Barnett: WA still set to cash in on gas boom despite James Price Point Wednesday 26 June 2013 1:00PM Some media reports have begun suggesting the booming Western Australian economy is heading towards a recession. But Premier Colin Barnett, who’s recently returned from China, told RN Breakfast’s Gregg Borschmann the state is on track to cash in on the natural gas boom. Colin Barnett: I was in China two weeks ago. A new regime of President Xi Jinping is very clearly about cleaning up China’s environment, both in approvals for major projects but also in cleaning up emissions into the atmosphere. And that means, for example, that China currently only makes up five per cent of its energy usage from natural gas, which is very low compared to most developed countries. They made it clear to me on that trip that they intend to increase that to 15 per cent natural gas in their energy system by 2020. So trebling the amount of natural gas usage. That means more purchasing and usage of natural gas and relatively less purchasing of coal. Gregg Borschmann: You’ve just spoken about China. Overnight American president Barack Obama is expected to toughen up the US regulatory response to climate change. Do you get a sense that the imperative for global action on climate change is once again on the rise? Colin Barnett: Oh yes. And I think that reflects the comments I just made about China. China has had a clear policy change. And what’s being speculated in America is the same. And I think it is wise of countries to increase their use of obviously natural gas but also renewables where that can fit in to their energy system. But if you look at the United States, the shale gas development there has meant that for the first time in perhaps nearly 100 years the USA faces the situation of being self-sufficient in energy. And I suspect what the Obama Administration is looking at is well now we are going to be not dependent on imported oil, we’ve got natural gas, we can use that more in our power system, and indeed we can produce liquid fuels from natural gas if we wish to, to use in our transport system. So you are seeing big shifts in policy in the United States, and probably an even bigger shift in China, where the target up until recently was double-digit growth. It’s now growth that’s maybe seven per cent thereabouts, and a shift—what the Chinese described to me as a rebalancing of their economy as they go for cleaner industry and closing down dirty plants, whether they’re power generation or manufacturing, and improving the air quality right across China. Big challenge, but they’re moving. Gregg Borschmann: And what’s the dividend for Australia? Colin Barnett: Oh well, I think for Australia there’s going to be very strong demand for natural gas, both from conventional reservoirs and also from shale or even coal seam gas—which is underway on the east coast. So we need to play it cleverly. We need to make sure we get a good return, and we also need to make sure that we actually keep some of our gas for Australia. And what I find extraordinary is that in Western Australia, since the 1970s and 80s, we’ve had a policy, a bipartisan policy of requiring some of the gas be kept for the domestic market that stands at 15 per cent. On the east coast there is no such requirement. I think that is a serious flaw in our energy policy. Any other country in the world, any other developed country in the world, will be ensuring that that clean, relatively clean energy, is preserved—or some part of it preserved—for the national economy. I think it’s just a gross oversight in energy policy in Australia. I think Australia should simply impose, similar to Western Australia, 15 per cent reservation for the domestic economy. I mean why should we have on the east coast now energy consumers in industry saying we’ve got a shortage of gas and the price is going to go through the roof, when we’re supplying vast amounts of gas into international markets? No other country in the world would do that. And as an example, there’s a lot of speculation that because of the USA’s big reserves of shale gas that they’ll become an exporter of that gas in the form of liquefied natural gas. They’ll do a little bit. In my view they won’t do much. The US will keep that gas for their own domestic economy. And Australia should be learning a lesson there. Gregg Borschmann: You’re proposing to create Wanjina, the largest national park in Australia, and this is very much your baby, isn’t it? Colin Barnett: Oh yes, the Kimberley is one of the world’s great wilderness areas. Wanjina takes in the newly created Prince Regent River national park which this government created. There are also corridors across the Kimberley. There are also private conservation stations as well, pastoral leases. So a very large area of the Kimberley is preserved. And I think most significantly this state government has created so far four massive marine parks in the Kimberley, and basically the whole coastal area of the Kimberley is protected—a unique and largely unknown area, and this great Kimberley Marine Park is second only to the Barrier Reef. So that is of world significance. Gregg Borschmann: Is it true that apart from four square kilometres, mining tenements for oil, gas, bauxite, even uranium, cover every nook and cranny of the Kimberley? This has to be one of the richest undeveloped mining provinces in the world. Colin Barnett: Oh, I don’t know it’s that. There are certainly minerals throughout the Kimberley. There are nickel mines and there’s been other discoveries. But mining is not a massive industry in the Kimberley. I think the area that will attract most attention is just to the south of the Kimberley, an area called the Canning Basin, where there is one of the world’s great shale gas resources. That’s probably five years away, but that will see development of massive onshore gas. Gregg Borschmann: The Canning Basin is bigger than Texas, with a potential mineral resource to match—liquid hydrocarbons, oil and shale gas. Is this the main game? Is this the truly big player over coming decades in the Kimberley—shale gas in the Canning? Colin Barnett: Well that’s the southern Kimberley. It’s not the rugged, open Kimberley that people identify in tourist brochures. This is basically desert area. But yes, it is a huge deposit. It is twice the amount of gas that has been identified in the offshore Carnarvon and Browse basins. But it’s probably five years away. Gregg Borschmann: Last week you announced that you would compulsorily acquire James Price Point, north of Broome. Without a proponent, a company to develop the site, why? Colin Barnett: Can I just make a correction there? We are acquiring an area of land at James Price Point with the consent of Aboriginal people. It’s not compulsory acquisition, it’s by mutual agreement. Now it’s a tiny area of land relative to the size of the Kimberley. The Woodside project in the Browse Basin is still looking at three sites, one of those being James Price Point. So we’ll see where that ends up because there are some issues with offshore floating production. Bear in mind this is a cyclone belt. Every year six cyclones will go through the area that is proposed to have a huge floating barge full of natural gas and oil. Gregg Borschmann: So in that sense you don’t think the deal is sealed at all? Colin Barnett: No. And indeed in my visit to China and Japan there were clear reservations about the issue of security of supply from a floating offshore LNG plant. Find out more at RN Breakfast.
Posted on: Wed, 26 Jun 2013 04:33:34 +0000
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