| February 07, 2017

Damian Drum discusses Gas Policy

Delivered: House of Representatives, Parliament House, 7th February 2017.

I would like to use this opportunity to talk about gas and electricity pricing and availability within my electorate and, in fact, the majority of Victoria.

As we have seen, there has been an incredible increase in the price of gas.

In many of the industries that are in my region—the electorate of Murray within the Goulburn Valley—our main employers could loosely be described as the food processors of the region.

Whether that is Kagome, with its tinned and processed tomatoes, or the various dairy processors of Parmalat, or Bega, or Murray Goulburn, Fonterra, Tatura Milk, these are serious and substantial employers in the Goulburn Valley.

Yet all of them are under extreme pressure with the spiralling gas prices and soon-to-be spiralling electricity prices that are going to hit them.

Also Unilever, out of Tatura, is another company that is already under pressure and will be even more so once the electricity price increases flow through as well.

The Prime Minister, in his address to the Press Club in Canberra last week, absolutely nailed this issue, with his ability to quite clearly put the policies of state governments at the forefront of the situation we now find ourselves in.

Previously we were simply talking along ideological lines.

Sure, we would all love to have a greater spread of renewables.

Certainly, we would—until something goes wrong, until we have an outage, and all of a sudden we realise that this unhealthy reliance that we have on a connector out of Victoria simply cannot supply the energy that a whole state, in this case South Australia, might need.

Also, with the state Labor government in Victoria facilitating the closure of Hazelwood and also effectively putting the use-by date on Loy Yang, we are, all of a sudden, moving towards an unviable percentage of renewables, which, because of the increases in prices, will simply not allow the industries, companies and businesses within Victoria to maintain their commercial edge.

The Prime Minister got it right when he said that what we need to be doing is looking for a reliable source of energy.

We need to be looking for an affordable supply of energy.

We also then need to make sure that we cut emissions so that we stay within the commitments we made under the Paris agreement.

In the process of doing these three things we also need to look after jobs, because what we now have is a very stark relationship between the Labor Party—and certainly state Labor governments—and their policies in relation to energy, whether that be electricity or gas, and the real threats to the jobs of the Goulburn Valley.

I just laid out six or seven or eight major employers that are all going to be under extreme pressure to remain viable under these policies, which are leading to these extreme price rises.

As we know, over the past few years there has been—and, in legislation being debated in the Victorian parliament today, they are going to be continuing—a full moratorium on conventional gas drilling.

This has nothing to do with fracking, but you can bet your bottom dollar that those who are opposed to natural gas will try to cloud the issue as best they possibly can and will say that we want to start pumping dangerous chemicals down into our aquifers and putting our aquifers and our groundwater at risk.

No, we do not.

We most certainly do not.

We are happy to keep a long-term ban on fracking until the scientists can prove that no damage will be done.

If they cannot prove that then we leave the ban on fracking. However, this country has to move towards conventional drilling for conventional gas.

Over the last few years the Southern Queensland gas fields have been connected via a 420 kilometre pipeline—three separate companies, three separate pipelines—all the way from the Bowen Basin to Gladstone.

What this has done is link all the gas supplies of the eastern states and the eastern part of Australia to Asia.

The demand over there is insatiable.

Now, when it comes to our own domestic needs, we are finding that gas prices for mums and dads to heat the home, to do the cooking and to just live their normal lives are going through the roof and making it very difficult for those that Mr Broadbent spoke about—those in the lower socioeconomic areas, which mainly the National Party represents.

Not only are mums and dads going to do it hard, but, when they go to work, their businesses, which have employed them in many instances for 15 and 20 years, are going to come under extreme pressure because they will simply be unable to accept the extra million dollars that is going to be added on to the cost of the inputs for these various food processors.

I am happy to say that in the next 2½ weeks the Minister for Resources, Matt Canavan, is going to be coming to the Goulburn Valley to meet with many of these food processors.

This opportunity to meet Minister Canavan will be open to other industries that are also heavy users of gas, because we simply need to make sure that, if we are going to change these policies, we need to get our policy settings right.

We need to make sure that the farmers still have the right of veto, so if a farmer does not want to have gas wells on his farm then he should be able to have the right of veto.

We have to push hard to make sure that is the case.

We have got to make sure that when we are talking to people, we do not let the argument run off to the side by what former Queensland Premier Anna Bligh called 'the worst debate' she has 'ever been a part of', because the Lock the Gate Alliance took that debate and absolutely made it impossible for her to run a proper process in bringing gas to northern Victoria.

I also believe that it is a very, very poor debate once those in the community who are very much against gas cloud the debate.

We know now that many of the larger companies, with previous contracts that might have been signed two or three years ago, that use a lot of gas had an opportunity to choose between four providers for their gas supplies into their businesses.

Now they are given one provider that has a take-it-or-leave-it type of approach to them with gas prices doubling over two to three years.

Whether it be the closure of Hazelwood and the potential closure of Loy Yang, the unholy push to ensure that coal is spoken about in the most horrendous tones with no thought to the supercritical ability of lower emissions coal or the ability to reduce greenhouse gas emissions by one-third in relation to some new processing plants, I think these are the types of debates this country needs to have.

We have built our industries on cheap energy inputs and we have forged many iconic industries—certainly in the Goulburn Valley we have iconic industries that have been there for many, many years and for many generations.

For generations they have run those businesses and they are very much a part of our community and we need to give them every chance to make sure that our children and grandchildren will also have those businesses in their community.

Right at the moment, the real threat is coming from energy costs.

We need to go back and have a calm debate and a calm conversation about what we are doing with our electricity prices and policies and with our gas prices and policies.

 

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