SUBJECTS: East Coast gas crisis; gas export control mechanism; unconventional gas moratoria 

TIM HAMMOND MP, ACTING SHADOW MINISTER FOR RESOURCES: Thank you very much for coming along this morning.

I’d like to make a few opening remarks that continue a very similar theme to the address that I’ve just provided. I think it is very important for a conference, such as the APPEA conference, that we continue a tradition that was established by ministers on both sides of the party room divide – such as Ian Macfarlane, Gary Gray, Martin Ferguson – and demonstrate a clear show of bipartisan support for the mining and resources industry which is what, I’m very pleased to say, we were here to do today.

In terms of my overall remarks, I think it is very clear that not only do we have a real crisis on the East Coast in terms of gas supply, the great shame or great tragedy is that the crisis was seen to be coming, steps could have been taken to ameliorate it and sadly here we are in the process of waiting with baited breath to see particularly what detail comes out of the restriction in relation to gas exports. It’s an important step to acknowledge in the conversation in relation to gas supply that there is a real community expectation. That regardless of the reasons, the price point for gas consumption is simply too high, both from manufacturers and from mums and dads and there’s simply no point in pretending that doesn’t exist. What we need to look at doing in a situation such as this, is undertaking a long term approach as to where the market is going to go and what we do about accessing supplies for gas.

That is also the reason for why in the course of my remarks, it is important from a Federal Labor point of view to perhaps pose as a reminder that this was precisely the sort of situation that we had in mind when we had a discussion about the national interests test as we led into the last election. We need to be asking ourselves the question, what is in the national interest in relation to delivering energy security by virtue of production of gas in this country? And we need to work out what is a way of doing that in order to ensure that we have stability and security in Australian jobs, we also take meaningful steps to reducing our emissions, and we provide consumers and manufacturers with certainty in terms of a price point for gas at a reasonable level.

Any questions?

JOURNALIST: So Tim – is it to be taken from your comments that actually Labor’s supportive of the domestic gas [inaudible] still waiting for the details on that one?

HAMMOND: Well the problem is that the devil is almost certainly likely to be in the detail. And what we need to see, in relation to the regulation, is precisely how it is going to work. One of the issues in relation to a restriction on gas exports is that it is just entirely that, it’s simply a restriction. Where is the guarantee that it is actually going to result in a more affordable price for gas? So it’s very, very difficult to comment until we actually see the detail of the regulation.

Peter –

JOURNALIST: On that point about price, in this room two days ago Senator Canavan said that gas prices in Australia should reflect the international price. Do you agree?

HAMMOND: Again, the price needs to reflect what the community expectation is in terms of getting that balance right. So it needs to reflect an affordable access point to make sure that we see industry able to actually do what it does, flourish and create jobs, and we need to see consumers not hit in the hip pocket in relation to price. So the important thing here in relation to pricing, is making sure it matches up with community expectation.

[Phone ringing – Musical ring tone]

That’s not one of the theme songs I thought might be included in relation to where we stand, but it’s not a bad effort.


JOURNALIST: One could sort of argue that community expectation, that the community expects there to be loads of cheap gas though for Australian business [inaudible] …resources.

HAMMOND: Thank you– let me be completely clear: when I talk about community I don’t talk about one sector of the community, and again this reflects in the remarks that I made, that, that what is required here is a an approach from all sides of the community, and I’m talking about stakeholders in the oil and gas industry, as to reach that point of what is commonly described in, say, a negotiation as a point of mutual unhappiness: that compromise point that we find, that all sides of the community can live with in relation to a gas price.

JOURNALIST: Minister Canavan was playing down the sovereign risk issue, I mean waiting for the detail and mechanism, but where do you stand on what the threat is in terms of sovereign risk?

HAMMOND: It’s a good question and again, the devil will be in the detail because we just don’t know how it’s likely to affect the market and how it’s likely to affect investment decisions that very important stakeholders in the oil and gas industry make. We’re just going to need to wait and see. It has always been the position of the Federal Labor Party that we need to protect jobs in this country, we need to make sure that the industry is supported, but we’ve also just got to get the balance right.

JOURNALIST: You’ve emphasised that your policy is not a domestic gas reservation policy, given the long standing bipartisan reservation policy in WA, and the lack of a gas crisis in your state, why are you so adamant about not having a domestic gas reservation policy in the East?

HAMMOND: Again, what is suitable for Western Australia is suitable for Western Australia, and I do think we need to be very careful not to necessarily tie ourselves in to one particular position or the other, because different states will have different needs, and that is why I think it is important to get the conversation right, by virtue of a reference to our national interests. So we need to look at what is in the national interest here, have in regards to the variations in different markets in different states.

JOURNALIST: Part of the problem, of course, is access at state and tertiary level to resources. Is Federal Labor trying to, you know, exert some influence on some of the state Labor governments as regards opening up to some of our onshore gas?

HAMMOND: Again, different states have different positions in relation to this, and not all states that have decided to take a line in relation to moratoria are Labor states. I mean, look at New South Wales at the moment and what’s currently at stake there. Again, they’re different conversations for different states. The Party has a process, through its state and national conferences, to work through platforms in relation to where it stands on onshore gas. As I’ve mentioned in my remarks, the Federal platform is clear in relation to ensuring that the scientific evidence is there to support exploration. It needs to be part of an ongoing and constructive conversation that again, comes back to the start of my remarks, which is that it’s important that a bipartisan approach is taken to that conversation, having regards to different states who are currently under different Party governments.

JOURNALIST: My understanding of the mechanism proposed, and none of us understand it very well, is that it’s a lot of talk about if it’s a shortfall when the mechanism kicks in, which seems to be a volume trigger, if its available, there’s no need. You seem to be talking about a price trigger, is that a difference? Is it talking about acceptable prices? Is that a different flavour [inaudible] –

HAMMOND: Again, it’s just going to be difficult to know until we’ve seen the detail. What we are cognisant of is making sure that manufacturers and consumers get access to energy and get access to gas at a palatable price point, and that’s going to be important, but until we see the detail of the regulation, it’s going to be difficult to offer any further comment.

Thank you, thanks very much.