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Gas Industry Bill 2018 - Second Reading

21 November 2018
Rosalie Woodruff MP

Dr WOODRUFF (Franklin) - Mr Deputy Speaker, the Greens are pleased to support this bill.  We thank the staff who provided us with a very extensive and comprehensive briefing and answered all the questions we could think of.  Thank you very much.

The function of these three bills before us today is about more clearly delineating the departmental responsibilities and making for a more efficient enactment of each act, both from the point of view of the people responsible for administering it and presumably from a point of view of people who would be at the regulatory end of things.  We support those things.

There is very little to say about the detail of this bill.  I have some general comments in relation to gas prices, which in Tasmania, are high and I want to talk about the macro forces in play for Tasmania.

The gas prices in Tasmania are high because of price gouging by the industry at a national level.  This has been going on for well over a decade and has been discussed.  Pleas have been made by people in state and federal government over much more than a decade, probably two decades, for the federal government to intervene and to retain a proportion of our national gas resource for Australian use.

Instead, what we have seen is successive federal Labor and Liberal governments continue to put the interests of the international gas industry players first.  Their promises of jobs and growth for different gas-rich regions of Australia, particularly on the eastern seaboard have enabled and approved gas exports internationally, which means we are in a very difficult position in Australia.  We do not have a resource that has been nationalised for Australia to use.  We do not have a supply that has been set aside for Australia to buffer us from the fluctuations at the global level on the gas price.  What we see is that the manufacturing industry across New South Wales, Victoria and Queensland are in very difficult circumstances because the price of gas has soared.

The Labor Party is as culpable as the Liberal Party in this instance for refusing to put the foot on the pedal of the export gas market.  Now we have situation where our concreting and brick manufacturers, the sorts of manufacturing industries that require high levels of heat are having to pay increasingly unsustainably high prices for gas.

We are seeing the bite happening in places like Victoria and New South Wales with residential gas prices.  That is exactly why we are in a situation where there has been a false argument presented by the New South Wales and Queensland governments to go hard into fracking.

This is the push for fracking.  It is about breaking up the earth and draining the water basins in Queensland, New South Wales and Victoria in an attempt to extract coal seam gas.  That has established a cascade of problems for the agricultural sector and everybody who relies on clean water sources, as well as the chemical pollution that comes with fracking and the coal seam gas industry.

It seems like a long way away from where we are here today, but because of this progressive failure at the federal level to have a future plan on fossil fuels in Australia we have runaway gas prices and they are affecting us here in Tasmania.  The Oakley Greenwood Gas Price Trends Review 2017 did a review of residential price trends and they have found that the gas retail prices from 2006 to 2017 showed a steady increase in the delivered prices.  The average retail gas price in Tasmania increased by almost 1.5 cents a megajoule between 2011 and 2017, which was an increase of 60 per cent.  In 2017 the average gas price delivered to Tasmanian households was 3.91 cents a megajoule, of which 1.91 cents, or almost 50 per cent, was the distribution component, 12 per cent was the retailer component, 26 per cent was the wholesale gas component and 14 per cent was the transmission component. 

Note there was zero environmental policy component.  In other words, yet again we are seeing the fossil fuel industry getting away with not accounting for the environmental cost of their destructive energy-generating techniques.  We need to have a plan for phasing out fossil fuels, obviously; the planet has committed to that.  Whether we like or not we are now in a state of extreme climate change and we have been warned by the International Panel on Climate Change that we only have 12 years to act on this.  The gas price in Tasmania is a tiny part of the story of what we need to be planning for, but it is part of the story. 

A person who is much more expert in this matter than myself, Bruce Robertson from the Institute for Energy Economics and Financial Analysis, was reported in the Guardian in September 2017 as saying that the gas industry: 

… keep the price of gas high in Australia so they can make the real money out of the Aussie customer. 

Essentially Australians are subsidising loss-making exports.

There is no news there.  That is the case for all fossil fuel exports in Australia.  We are subsidising it on many levels for roads and infrastructure for those companies, but also because we do not cost the environmental damage that burning fossil fuels is doing to the climate system.

It is important in the context of these bills to ask the minister what is the plan for phasing out the use of gas in Tasmania?  What is the time frame for that, and how will the minister ensure that we look at the needs of residential customers very much in that plan?  How will we make sure that the poorest residential customers, particularly those who are hooked up to gas, are given the support and incentives needed to help them phase out the use of gas?  We also know that in terms of space heating, gas is far and away the most expensive form of energy we can use to heat our homes.  Gas costs 91.7 cents maximum per hour, compared to a heat pump which costs 33.6 cents, so approximately three times more.  People who are hooked up to gas as their form of space heating are paying through the nose. 

People on low incomes need to be supported, particularly people who are in rental properties.  I know a couple of people - I am sure we all do in this House - who have been doing the hard work of trying to get a rental property.  One of the issues is that rental properties that come with gas as a form of space heating have a very substantial hidden cost in the weekly rental because during winter the price of heating those houses is going to be so much higher than another form of heating.  Some carrot or stick for people who rent properties that have gas as a form of space heating really needs to be looked at, minister, because particularly in areas where rental properties are low and we know people on lower incomes will be living there.  That is a massive cost on people's annual incomes. 

The Liberal Government has apparently made it a priority to deliver the cheapest electricity prices in Tasmania, but what we know from the comments I have just made is that the gas industry is fleecing Tasmanians with the prices they are requiring residential customers to pay.  That is something that should be a matter of concern and attention for this Government, and we would expect that if they had residential customer's interests first and foremost, they need to be putting some pressure on those gas companies to make sure they are pushing back on those prices, but fundamentally looking at moving people out of that as a form of energy generation altogether. 

Mr Deputy Speaker, I thank the staff who provided the briefing, and we are happy to support this bill.