is haphazard and it is driven, I think, more by the media cycle than by any deep understanding of just how vulnerable we are to an oil shock.

One of the other points Bruce Robinson and Sherry Mayo raise is about prioritising access to remaining oil and gas supplies and quarantining them, because our food at the moment is entirely dependent on cheap fossil fuel. So they suggest:

Priority access to remaining oil and gas supplies must—

be—

provided for food production and distribution and other essential services.

People working in priority jobs where public transport is impractical, such as night shifts at hospitals and crucial infrastructure roles, should receive special consideration. If the Commonwealth government is undertaking this sort of analysis of priority access to remaining oil and gas supplies, I would be delighted to hear about it, but I suspect that this work is not really going on. I asked Defence about this in estimates hearings in February, and they told us that they are an enormous consumer of oil and gas but that they were not actually aware of whether they will have any special call on these resources in the event of an oil shock, which I thought was interesting. The paper says:

Remote indigenous communities will have special needs.

Reviewing the oil vulnerability of our communities, sector by sector and industry by industry, is not occurring. The last point that Bruce Robinson and Sherry Mayo raise is the idea of an oil depletion protocol, and I do not know that that has had a great deal of debate in here. Unless the Greens raise it, it just seems to be falling on deaf ears. An oil depletion protocol would establish a small levy, which would escalate, to account for the transition away from fossil fuel dependence as oil depletion hits.

I do not think we are seeing any of these sorts of things. The lead minister on this issue, I was told earlier in the week, is Minister Martin Ferguson. I think it is really high time that we heard from this minister what exactly the Commonwealth government’s strategy for oil depletion and vulnerability to oil shocks actually is. It is very difficult to come to the conclusion that we are actually flying blind and that there is nobody really paying close attention to this issue in the way that you could at least argue that climate change is now being dealt with.

We will be supporting the bill with those comments on the record, but just with an eye to the fact that what we are doing here is enabling the brief extension of the age of cheap fossil fuels. One day, I suggest, we will be looking back and wondering why we did not have our eyes open to this issue, which has been pretty clearly coming down the line for a long period now.