Darren Chester MP

                 
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APPROPRIATION BILL (NO. 1) 2012-2013 - CONSIDERATION IN DETAIL (RESOURCES, ENERGY AND TOURISM PORTFOLIO)

June 18, 2012


Mr CHESTER (Gippsland) (18:17):
I ask the minister if he would not mind switching hats for me—switching from his beach hat to his mining and resources hard hat. I have a great deal of sympathy for you, because you strike me as quite a practical man. I do not know how you manage to sit through some of your cabinet meetings listening to the bulldust about the carbon tax. I know that in your heart of hearts, Minister, you do not actually believe in what you are being forced to implement.

I want the minister to try to explain to me the seemingly contradictory position that he has. He has openly spoken about his support for efforts to clean up brown coal, possibly for export purposes. I think that it was the minister who coined the phrase, 'The Latrobe Valley could be the Pilbara of Victoria.' I believe that that position contradicts and is in stark contrast with your government's contract-for-closure policy, under which you are seeking to force the closure of 2,000 megawatts of brown coal power production and force the owners of those power stations out of business. Perhaps the minister can explain to me the miracle that occurs on the ships as they cross the seas in which this brown coal is somehow cleaned of its carbon content. Minister, I do not believe that you have any love for the contract-for-closure policy. Previously, you have left yourself a fair bit of wriggle room in your comments. You are saying that it is not contract for closure at any price. You are probably the only minister who has left himself a bit of wriggle room in that regard.

On the contract-for-closure policy, given that we are just days away from the 1 July deadline the government has set, will the minister deny that the government is going to announce an extension of time for this process? Isn't it a fact, Minister, that the whole process is completely off the rails and there is no prospect of an agreement within the next couple of weeks and that you need an extension of time to try and salvage something from this policy wreckage? Rather than announce an extension of time, Minister, why won't you do what you really want to do, which is abandon this dud of a policy, a policy that will cost jobs and do nothing to change the temperature of the planet? Minister, we both know that closing coal-fired power stations in the Latrobe Valley will not deliver a single direct environmental benefit anywhere in the world. We both know that contract for closure is a dud policy. Minister, will you deny that the government is going to announce an extension of time on its contract-for-closure policy?

The DEPUTY SPEAKER ( Mr Oakeshott ): The Minister for Resources, Energy and Tourism. But before I do call him, I would remind the member for Gippsland about parliamentary language. There was one particular word used in that speech with the blank look. I will remind him the word 'bulldust' is certainly in context. It is a word where better words can be found to describe the same concerns. The minister.

Mr MARTIN FERGUSON (Batman—Minister for Resources and Energy and Minister for Tourism) (18:19): Let us, firstly, deal with the nature of the Latrobe Valley. The Latrobe Valley is rich in brown coal reserves. Let us also be frank, historically it is not able to be exported because it of its high moisture content and its combustible nature. The government is therefore absolutely involved with the Victorian government in exploring potential technology opportunities. The opportunities are basically driven by the private sector to which both parties are prepared to make a financial contribution and to assess potential technology, which would reduce the moisture content, and hence make it exportable. Also from an export potential it would represent a further energy opportunity for countries not as rich in resources as Australia in reducing emissions. For example, one of the projects involves Australian proponents in association with a company out of India. The lignite in the Latrobe Valley is akin to the lignite in India—high in moisture content—and if we break through on the technology front we create a new export opportunity.

I am pleased to say that there are a whole variety of potential technology solutions in the Latrobe Valley including carbon caption storage which we also committed money to in trying to guarantee the future of the Latrobe Valley. In terms of the contract-for-closure process, obviously there are a range of issues of a commercial-in-confidence nature. I can also say that a number of the applicants—as has the government—have negotiated in good faith. They are interested in assessing whether or not it is possible within the envelope provided by government to enter into an agreement over time to reduce the emissions in the Latrobe Valley in terms of the high-emitting nature of the Latrobe Valley. No-one can deny that in relative terms the emissions out of a coal fired power station in Victoria are significantly higher than most other coal fired power stations in Australia.

Hence, we also have the approach to technology of how to reduce the moisture content and, in doing so, reduce the emissions. With respect to the contract-for-closure process, if we make the breakthrough in technology, who will know what we will get out of the contract-for-closure process? There is an envelope and I will not go beyond the envelope because our assessment of what is value for money in terms of those existing power stations. Should one power station, for example, close, a change on technology can guarantee the future life and even potentially extend the life of other coal fired power stations because of the potential capacity to reduce emissions.

These processes and negotiations are continuing, including with HRL and Energy Brix. I had further discussions today including, I might say, with the Victorian government to assess all available options. The real issue is: how do we assist the Latrobe Valley in creating a new future. I remind the honourable member that, under a direct action of his own coalition party room's policy at the last election, their intent to close power stations in the Latrobe Valley was absolutely reflected in direct action. I am reminding him of the policy at the last election—he was a candidate at the last election—

Mr Chester interjecting—

Mr MARTIN FERGUSON: It would be done by using consolidated revenue, which would close the Latrobe Valley because the coalition at the time also appreciated—

Mr Chester interjecting—

The DEPUTY SPEAKER: Order!

Mr MARTIN FERGUSON: If possible, we had to work on a technological front to reduce the emissions and to guarantee the Latrobe Valley a future. That is what I am consumed with and that is why I have a close working relationship with my Victorian counterpart, the minister for regional development, and with Mr Ryan the Deputy Premier of Victoria.

The DEPUTY SPEAKER: Have you concluded your answer, Minister?

Mr MARTIN FERGUSON: Yes. If he gets his time, he could ask another question.

The DEPUTY SPEAKER: Does the member for Gippsland seek to ask a question?

Mr Chester: Yes, if that is okay, Mr Deputy Speaker.

The DEPUTY SPEAKER: Minister, will you allow a question?

Mr MARTIN FERGUSON: Of course.

Mr CHESTER: Very briefly, Minister, in your comments you referred to the fact that Latrobe Valley coal could not be exported and perhaps used in China, India, Korea and Japan. If it is okay for the Latrobe Valley coal to be used in those contexts, why is it not okay for Latrobe Valley power station workers to keep their jobs?

Mr MARTIN FERGUSON (Batman—Minister for Resources and Energy and Minister for Tourism) (18:24): Consider my answer. I refer to the technology which reduces the moisture content therefore, potentially, makes it exportable because it is no longer combustible. It also means the end use has low emissions, be it in Australia or overseas. My answer also referred to the fact that, if you get the necessary break from technology for whatever power stations that may continue operation in the valley, it makes them lower emitting; therefore, more viable under a carbon tax regime.

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