Dr Chris Back - Liberal Senator for Western Australia

COMMITTEES, Environment and Communications References Committee, Report

May 11, 2017

I wish to contribute to this debate, having been an active member of this committee. Can I, firstly, place on record the appreciation of all the senators for the effort undertaken by the secretary and her staff in the way this matter has been dealt with. There is a bit of an unusual outcome, Mr President, in the sense that the report to the Senate is a report that deals in six chapters with the actual facts that were presented to the committee in relation to this particular matter. It will be seen, now that it has been tabled, that there have been no recommendations come forward to the Senate as a result of this inquiry. When you scrutinise the outcome of this particular inquiry, you will see that each of, I think, three of four groups of senators have in fact put in additional comments. I speak then on behalf of Senator Reynolds, Senator Gallacher and me. The additional comments conclude with 1.102, in which we say:

We support oil and gas exploration in the Great Australian Bight subject to continued strong oversight by NOPSEMA.

There are many, many reasons why we have drawn that conclusion. Can I join with Senator Whish-Wilson and others in making the point of just how vitally important the Great Australian Bight is as one of our marine areas around the Australian coastline. It is the fact that there must be tremendously regulated circumstances in place for any companies that might want to explore or extract product in the Great Australian Bight. But that is no different to other marine areas around Australia. Our own North West Shelf has a highly developed offshore oil and gas industry. Indeed, speaking of whales, because southern right whales have been mentioned by many people in submissions and evidence to the committee, is it a fact that the humpback whale is very active up and down the Western Australian coastline? In fact its numbers have increased significantly over time. It is also a fact that under the management of then Premier Barnett that Camden Sound was declared, what I believe, to be the largest whale sanctuary in the world.

What it proves is that, with excellence, diligence and oversight of a very competent body, such as NOPSEMA, it is possible to meet both sets of objectives, those being to protect the marine environment and to be able to explore, exploit and, hopefully, extract hydrocarbons. Why is it that the Great Australian Bight has been identified as a prospective area? CSIRO many years ago came to the realisation that the Great Australian Bight is an entirely prospective area. It has challenges—it has deep water—but companies these days, as I believe Santos and Murphy Oil indicated to us, are perfectly competent and comfortable with drilling down to some 4,300 metres.

People talk about adverse weather conditions. Those of us who know a little about yachting and boating conditions in the Bass Strait know that they are also very harsh conditions, but we also know that for 40 years there has been extraction of hydrocarbons in the Bass Strait. That particular project has not only provided energy, for the state of Victoria particularly, but generated some 50,000 jobs and contributed some $200 billion to GDP in the Bass Strait alone.

I speak of the North West Shelf. Already there is oil and gas extraction by companies like Woodside. Increasingly into the future, it will be Chevron, but we know that Shell and ExxonMobil and others are involved. Off the North West Shelf we have already seen some $60 billion of export revenue, some $70 billion of contribution to GDP and more than $5 billion of return to the federal government by way of taxes.

Why is it so important that we are looking to these locations for extraction? Australia now imports around 80 per cent of its crude, which is then refined into petroleum products. Beside the fact that that is costing us some $34 billion a year, we will move to the stage relatively soon, probably by about 2026 or 2027, when we do not have any oil here. The only oil we are going to have will be condensate that comes off as an offshoot of the LNG processing.

The other disturbing fact, as was pointed out to us by the International Energy Agency, is that Australia is now down to less than 45 days of product—in January, I think, we were down to about 39 days. People say, 'Can't we add either the refined or crude product coming in from overseas?' The answer is, no, we cannot. When you look at the two main areas from which we derive crude coming into this country, it is either through the South China Sea or the Strait of Hormuz between Iran and the United Arab Emirates. Neither of them are regarded as being safe locations. We know that there is product in the Great Australian Bight. We know that NOPSEMA is an excellent overseer. I seek leave to continue my remarks later.

Leave granted; debate adjourned.

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