SUBJECTS: Gas crisis, energy in the Hunter.
ABC NEWCASTLE 1233
MONDAY, 25 SEPTEMBER 2017
HOST PAUL BEVAN: A couple of reports have come to the Prime Minister Malcolm Turnbull today that the east coast faces a gas shortage three times worse than expected. He has responded saying he won’t rush into imposing gas export restrictions although the trigger remains there ready to be pulled if necessary. One person who has paid particularly close attention to gas, particularly in his local area which is the Hunter is Joel Fitzgibbon. He is the member for Hunter and he has been very vocal about his desire to see more gas fired infrastructure and industry in our area. He is with me now. Joel Fitzgibbon thanks for joining us.
JOEL FITZGIBBON, SHADOW MINISTER FOR AGRICULTURE, FISHERIES, FORESTRY AND RURAL AND REGIONAL AUSTRALIA: A great pleasure, Paul.
HOST: Does it come as a surprise to the opposition that the gas crisis is three times worse than we thought?
FITZGIBBON: Not necessarily a surprise but it is disappointing that is much larger than we anticipated but in a sense, the quantum isn’t all that important. Whatever the quantum is, we simply need to respond and we need to respond in two ways. We need to redirect some of that export gas back into the domestic eastern market and we need to get more gas out of the ground including from big projects like the one in Narrabri.
HOST: You were part of the Government that put the original groundwork in place that has lead us to this ultimate situation. If you had maintained Government, what would you have done to avoid this from coming from what was put in place first?
FITZGIBBON: Paul it’s interesting the way people like to rewrite history isn’t it. I remember right back in the early 2000s John Howard announcing with great fanfare the $25 billion gas export deal into China. That was front page of every newspaper and when we started to do the same thing in Queensland, that too was celebrated. Government was warned at the time that would well and truly get the eastern market into global gas prices. Now that didn’t mean prices would go up or down, the warning was we would be more influenced by what was happening on the global market and no one at that time issued any criticism of that or raised concern but now with the benefit of hindsight people are trying to rewrite history. We need to be looking forward now determining how we best fix this problem.
HOST: Why wouldn’t it ever be the case that if we were going to hook our gas prices to the international market that they would go up further than we were comfortable with?
FITZGIBBON: Because two things have happened, you know, at that time, global prices were not high and since that time some of those projects in Queensland which were feeding eastern markets as fully developed as was anticipated. So no one saw this coming so certainly no one in the Liberal Party or the National Party at the time was in anyway critical of the decision when they were made. Again it is easy to look back and criticise. What Malcolm Turnbull really needs to be doing is using the power available to him now, something he has very strangely been unprepared to do.
HOST: One of the things, forgive my ignorance here, that I still don’t understand is it appears our overseas customers are buying the gas cheaper than what we can buy it. So if we are linked to the export market, why aren’t we paying at least as low a price for our own gas than what our customers are?
FITZGIBBON: Because there are two markets. There are contract markets and spot markets. To ensure themselves, something we are looking for is security of supply, they enter into longer term contracts and depending on where the prices are at the time, they might be high or low. But it is very ironic in fact that some of those who are locked into long term contracts as consumers in Asia are paying more for their contracts than they could secure gas on the spot market and we would rather be selling it here on the domestic market where we need it more so it’s rather strange that these contractual arrangements are disadvantaging both supplier and customer. It is very complex but that’s an area in which Malcolm Turnbull could be playing a role. Malcolm Turnbull did something very welcome today and I absolutely agree with it. He put more pressure on state governments to get domestic gas out of the ground. Santos’ project in Narrabri there is about enough gas to meet about 50 per cent of NSW’s needs and that is a big reserve of gas just sitting there. It has been sitting there too long and we need to get it out of the ground and to market.
HOST: That comes with its own problems of course. There are a lot of people that are worried about gas coming out of the ground and new untapped markets. If you regained Government would you be saying yes we will be doing that too?
FITZGIBBON: I know Paul there are a lot of people out there expressing concern because I’ve also been criticised over the course of the last six years at last for pushing people to prove some of these gas reserves. Now AGL walked away from part of the Hunter Valley which was very disappointing. People rallied against these gas projects without looking at any of the facts whatsoever. There will be some gas projects that might not meet the environmental tests that might pose a threat -
HOST: It’s not only the environmental test it’s also the ALP is trying to, through brinkmanship and one-upmanship to say our green credentials are better than yours and we are going to meet more targets than you are against the Coalition. Would you be able to do that if you are suddenly freeing up all these gas reserves?
FITZGIBBON: Paul it’s the Liberal Government in NSW that has locked up gas and is refusing to let these companies extract it from the ground so you know, let’s not get into a political debate about whose fault it is. I don’t understand why the NSW Government can’t revisit its moratorium and start having a look at these projects on a case by case basis, applying the most stringent environmental tests and allowing us to get gas out of the ground where it is possible to do so. You know every time we dig coal out of the ground in an open cut coal mine, we let gases go into the atmosphere. We should be harnessing that energy to our own benefit.
HOST: Kieran sent me a text earlier on and I wasn’t necessarily going to go into this information with you but I will bounce Kieran’s question off you. ‘Could I please ask you why we need to import gas?’ – which is something you would like us to have the infrastructure in Newcastle Harbour to do when Australia already exports it cheaper?
FITZGIBBON: All I was talking about was a receiver terminal to bring gas from other parts of Australia if necessary.
HOST: So you would have to put it on a ship, in where Queensland? And bring it down into the port of Newcastle and take it off the ship?
FITZGIBBON: Or indeed of the west coast Paul. It is theoretically economically viable particularly with prices where they are, but gee wouldn’t that be a disappointing outcome if we were having to liquefy the gas and bring it to the east coast market. But AGL do have a proposal in Victoria to establish a receiver terminal basically for that purpose so thank goodness they are planning ahead with that contingency, but it’s where we find ourselves Paul and we should never have been in this position. I mean opposition to coal seam gas in particular has become an ideology or a religion. People are just opposed to it regardless of where it is, what the circumstances and facts are. We have to change that community attitude. The Government including the Government of NSW needs to show leadership, get that gas out of the ground and get it to the east coast market as quickly as possible including all those manufacturing plants that rely so heavily on it here in the Hunter and of course the best opportunity to establish gas fired electricity generation in the Upper Hunter.
HOST: Joel Fitzgibbon, thanks so much for your time this afternoon
FITZGIBBON: It’s a great pleasure Paul.