BRUMBY NOLAN AND FERGUSON DISCUSS GAS AND OIL PROJECT

Friday, 25 July 2008
Summary: Victorian Premier John Brumby, ExxonMobil’s Mark Nolan and Federal  Resources and Energy Minister Martin Ferguson discuss a new gas and oil project in Bass Strait, and emissions trading.  The Premier also responds to questions about seatbelts on buses, allegations of corruption in Port Phillip Council, gas prices, a dead newborn baby found abandoned in Shepparton, and the removal of signs from the front of the City Museum.
JOHN BRUMBY:    Perhaps if I can start just to reiterate--

[Interruption]

BRUMBY:    --and it is great to be here today with Mark Nolan, with Martin Ferguson, with Peter Batchelor.  This is an incredibly exciting and positive project for the state; ditto for Australia as a whole.  This is about cleaner fuel, lower emissions, and it’s also about energy security for Victoria and Australia. 

We welcome the investment that’s been made by ExxonMobil and BHP Billiton joint venture.  We’ve worked very closely with the company.  I want to thank, obviously, the Federal Government, State Minister Peter Batchelor for the work they’ve done with the company.  This is another announcement of one of a number of significant investments in new energy capacity in our state.  And, as I’ve said before, all of the new energy capacity which is coming online, it’s cleaner, it’s low emissions, it meets our energy needs for the future, but it does it in a way which is much, much better for the environment. 

And we’re very appreciative of the size of this investment: it’ll generate a hundred new construction jobs, about a thousand ongoing jobs across Australia; it is very, very significant indeed. 

And, Mark, do you want to perhaps…

MARK NOLAN:    Sure.  Bass Strait has a great past and a very exciting future, and today we’re very pleased to announce the investment in the $1.4 billion Turrum project in Bass Strait.  It will add significantly to the security of supply, to the energy in the whole eastern coast of Australia, and the Turrum project, combined with the Kipper project announced just about six months ago, represents an investment of over $3 billion on behalf of BHP Billiton and ExxonMobil.  So we’re very pleased with these projects, and very proud to move them forward.

REPORTER:    Mr Nolan, there have been some fairly dir predictions about where the price of petrol is heading.  What’s your company’s view?  I mean…  It was suggested $8 a litre at one stage.  Do you think, I mean, do you think…are they in the ballpark those sort of figures?

NOLAN:    The prices of petrol are very difficult to predict: they are set by regional markets, markets beyond Australia, markets that reach out into south-east Asia, so the prices of petrol and, indeed, crude oil, which is the feedstock, are just very difficult to predict.

REPORTER:    Premier, there’s concerns raised today that some power stations may be forced to close – this is for you as well, Martin – under an ETS.  What guarantees can you give that…that impact won’t occur?

BRUMBY:    Well, perhaps…I can start, and I think the report to which you refer was actually undertaken prior to the release of the Green Paper, so some of the fundamentals have changed: the Green Paper makes it very clear that there will be some direct support and some direct assistance to existing generators.

But I just want to make the point today: we are, certainly in this state, not in the doom and gloom business; in fact, on the opposite.  It’s always been our view that out of an emissions trading system, a carbon reduction scheme, properly structured, properly supported, that we’ll actually see more investment in energy, not less, and you’ll see more investment producing lower emissions and, to date, that has been absolutely true for our state. 

So whether you’re talking about the HRL and Harbin investment, which is a big investment in coal – 30 per cent fewer emissions than existing coal generation, 70 per cent less water – whether you’re talking about the gas announcement today, whether you’re talking about Origin at Mortlake, whether you’re talking about solar, or whether you’re talking about wind, we are seeing more investment, not less, more jobs, not less, and all of this investment is producing fewer greenhouse emissions than would otherwise be the case.

So it’s always been our view that if we get this structure right – and we are working closely with the Federal Government to make sure that they get it right – if we get it right, you will see better economic outcomes and better environmental outcomes.  And one classic example of that is the HRL-Harbin joint venture.  That’s important to Victoria, but it’s important to China.  China is building a new coal-fired plant every week, one big enough to power a city the size of Adelaide.  If carbon capture storage and clean coal technology works effectively there, that technology can be applied around the world, and will have a huge impact on reducing emissions around the world.

So I think we’re heading in the right direction; we are not in the doom and gloom business.  That is not to say that there aren’t major challenges and difficulties in the implementation of emissions trading – there will be – but with a good dialogue with business and with the Federal Government, I’m sure that the Federal Government will get the policy settings right.

MARTIN FERGUSON:    A carbon pollution reduction scheme is premised on energy security.  In no way are we…going to endanger energy security; that’s…about making sure that Australia can go forward economically and grow and create even better job opportunities.  And there are a whole range of issues for further consideration and debate, including implementation of our renewable energy target of 20 per cent by 2020. 

In terms of gas, I expect the supply of gas as a source of energy to actually grow dramatically. 

With respect to the issue of the coal-fired power stations, we have already put in place a proposal for an adjustment scheme.  We are working on carbon capture and storage, offshore legislation, which is important potentially to the Latrobe Valley, and also understand that the Australian Government has got a low emissions technology fund in place of $500 million to actually assist the coal industry, and I will very shortly be announcing further commitments, in terms of a low emissions national council, including a taskforce to further work on these issues, which will include the Victorian Government. 

We are absolutely committed, through consultation around the Green Paper, of going forward on the basis that Victoria can rest easy in the context of energy security.

REPORTER:    Premier, after yesterday’s bus crash, do we need seatbelts on all buses?

BRUMBY:    Well, when you look at the…  Well, firstly, let me say it was a shocking accident, and I am getting a full report on that.  I spoke this morning to the Roads Minister, Tim Pallas.  There’ll be a full report from the transport safety investigator.

What I can say is when you look at the statistics on buses, most accidents and fatalities occur actually when people get on and off buses; it’s not from injuries while buses have collisions.  And, in fact, bus transport is the safest form of transport of all.  And, so, we’re not looking at changing existing policies in relation to seatbelts.  If bus operators want to fit seatbelts, they can do that, but that’s a decision for them. 

The biggest issue of all is getting on and off buses; you see that particularly, and then people cross the road, and you see that with schoolchildren.  We’ve put $18.5 million into improving bus safety, particularly in relation to bus stops, crossings and other things in terms of people getting on and getting off buses.  So this is where you can make most difference to saving lives, much better value in terms of the outcomes, saving lives, than you would with seatbelts.  So this is where our direction will continue to head.

REPORTER:    Those stats, though, are of little comfort to the people in hospital today, still recovering, and fighting for their lives in some cases.

BRUMBY:    Well, I can only repeat to you all of the evidence, and the evidence is overwhelming that the most important thing for governments to do is to make the arrangements safe in terms of getting on and getting off buses.  That’s where most injury occurs. 

This is a…it’s a shocking accident; obviously I’ve seen all of the details of it.  Obviously the Government extends to families our concerns for their speedy recovery.  There will be a full report, which will come to me, on that and, as I’ve said, it’s being investigated by the transport safety investigator.

REPORTER:    Premier, allegations of corruption in Port Phillip Council: what’s the most appropriate body to look into those sort of allegations?

BRUMBY:    Well, the most appropriate body to look into it is the…Victorian Ombudsman, who has extensive powers under the Act, and I’m pleased to advise that the Ombudsman is already examining this matter. 

So, earlier this week the Ombudsman determined to investigate procurement practices at Port Phillip Council.  As you know, the Ombudsman has extensive powers, including calling witnesses and taking information under oath.  He made that decision to undertake that inquiry; he’s advised the Government.  I’ve been informed of that, and in light of that I wouldn’t intend to comment further on any of the specific allegations that are made in relation to Port Phillip.

REPORTER:    We have seen a number of incidences of problems at councils with ethics or the way their business operations are going on, and the Ombudsman himself has reported into this before.  Do we need stricter guidelines or stricter rules, or how do you stop this from happening? 

BRUMBY:    Well, it’s correct that the Ombudsman has reported on these issues previously, and I think I’m correct in saying that, in every case, each of the Ombudsman’s recommendations into local government has been implemented or is being implemented by the Government.  So, we’re doing everything that we should be to make sure that we get the best local government anywhere in Australia. 

You will always find allegations, from time to time, about improper practice – that’s…nothing new about that, nothing new in Victoria, nothing new across Australia.  The relevant point is that we have the best agencies in place to deal with the matter, and the best agency is the Ombudsman, and the Ombudsmen has a long history of investigating these matters; he has extensive powers and he determined earlier this week, on the basis of a range of information, to initiate his own inquiry.  And I welcome that and, again, I think it shows that whenever these matters are raised, the bodies, the institutions that we’ve got in place in Victoria are fit for purpose, they are properly equipped to do the job, and that is exactly what the Ombudsman is doing.  

REPORTER:    So no need for a corruption commission? 

BRUMBY:    No, none at all. 

REPORTER:    Mark, could you talk a bit about east coast domestic gas prices, where you see them going, and what, if any, impact all this LNG talk up in Gladstone is going to have? 

NOLAN:    The effect of the eastern gas prices or the future of the eastern gas prices is, once again, very difficult to predict.  It’s a measure of the supply and demand; it’ll be dependent on what happens with some of the coal seam methane reserves, to what extent some of that develops into LNG.  It’ll also depend on the effect of the ETS scheme.  So, I think the bottom line is that we see there may well be an opportunity for increased gas sales as a result of the emissions trading scheme. 

REPORTER:    Prices going up? 

NOLAN:    It’s very difficult to see what will happen to the price; that will be dependent on the overall balance of supply and demand. 

REPORTER:    Why we can’t we use that gas in our cars? 

NOLAN:    The fuel source of petrol and diesel is a very efficient fuel source.  It is possible to use gas in cars, but of course the infrastructure is such that diesel and petroleum is currently much more efficient in source of transport fuel. 

REPORTER:    Premier, the case of the baby dumped in Shepparton and other similar cases has prompted some psychiatrists to call on Victoria to follow overseas examples where they set up designated spots where mothers in trouble can leave babies in that situation.  Do you think that’s something that Victoria should look at? 

BRUMBY:    Look, I’d have an open mind on that issue.  It’s not a view that’s been…that I’m aware of, that’s been put to Government or put to me, but…it’s a tragic case, and obviously at the moment everybody is focused on finding the mother.  These cases are always tragic you know, they’re always very sad circumstances, and we hope, firstly, that we can find the mother, and I would say we’ve got an open mind on whatever steps or processes might be in place in the future to minimise or eliminate the number of occasions these circumstances occur. 

REPORTER:    Have you received any apology from the Plug the Pipe group for the distress they caused you and your family on Wednesday? 

BRUMBY:    I haven’t, no, but I was pleased that they took the right decision.  And, as I’ve always said, it’s one thing to have vibrant political debate – and that’s what we’ve got in Victoria; we’ve had a long history of that – it’s another to have mobs of people going over the fence and invading people’s private property. 

REPORTER:    You mentioned that there were some people on your property the night before the invasion was threatened.  Is there any action being taken against them? 

BRUMBY:    There’s no action; I hope the matter now rests. 

REPORTER:    And, can I ask, Premier, did Tim Holding make a mistake by ordering the removal of signs from outside the City Museum – you know, the red signs, outside the old Treasury Building – without the proper heritage permit that’s needed to have them removed? 

BRUMBY:    Well, I don’t know about that.  I think the signs have been there for a while.  They’ve…I think people have a different view of the signs: obviously some people think the signs are appropriate, but others would say that they’re completely out of place with what is a magnificent gold rush era building, and I doubt that signs of that type were around during the 1850s and 1860s. 

So, I think Tim’s interest has been purely to make sure that the sign fits the character of the building.  I don’t know if every step was properly followed, but I’ll get advice on that and I’m sure that the Minister is keen to ensure that all of the processes are properly followed.

REPORTER:    Do you want to see the signs stay or go? 

BRUMBY:    Well, to be honest, it’s the first time I was aware of it, and…I know about most things that go on in government, but I wasn’t aware of this one.  And I think probably a more discreet sign is appropriate for that building.  And, you know, they are large, they are prominent, some people think they’re a bit garish, and it is a beautiful old gold rush era building, so I think something a bit more subdued would be appropriate.