Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

In Perth yesterday morning, I had the privilege of addressing the annual convention of the Association of Mining and Exploration Companies, better known as AMEC. I use the word 'privilege' quite deliberately, because this is a gathering of those who will be largely responsible for driving the success of our mining and resources sector in the years ahead. By extension, this means they will also be responsible for creating jobs for thousands of our fellow Australians over the coming decade.

Perhaps the thing that struck me most clearly about yesterday's event was the very welcome mood of optimism present amongst the delegates, because here in Canberra often all we hear is people talking about the mining industry in the past tense. 'The boom is over,' we are told, and efforts are made by some in this parliament to talk about the mining and resources sector as a relic of the 'old economy'. Discussions about the potential contribution of renewable energy are all very well. However, it is the mineral and resources sector that we know is capable of providing our energy needs today, and of creating jobs for today and tomorrow.

This is one reason why earlier this year, prior to the delivery of this year's budget, the Abbott government made the passage of the Exploration Development Incentive a key legislative priority. Small miners have long called for recognition in taxation arrangements of the long lead times between investment, exploration and production. Small exploration companies often must wait many years before tax losses from exploration expenses can be utilised. Many will never generate sufficient income to utilise their losses. This government legislated the Exploration Development Incentive because we are committed to doing something to assist in a responsible, economically effective manner. Discussions and presentations at yesterday's convention made it clear that the Exploration Development Incentive has been widely welcomed by those involved in mineral exploration. It is already making a very real difference in terms of working to develop the projects that will ensure the future strength of mining in this country and in terms of job creation in a challenging economic environment.

Of course, when it comes to meeting our energy needs and job creation, Australia does not rely on mineral exploration alone. The oil and gas industry is one of Australia's success stories, especially in my state of Western Australia. Its importance to our national economy by way of export revenue, job creation and regional development cannot be overemphasised. In 2013-14, Western Australia had a record $121.6 billion in sales from the minerals and petroleum extractive industries. The petroleum sector alone was valued at $26.5 billion, an increase of nine per cent on the previous year. This represents 22 per cent of the total value of resource industry sales for Western Australia, placing petroleum as the second most valuable resource after iron ore. There are also ongoing capital investment commitments in the state's petroleum sector and, as at February 2015, it was estimated that $152 billion worth of resource projects were either under construction or otherwise committed, and a further $75 billion is identified as being allocated to planned or possible projects in the coming years.

The economic benefits to the state do not end there. Strong growth in Western Australia's resources sector is set to continue as more liquefied natural gas projects come to fruition. Among these, the Gorgon LNG project is scheduled to commence production later this year, to be followed by the Wheatstone and Prelude projects in the next couple of years. As these projects move from the construction phase to the operational phase, skilled workers will be required for the new gas plants at Barrow Island and Ashburton North. This is part of the transition from the construction to the operational phase of the investment cycle, with the focus moving to more highly skilled, long-term jobs in operations, maintenance and logistics support. Additionally, further opportunities will be available in research, training and development.

With LNG exports expected to more than triple by 2018-19, Australia is poised to become the world's largest LNG exporter by the end of this decade. This is an extraordinary achievement. It reflects the remarkable breadth of knowledge and technological know-how in the industry in Australia, and the diversity of our abundant natural resources. Domestically, Western Australians use more oil and gas than any other energy source and this trend is expected to increase in the years ahead. The importance of a secure and reliable gas supply for Western Australia cannot be overstated because it is the most energy and gas-dependent economy in Australia. Natural gas fuels half of WA's primary energy needs and 70 per cent of its electricity generation. This compares to 22 per cent and 16 per cent for Australia as a whole. A secure and reliable gas supply will underpin jobs, investment and economic growth in WA into the future.

Just as Western Australia's long-term interests are served by maintaining access to open and competitive markets for iron ore, wheat and cattle exports, the same is true for gas. WA's LNG industry is a source of comparative advantage that should be harnessed, not hindered. It is delivering valuable infrastructure that will aid the development of the domestic gas sector and will provide substantial investments for decades to come. This is why all of us—government, industry and community—have a huge stake in safeguarding its future, a future that relies on exploration and production from unconventional gas fields. The further development of WA's onshore gas resources—unconventional and conventional—has the potential to deliver significant social, economic and environmental benefits to the state and the nation.

It is vitally important to encourage shale gas exploration in WA not only to provide a clearer picture of the extent of the resources but also to promote a rational, objective and fact-based discussion of environmental and land access concerns, especially in the Canning Basin, which is located in the East Kimberley. Western Australia is in the fortunate position of being able to build on a strong record of leading operational and regulatory practices in the oil and gas industry. Many of these have been conveniently ignored by the anti-gas propaganda coming from the Greens, which is solely designed to alarm local communities and landholders. In this regard, I note the recent comments by Mr Stedman Ellis, the Chief Operating Officer for the western region of the Australian Petroleum Production and Exploration Association. He has urged communities in WA considering these issues to keep an open mind and look carefully at the facts, in particular noting that in Queensland fracking and gas exploration activities have been largely responsible for reversing the decline of many regional communities. He said:

The facts are that frocking is a safe, reliable, well-understood technology that's been used in WA and elsewhere since the 1950s and demonstrably it's had a very significant positive impact in other regional communities.

He also noted that the scare campaigns being run on this issue:

… can confuse and scare people and I think unreasonably lead some of the community to miss out on some of the opportunities that the gas industry can bring in terms of jobs and economic opportunity and environmental responsibility to the region.

Despite the numerous scientific reviews and decades of practical experience showing the material risks to the environment from shale gas extraction to be very low and that best practice operational and regulatory approaches can ensure that resources are developed in an environmentally responsible manner, one party, the Australian Greens, continue to rally against not only shale gas exploration but the oil and gas industry as whole. They use political activist groups like Lock the Gate or Frackman to seek a moratorium on fracking in the entire Canning Basin until another comprehensive, rigorous and independent review has been conducted. They support the trespassing on and the vandalism of private property and facilities, and the use of scare tactics and fearmongering in the communities in the Mid West and Kimberley regions of my home state of Western Australia. They demonise rural landholders who support oil and gas exploration, and condemn those farming groups that are working with the petroleum industry to develop access agreements and codes of conduct.

The Australian Greens need to be honest and upfront with the Australian people about their real objective, which is about not the environmental impact of fracking but the prevention of natural gas from becoming a major fuel source for the generation of energy as opposed to renewable energy. Their antifracking policy is solely about exerting political influence, rather than achieving environmental outcomes.