David Johnston (WA, Liberal Party, Shadow Minister for Resources and Energy) Share this | Link to this | Hansard source

My question is to Senator Carr, the Minister representing the Minister for Resources and Energy. Given that Mr Rudd promised that Mr Ferguson would be applying the blowtorch to OPEC at their weekend meeting, can the minister explain why Mr Ferguson failed to ask for an increase in oil production at that meeting?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I thank Senator Johnston for the question. At the Jeddah Energy Meeting in Saudi Arabia yesterday, Australia called on OPEC countries to open their oil resources up for commercial foreign investment. Minister Ferguson strongly argued for an increase in oil production through the easing of foreign investment restrictions within major oil producing nations and an improved market data transparency. Minister Ferguson told the Jeddah Energy Meeting that too many countries are embracing economic nationalism and are preventing investment in stranded oil reserves. The factors which distort the demand and the supply of oil relate to foreign investment impairment, a lack of market data transparency and a lack of transparency in global financial markets. These issues can be solved only through international pressure and cooperation, and the meeting in Jeddah represents a very important first step on that front.

It is important that we recognise that this meeting is not a one-off event; rather, it represents the start of a long-term dialogue. There is no simple solution to this problem, and no one nation can shoulder the burden on its own. An international effort will be required to address these important issues, and the Australian government intends to play a constructive role in this process—

Rod Kemp (Victoria, Liberal Party) Share this | Link to this | Hansard source

Senator Kemp interjecting—

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

and I am sure Senator Kemp would be very interested in the price of petrol in Australia—because the international pressures creating the increase in fuel prices in this country should be more fully understood. The conference highlighted an agreement to work towards greater stability of global oil markets; a recognition of the need for more investment, both upstream and downstream, to ensure that markets are supplied in a timely and adequate manner; a call to improve the transparency, regulation and stability of financial markets through a commitment to improve the quality, completeness and timeliness of oil data submitted through the monthly Joint Oil Data Initiative; and a commitment to provide assistance to alleviate the consequences of higher oil prices on the least developed countries. There was also a call for enhanced cooperation between international, national and service companies from oil-producing and oil-consuming countries in investment, technology and human resources development. Finally, there was a commitment to promote energy efficiency through the passing on of market price signals. A working group has been established to pursue this action, and a follow-up conference will be held in London to review progress before the end of the year.

David Johnston (WA, Liberal Party, Shadow Minister for Resources and Energy) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Minister, is it not the case that Minister Ferguson left oil producers with the impression that Australia thinks that oil prices are simply an acceptable result of market forces, given the answer to the first question? Is it not also the case that, instead of taking a blowtorch to OPEC, Mr Ferguson actually took a box of soggy matches?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

What Mr Ferguson has done is effectively represent the policies of the Australian government. In defence of Australian motorists, he has argued the case for why there ought to be increased pressure on oil prices. This is a part of a broader strategy being pursued by the Australian government to promote policies that encourage oil exploration in new frontiers; to produce more of our vast coal, gas and uranium resources; to accelerate the development and the deployment of renewable and clean energy technologies; to promote greater energy efficiency; and to build industry capabilities through education and training.

I will just say this to you, Senator Johnston. In my trips overseas, I was advised by United States energy officials that, between the point at which it leaves the Middle East and the point at which it arrives in the United States, the oil cargo of one vessel is being traded up to 16 times on the international speculative market. (Time expired)