Transcript, Doorstop Interview, APPEA Conference 

Perth

QUESTION:  Minister, the LNG industry has indicated they believe they should be excluded from a carbon tax. Do you believe that it will limit LNG expansion, and should they be excluded?

FERGUSON:Firstly the Government is about a comprehensive approach to put in place a price on carbon. That means the LNG sector, just like other sections of the economy will be included.

But, just as in the lead up to the November 2009 package, which was related to the CPRS, we had proper and constructive negotiations with the LNG sector, we’ll have similar discussion on this occasion, in actual fact they are already underway.

Clearly in those discussions the LNG sector has raised a number of concerns, basically arguing that the nature of the industry has changed dramatically since November 2009, when in essence we had the North-West Shelf and Darwin.

We have a number of major other investments coming to fruition. They will produce gas in the foreseeable future and they want us to consider the impact on those developments.

QUESTION: Would you acknowledge the industry has changed since November 2009?

FERGUSON: The industry speaks for itself. I go back to November 2009, we had the North-West Shelf and Darwin. Very shortly we’ll have gas out of Pluto 1, we’ve got potential development by 2014/15 of coal-seam methane on the east coast, export opportunities. We’ve clearly got potentially INPEX final investment decision in Darwin, the issue of Wheatstone etc, so the industry has changed.

QUESTION: Yeah, okay, but what do you want [indistinct].

FERGUSON: It goes to a debate about the baseline.

QUESTION: Baseline, and do you acknowledge that their baseline has changed?

FERGUSON: They are the issues we will be considering and the companies have been asked to supply my Department, in association with the Department of Climate Change, appropriate material, going to them proving their case.

Let’s wait and see what the process delivers.

QUESTION: You spend a lot of time in China, Minister. Is it your view that more LNG in China can help cut global emissions?

FERGUSON: In terms of China, not only will more LNG to China, but more uranium to China will also assist in cutting emissions.

But you’ve also got to appreciate that whilst LNG and uranium for example in China reduce global emissions, they both also produce emissions in Australia in terms of our own international and domestic obligations with respect to how we come to terms with the price on carbon and seeking to reduce our CO₂ emissions.

QUESTION: Minister have you been directly informed of the takeover [inaudible] of BHP and Woodside [inaudible] …

FERGUSON: No.

QUESTION: What’s your response to Mr Barnett’s call this morning of hands off Woodside?

FERGUSON: I adopt this view - I don’t have the luxury of the Premier in going around and expressing views of potential takeover bids in Australia, in any sector.

Given the nature of my portfolio, as a Minister and in terms of my Department, I am consulted on these issues and it would be inappropriate to actually express a view as a Minister because it would effectively undermine my independence in providing an input into those processes.

I’ve got no intention of conducting a running commentary on any potential investment in Australia or change of ownership, and the last three years have proven how the Government approachs these matters. They’ll be considered on merit, if and when investment decisions or investment plays are put in place.

QUESTION: The Premier made a comment that it was inappropriate for him to be commenting on [inaudible] do you agree ?

FERGUSON: I’ll attend to my responsibilities, and in my three years as a Minister I’ve had to be involved in a number of complex investment decisions. And I haven’t and I will not publically comment on them. Those decisions are very important to Australia’s future, and we must not treat them as political footballs.

QUESTION: Do you agree with the Premier’s assessment of Woodside, in the unique position as being the Australian face of the LNG sector, it plays a critical dual-power role?

FERGUSON: I will make a comment on Woodside. Woodside, in my opinion, is a great Australian company. I’d also give credit to its leadership over a number of years.

In my opinion the LNG sector in Australia would not be where it is if people like Don Voelte and Woodside had not been prepared to lead and take risks. And Pluto 1, and hopefully 2 and 3, is a prime example of that, as is the potential Browse development.

So I’m talking about the quality and performance of that company. I’m not seeking to reflect on any potential bid in terms of the future ownership of that company. It is a good Australian company and it has done Australia proudly.

QUESTION: And as a general rule do you support the notion that the LNG industry should have vibrant competition?

FERGUSON: Competition is the key to our future and I refer to the acreage release today of 2011.

I hope that in terms of that acreage release we get a number of new players including overseas interests competing for that exploration opportunity, because I refer to the economic benefits it brings to Australia as a result of the work of Geoscience Australia

QUESTION: Minister, you know the Premier has said he’s had an informal mention about this from BHP at the end of last year. Where you ever informally informed, did BHP informally raise this kind of idea with you?

FERGUSON: I’m in regular discussion with a range of companies in the resource and energy sectors about a variety of matters. It has not been my practice in the past, nor will it be my practice in the future to detail the nature of those private discussions publically.

QUESTION: Minister, just back onto carbon tax, given that you have begun negotiated talks with the industry and you say that the industry has changed, is it fair to say there is room for change on the CPRS negotiations from 2009, and it is part of these real consultations every day?

FERGUSON: Well I will simply say they are real and genuine consultations. And at the Business Roundtable discussion before last, we indicated that in terms of energy intensive trade exposed sectors in Australia there were three particular areas that we had to have further detailed discussions on; steel, coal and LNG.

That clearly is a public recognition of our commitment to try and work these issues through with a very important sector of the Australian economy.

But I might also say that a number of key petroleum companies have also indicated that they very much support Australia fronting up to resolving this complex issue about putting a price on carbon.

QUESTION: What sort of process have those talks on LNG and coal - is it something that you meet with the industry and then go back to the Roundtable or is it subgroups of the Roundtable?

FERGUSON: They are subgroups of the Roundtable, particular industries who have argued that we should reassess, I suppose, the November 2009 package from the point of view of those industries.

They in the end will be the decisions of Government in terms of policy, not decisions of the Business Roundtable.

QUESTION: Indistinct] Browse project, how confident are you that your government will be able to [indistinct] regulatory [indistinct] by the middle of next year, which is your deadline for the project?

FERGUSON: Look, in terms of Browse we are making exceptionally good progress and the Premier, I suppose, spoke publically about that today in terms of nailing down, sooner than later, an Indigenous Land Use Agreement.

I’ve always said that I’m supportive of the project. I’m very pleased with the progress on the Indigenous front. But the project will stand or fall in terms of whether we meet the necessary environmental approval requirements.

That is the responsibility for the Minister for the Environment, Tony Burke, it’s not for me to be seeking to express a view or to put pressure on him with respect to timelines.

QUESTION: Minister is the WA Government too close to Woodside?

FERGUSON: I think the WA Government like the Commonwealth Government has a very good working relationship with Woodside, and all the other petroleum and resource companies that actually exist in Western Australia.

No I don’t perceive the WA Government being too close to Woodside. The Premier’s expressed a personal view, he’s entitled to it, but I’m of an entirely different situation given my Commonwealth responsibilities.

QUESTION: Minister, just going back to carbon and LNG given it comes under [indistinct] emissions, will LNG be treated differently to other [indistinct] or will they be treated the same?

FERGUSON: Let's just say we’ve clearly indicated that a staring point to these discussions has been where we ended up in November 2009 and we are working those issues through.

There were three difficult issues identified in those discussions. I’ve already referred to them; steel, LNG and coal. Meetings have taken place and they will continue. I’ve actually spoken to my Secretary this morning about trying to progress these issues soon than later.

One final question, yes please.

QUESTION: …. so why is it so important that Browse is built so quickly?

FERGUSON: The pressure in our economy is just not from the petroleum sector, it’s across the resource and energy sector generally. There’s about $142 billion committed in terms of capital investment in Australia. It will peak in 2014, as I said today.

Our job is to actually try and manage that peak demand for labour, which includes further investment in training and working with industry at a state and federal level, but also it involves the capacity we put in place for state migration agreements and enterprise migration agreements.

They’re the practical type of issues that we’ll be working with industry to make sure we can deliver as best we can on time and on budget.

It also requires a bit of give and take on all sides, I don’t accept that we can sustain the increases in wages that have occurred in the offshore petroleum sector, of over 30 per cent, and we’re going to have to try and work these issues through because the last thing we can cope with is those type of increases being extended to the mainland.

Over time that will make us less competitive and people have got to have regard for ensuring that they don’t kill the golden goose.

Thank you.