Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Hansard source

We have no plans to produce a gas reserve policy in this country, for a couple of reasons. One is that we need to make sure we attract investment in our energy resource. But where we do agree, Senator Lambie, is that we need more gas. We need to develop more gas. And I would be concerned that restricting the market for that gas only restricts the returns or the profitability of that development and then potentially limits and reduces investments. So, we need to be very careful about going down that path.

You mentioned the United States. Well, the United States does not have a gas reservation policy. What it does have is a large domestic market which has traditionally soaked up all the gas that has been developed in the United States. It is in fact, right now, building LNG terminals on its south coast, and very soon it will be a major exporter of LNG into possibly our region, the Asia-Pacific region, from its resources. You are right that they have been able to tap and extract relatively low-cost resources. They have not faced the same moratoriums or bans we have in this country and various state governments have allowed the development, and that has allowed them to get costs down, to get to a scale that has been very competitive. I am not sure whether you were in the chamber earlier when Senator Xenophon was contributing, but it is also the case that a lot of their shale gas or shale resources also produce a fair amount of tight oil and a wet resource as well, which helps them lower their costs and become more competitive. The coal seam gas we have developed in this country so far does not have those oil resources partnered with it, so, generally speaking, it is of a higher average cost.

We are seeking the same objective, Senator Lambie, but a gas reservation policy, I think, requires very careful consideration. The Western Australian government has had such a policy for some time; it does not seem to have greatly increased the amount of domestic gas available in that state. I think we can look at other ways and better ways, particularly the unnecessary and illogical moratorium on even conventional gas that is coming into the Victorian parliament. That is what we should focus on; that is most prospective; and that is where we can get a solution to this issue.