Fracking Banned, But New Gas Exploration Essential

Much of the legislation we deal with in this place is relatively pedestrian. It is important in its way, but seldom does a bill have significant implications that go well beyond its anticipated life. This is such a bill. It is not just an important bill, it is perhaps a critical bill for the future of the state. It is a bill that builds on the work of the former coalition government and a bill that will ensure our reputation for clean, green, sustainable agriculture is not compromised in any way.

The bill is intended to achieve three major outcomes: a ban on the development of coal seam gas extracted by any means, a ban on the practice of hydraulic fracture to harvest gas, and an extension of the 2012 moratorium on the development of conventional onshore gas facilities, which was put in place by the former coalition government and an extension of which to 2020 was proposed by the coalition in opposition in September 2015.

But there is an elephant in the room, and apparently this elephant is invisible to the government because the debate today is being held against a background of rapidly escalating energy prices, both electricity and gas — an escalation that in the case of gas, it has to be said, is being driven largely by market forces and in the case of electricity is being driven largely by the actions of the Andrews government.

The government sought to make the bill, in the context of this debate, about hydraulic fracturing, and that is without a doubt a significant component, but we cannot simply ignore this apparently invisible elephant — the energy price — because if it is ignored, it will not only cause tremendous social dislocation; it will destroy what is left of Victoria’s manufacturing industries. We cannot just hope for the best. We cannot just hope that energy prices will somehow sort themselves out, because quite simply they will not.

The bill proposes amendments to the Mineral Resources (Sustainable Development) Act 1990, largely to deal with the issues surrounding coal seam or unconventional gas, and also amendments to the Petroleum Act 1998 to deal with the issues surrounding the extraction of onshore conventional gas.

Part 2 of the bill addresses the issues of coal seam gas. Definitions of ‗coal seam gas’ and ‗hydraulic fracturing’ are inserted into the principal act.

Coal seam gas is defined as natural gas when contained in oil shale or coal, while ‗hydraulic fracturing’ is defined as being the injection of a substance or substances into a bore under pressure for the purposes of stimulating a geological formation.

While relatively new in Australia, hydraulic fracturing has been employed in the United States to stimulate wells since the mid-1860s, and over time a variety of materials have been used. Originally it was largely explosive fluids — like nitro-glycerine — while later on, in the 1930s, acid was introduced. A variant of hydraulic fracturing, massive hydraulic fracturing, is currently used on shale formations in the United States, and of course the process itself has been used widely to develop the Queensland coal seam gas fields.

When it comes to coal seam gas and to hydraulic fracturing, the role of the Parliament — the role of the government — is very much about risk management. There is of course in the recovery of coal seam gas, particularly through hydraulic fracturing, a considerable risk, and that was recognised by the former coalition government. As a consequence the moratorium that is still in place was imposed in 2012. It was further expanded in 2013 to include tight and shale gas.

In this regard I contrast the attitudes of the Baillieu and Napthine governments with that of earlier Labor administrations, because not one permit for the exploration or recovery of unconventional gas has been issued under a coalition government.

Every single one of the 73 licences that have been issued for exploration for unconventional gas were issued under a Labor government. Every single one of the 23 fracking permits that have been approved in this state were approved under a Labor government, and there is simply, in all of those approvals, not one example of public consultation — not a single example.

Additionally, as the Auditor-General’s report confirmed, the relevant department did not brief a minister on unconventional gas development in Victoria from 2004 to 2011, so clearly Labor was asleep at the wheel. This new and potentially problematic industry was allowed to develop without proper risk management and without appropriate regulation.

Unlike Labor, upon coming to government the coalition very quickly realised the risk posed by hydraulic fracturing to our agricultural industries, and we took action.

Clause 4 of the bill proposes a total ban on both exploration for, and mining of, coal seam gas and imposes significant penalties. Any coal seam gas that may be incidentally discovered must be reported. Hydraulic fracturing is banned. The issuance of exploration or mining licences, or the retention of a licence issued for coal seam gas, is also prevented. The reporting of any coal seam gas discoveries to the minister is required. A limit is proposed to be imposed on the liability of the government with changes implemented by this bill, and the minister is authorised to undertake buybacks, although in a limited time frame.

Part 3 of the bill relates to the Petroleum Act and implements very similar arrangements. There are also consequential amendments to another act as a result of the banning of hydraulic fracturing and where provisions become redundant.

So that is the bill before the house. In many ways it is straightforward. Insofar as it relates to the prohibition of the exploration or recovery of unconventional gas, it is largely uncontroversial in this house. So too is the extension of the moratorium to 2020. Again the coalition have been leaders in this field. We announced our position on 28 September 2015, and our view remains unchanged. As the Leader of The Nationals noted at the time:

Extending the moratorium until 2020 will allow time for the regulatory work recommended by the Auditor-General to be carried out and for the findings of the parliamentary inquiry to be fully assessed.

Unfortunately there is little evidence to suggest the government is ensuring that the necessary work is undertaken or that the findings of the parliamentary committee have in fact been taken seriously. I suspect they do not actually intend to undertake any work at all to develop any safeguards and simply hope the problem will go away — but it will not.

Victoria is on the brink of an energy price crisis. The most recent report from the Australian Energy Market Commission released in December 2016 states clearly that in the three years from 2016 to 2019 electricity prices are set to skyrocket by 35 per cent. In the short term the impact is even worse, with prices set to rise by up to 40 per cent between 2016–17 and 2017–18 as a result of the closure of Hazelwood.

The National Australia Bank has forecast that Victorian households could be facing gas bill hikes of 50 per cent or more. Of course this hike comes on top of already significant increases. The bank’s 2017 ‗Gas and LNG Market Outlook’ indicates that prices in Victoria could rise to between $8 and $10 a gigajoule, up from $2 to $4 a gigajoule before the export plants were commissioned.

Earlier in this debate the Premier asked rhetorically if we were ―for‖ the Victorian economy.

The fact is that the energy price crisis that is set to engulf this state will not only make life exceptionally difficult for households,it will take the axe to Victoria’s manufacturing industry. Yet the government is doing absolutely nothing to deal with this crisis. It is doing absolutely nothing to ensure that the literally hundreds of thousands of jobs that depend on a reliable, reasonably priced energy source have a future beyond the next year or two. If the government continues to ignore the looming economic firestorm that a 35 per cent increase in electricity costs and a 50 per cent increase in gas costs will ignite, the very future of this state could be at risk.

So should we ban hydraulic fracturing? Absolutely. Should we continue the moratorium on onshore conventional gas until we get the regulatory framework right? Absolutely.

But the government must start that work now. We cannot wait another five years; we cannot wait another ten. The cost to the Victorian economy and the cost to Victorian families in lost jobs and a skyrocketing cost of living is simply not sustainable.

Inaugural Speech

“I feel greatly honoured to stand in this place today as the member for Mornington — honoured to be a member of this house, of course, but particularly so to be representing the seat of Mornington.”

Mr MORRIS (Mornington) — Speaker, may I take this opportunity to congratulate you on your election to your high office and to wish you well in discharging your duties over the next four years.

I feel greatly honoured to stand in this place today as the member for Mornington — honoured to be a member of this house, of course, but particularly so to be representing the seat of Mornington.

The electorate lies on the eastern shore of Port Phillip Bay and comprises three distinct townships, Mount Eliza, Mornington and Mount Martha. It also contains a good slice of the district and village of Moorooduc. Despite substantial population growth in recent years, owing to the foresight and planning of successive councils, the area retains its charm.

Unfortunately the Melbourne 2030 activity centre provisions now threaten. This is a critical time for the Mornington Peninsula. We are in serious danger of becoming simply a southern extension of metropolitan Melbourne, a scenario emphatically rejected by the peninsula community.

That is certainly a debate we must have, but perhaps it is more appropriate to leave it to another day. As I speak, much of the seat remains rural land, home to cool climate viticulture, extensive grazing, fine food and, of course, the racing industry. We are on the metropolitan fringe.The Mornington Peninsula Shire is an interface council, with all the challenges that go with that particular designation.

I have spent most of my adult life on the peninsula. From almost my first day I was aware of the fierce local pride that people who live on the Mornington Peninsula — and particularly those who have lived there for a while — have in the area. It is a pride which I quickly came to share and which has made me a passionate advocate for the community that I now have the pleasure of serving in this place.

The other constant in my adult life has been small business. It was small business that brought me to the Mornington Peninsula, and it is small business that to a large extent has guided the course of my life over the last 26 years.

As all good traders know — and I think as all good members of Parliament know — it is of vital importance to be involved in your local community. Early on in my time on the peninsula I joined a number of local groups, including the Mornington Chamber of Commerce.Not long after that the chamber developed a fairly strong difference of opinion with the then Mornington council as to what the future shape of the Mornington township should be. It was a difference that threatened to escalate and poison what had been previously a pretty good relationship between those two bodies over the years.

In a bid to understand the council’s view of things I started sitting in the gallery right through council meetings, and of course rather than simply taking note of what happened in terms of the planning issues, I started to get interested in all the other bits and pieces that were going on as well. Fortunately our differences were resolved pretty quickly, but not before I was well and truly bitten by the local government bug, and before long I had been elected to the Mornington council.

My local government service, which was in the pre amalgamation days, was certainly one of the high points of my public life to date. To serve as mayor, or shire president as it was in Mornington in those days, was a great privilege, as was the opportunity to serve on public bodies such as the Peninsula Regional Library Service and the Westernport Regional Planning Committee, to advise the Minister for the Arts on library funding or to be nominated by my peers to negotiate the merger of the Shire of Mornington with the shires of Hastings and Flinders.

But undoubtedly the most rewarding part of local government was the opportunity it gave me to engage directly with so many people who make our community great — the traders who give their time, and often their money, to make local festivals happen; the Rotary clubs and the Lions clubs, which contribute so much in so many ways; the volunteers who support the Meals on Wheels services — and without the volunteers they simply could not happen; and many, many more. Such people are an integral part of the active and vital community that is the Mornington electorate, as they are of so many other communities across Victoria.

In the past few days — and unfortunately now, weeks — there has been no better example of service to the community than the efforts of the Country Fire Authority volunteers, a number of them from the Mornington electorate, who have left their homes and their jobs to battle the menace of the fires which have laid waste to vast areas of our state. These brave men and women deserve our recognition and our thanks for their tremendous commitment to the public good. I am sure the thoughts of all of us are with them in their duties.

I come into this Parliament as a proud member of the Liberal Party, a party I joined in November 1975 at the age of 19. Over the years I have been an active member and have had the opportunity to contribute in many ways. I am a Liberal because I believe in individual freedom, in individual responsibility and in a society committed to freedom of thought and freedom of speech, freedom of worship, freedom of association and free enterprise. I believe in a community that values initiative, enterprise and individual achievement over compulsion and conformity — a place where people are able to buy a home, raise and educate their children in the way they choose, and create the life to which they aspire.

I would not have the privilege of standing in this place this evening had I not had tremendous support from many people. I firstly want to recognise the support I have received from the former member for Mornington, the Honourable Robin Cooper. Robin has been a friend for almost 20 years, a great mentor and a great supporter. I also particularly want to thank Diana and Erich Goetz, Terry Leech, Alan Underwood, Frank and Trish Winter, Arthur Ranken and David Chapman. Their efforts have been way beyond the call of duty, as have those of Darren Disney, Julian Sheezel and all in their team. I would also be remiss if I did not mention another good mate — the Honourable Bruce Billson, Minister for Veterans Affairs and the member for Dunkley in the commonwealth Parliament. Bruce and I have shared many political adventures since we first crossed swords on a regional library committee in 1987.

I am also particularly fortunate to have enjoyed great support from my family for my political endeavours over what is now an extended period. That support has come from my parents, Bob and Dorothy Morris, from my sister, Robyn Tredinnick, and her husband, David, and lately their children, Caitlin and Andrew, and from my newer family, Simon, Tim and Carolyn Wilson, but most of all from my wife, Linda, who worked at full stretch for every day of what was a 22 month campaign. I simply would not be here without her love and support.

I thank the house for the courtesy with which I have been heard this evening, and I look forward with great enthusiasm to the years ahead.

Legislative Assembly 20 December 2006