Christopher Back (WA, Liberal Party) Share this | Hansard source

I am delighted to continue my comments on this bill and to draw to the chamber's attention that it is always easy in 2017 to say, 'The North West Shelf is there. Gorgon, Wheatstone and Ichthys are there. The Queensland projects are there.' They were not always there.

I draw attention to the chamber that back in the 1970s Sir Charles Court, the absolute dynamo of Western Australia and Australian industry, negotiated with the federal government that there be a fairer sharing of the royalties and the income that would come from the possibility of a North West Shelf. Remember, Woodside had made no investment. There was a prospectivity but there was no wealth. It is easy in this year to look back and say, 'Look how much money we have all made out of it,' and, 'We're rushing towards being the world's biggest exporter of LNG,' but in the 1970s there was nothing there. A huge risk was taken. Quite correctly, Sir Charles Court said to the Prime Minister of the day, 'We in Western Australia are going to take the risks. We're going to be doing the work. You will enjoy the royalty benefit of the LNG that might come'—might come!—'from the success of a North West Shelf.' As a result of that, a decision was taken at the time that should there be any gas and condensate found there would be no tax at all to the company on condensate to give them an incentive. That was done so that in the possibility of there being some success from that exploration they would at least have a motivation and an incentive. As we know, along came Prime Minister Rudd, and he put paid to what had been a long-established principle.

The importance of this bill before us is that it takes into account the sharing of royalty income between the Commonwealth government and the state, or states. As we know, on the seabed hydrocarbons move. They might be in state waters. If they are within or around an island they may be in Commonwealth waters. As extraction takes place the hydrocarbons move. This is part of the reason for the Offshore Petroleum and Greenhouse Gas Storage Amendment (Petroleum Pools and Other Measures) Bill coming before us.

I am delighted that Senator Moore yesterday courteously supported this bill on behalf of her party. She made some very good points about resources and their contribution, and about the efforts in Western Australia of the member for the Pilbara, Mr Grylls, who would be absolutely torpedoing future investment—in that case in the iron ore industry—as a result of ill-founded and poorly thought out claims made for his own cheap, political advantage.

As a result of the efforts of Charles Court and others the decision was taken at that time that there should be some preference for domestic gas supply. Why would that be? Simply because at that time the risk was on the people of Western Australia. Charles Court negotiated what was called a take or pay agreement—in other words, should Woodside proceed and should they find gas, then there would be an automatic market for that gas. At that time, of course—as I know myself—in WA there was no reticulated supply of gas. So the people of Western Australia and indeed Alcoa, the aluminium company themselves, took an undertaking that they would purchase in advance significant proportions of that natural gas. So today we have a scenario in place in WA where at least 15 per cent of all new LNG supply is guaranteed for domestic gas.

Mr President, I would humbly request through you that I have some silence or at least quiet if that is possible.