**CHECK AGAINST DELIVERY**
First let me thank the Global Foundation for hosting this dialogue this evening.
We are living in an historic era of global economic expansion, particularly on our doorstep in the Asia-Pacific – home of the world’s four largest economies – the United States, China, Japan and India.
China and India are also the world’s fastest growing economies.
By 2015, it is quite likely that China will have surpassed the United States as the biggest economy in the world and India will be the third biggest.
This rapid expansion of economic activity is accompanied by an insatiable demand for energy.
Coupled with increasing concern about climate change, the thirst for energy means that energy security is one of the big issues confronting Australia and the world today.
For whoever controls access to energy resources controls economic growth.
That is a potential cause of tension between nations in the future as it has been in the past.
In the current international environment, China, India, Japan, the United States, Europe and South American countries are all looking to their national interest when it comes to energy security.
Because energy security is the key to their economic future.
It’s a legitimate debate for Australia to have and it’s about time we had it.
I was reminded recently that on the eve of World War I, Winston Churchill, then First Lord of the Admiralty, decided to convert the British navy’s fleet from coal to oil, generating great consternation about energy security.
No longer would the navy be able to rely on home-grown coal from Wales, but it would have to rely on oil supplies from what was then Persia, of course, now Iran.
At the time, Churchill said:
“Safety and certainty in oil lie in variety and variety alone.”
The recollection is a timely reminder for policy makers about just how much the world has changed and yet it remains the same.
Fears about energy security today are fuelled by instability in exporting nations, the threat of terrorism, a nationalist backlash, unprecedented global growth and a scramble for resources, a tight oil market, record high oil prices and the fundamental desire of nations to protect their own economic future.
On top of that, there is the fear of climate change.
That is why one of the first tasks of my Department is to prepare a National Energy Security Assessment looking at Australia’s energy outlook for the next 5, 10 and 15 years.
But Australia has to not only look to its own future when it comes to energy security and cleaner energy technologies, it has to be part of the solution to the environmental impact of economic growth in our region.
We cannot protect our own economic future otherwise.
Let’s not forget that almost 20% of Australia’s total exports come from energy resources – and that is growing.
We account for 30% of world coal trade – and we are a clean supplier, with Australian coal generally at the higher end of the quality spectrum.
Around three quarters of our coal exports go to countries in the Asia-Pacific.
We supply 8% of the world’s liquefied natural gas (LNG), currently around 14 million tonnes, and this is expected to grow to more than 24 million tonnes by the end of the decade.
According to the International Energy Agency, Australia could be the world’s third largest exporter of LNG by 2020.
Again, our key markets for LNG are in the Asia-Pacific.
We supply almost one quarter of the world’s mined uranium.
Clearly Australia cannot afford to sit on the sidelines when it comes to the energy security and climate change debate.
Above all, we have to clean up coal.
To put it in context, Australia has hundreds of years worth of coal resources, over 100 years of natural gas, about a century of uranium and one to two decades of known oil and condensate resources.
Coal is going to be important to Australia for a long time – for electricity generation, ultra clean transport fuels, chemicals, and hydrogen – but the technology challenges ahead are enormous if we are not to leave these resources stranded.
That is why I am focussed on the introduction of carbon capture and storage legislation this year to establish a framework for the future storage of carbon dioxide from power generation and industrial sources.
It is also why the Australian Government has established a $500 million National Clean Coal Fund and why we will continue to collaborate on international projects such as the demonstration of post combustion capture at the Gaobeidan power station near Beijing.
This is one of more than 60 clean development projects that Australia has so far committed more than $94 million to through the Asia-Pacific Partnership.
Seventy percent of China’s energy needs come from brown coal.
As a result, China has nine out of the ten most polluted cities in the world and faces enormous challenges in improving urban air quality and urban health.
At this point, let me say therefore that it is very hard to begrudge China a peaceful nuclear power industry.
Windfarms, solar energy, and renewables alone can not solve China’s problems.
We must also clean up coal and the Chinese must have the ability to use other cleaner energy sources as part of their energy mix, including LNG and uranium, subject to strict nonproliferation safeguards.
Governments cannot solve this problem alone.
The active involvement of the private sector is absolutely vital along with the work of organisations like the Global Foundation.
Together, Governments and the private sector must secure Australia’s economic growth and at the same time be part of the solution to the environmental consequences of what is happening in our region – one of the most rapid expansions of economic activity in world history.
We are going to have to rethink traditional views about intellectual property when it comes to clean energy technology and create new mechanisms for technology sharing and technology deployment and uptake.
We are also going to have to work hard to establish, maintain and promote open and transparent markets in energy resources when the temptation is great to retreat to national self-interest.
Nothing is more important than strong institutional frameworks based on the free market.
More oil-producing countries are nationalising their oil industries, sending away vital foreign investment and industry capability.
China and India, the emerging powerhouses of the world, are sending their national companies out into the world to secure access to energy resources.
Asia’s oil consumption has overtaken North America’s.
So the United States is also reacting to fears about where its oil will come from.
In recent years, European countries have been forced to confront the implications of their reliance on imported gas from Russia and Ukraine with temporarily supply cuts creating fear and uncertainty about the future.
And the United States is becoming more reliant on imported LNG.
Nowhere is the race for resources more evident than in north Africa where China and India are snapping up resources like the Greater Nile Oil Project in the Sudan.
Almost 30 per cent of Chinese oil imports are already supplied by Angola, Congo-Brazzaville, Sudan and other Sub-Saharan African producers.
Just as northern and eastern Africa was the battlefield of the cold war thirty years ago with the pouring in of arms to prop up or tear down Marxist regimes, will the next battle be about access to energy resources?
The truth is we cannot afford for that to happen.
It is important that energy and resources security is squarely on the agenda of the major global economies and that Australia has a seat at the table.
Foreign investment in our energy and resources sector is very welcome, but it must be accompanied by strong governance and regulatory frameworks that are applied internationally.
The Australian Government recently released foreign investment principles as a general aid to improving transparency in foreign investment in our country.
The changing face of the global energy scene – brought about not only by the emergence of China and India, but by the market power of the major global energy corporations – is why we must have a debate about our own national interest and our own national energy security, and about how we engage with the rest of the world on these issues.
Investors need that for certainty just as Australians deserve it for their long term national energy security and to ensure they get a fair shake for the exploitation of their resources.
We have to take the xenophobia, uncertainty and risk out of what is currently an imprecise, opaque process.
And we have to do what’s right for Australia.
I’m a great supporter of energy exports from this country.
But not in isolation of a national domestic energy policy and that must form part of the transparent investment environment in Australia.
In closing, let me say a few things about uranium.
When it comes to uranium, the links between energy security and national and international security are nowhere more clear.
Australia has no greater international obligations and no greater international opportunities than those granted by our position as a uranium supplier.
A number of players have sought to test the limits of the existing non-proliferation regime and we must do everything within our power to strengthen international safeguards.
Australia is used to punching above its weight – in the sporting arena, in the arts, in international business and in international politics.
In 1988 it was Australia, under the Hawke Labor government, that led the way to a global agreement preserving the Antarctic forever from human exploitation of its minerals.
And in 1989, it was Australia, again led by Hawke, which established APEC (Asia-Pacific Economic Cooperation) in Canberra.
Today, APEC is the primary organization promoting open trade and economic cooperation in the Asia-Pacific region.
As a major nuclear supplier, we have an opportunity to take a lead on nuclear non proliferation too.
And I hope that we can also use our position as one of the most important energy exporters in the world to take the lead on energy security.
The insecurity reverberating around the globe is translating to a retreat from the very institutions and frameworks we need in place to promote civilised societies and free and open trade, particularly in energy and resources.
These are the things that will link countries together in an unprecedented way in the future.
These are the opportunities, as well as the threats, presented to Australia as a strategic supplier of energy resources to the world – of uranium, of natural gas, of the best quality thermal and coking coal in the world.
They are once in a lifetime opportunities for Australia to play above its weight in international affairs, to make a real difference in climate change policy, in multilateral trade negotiations, in nuclear nonproliferation policy and in recreating the institutional frameworks for open and transparent global energy markets.
These are opportunities not to be squandered.
And just as it was in Churchill’s day, the key to energy security now is still variety – or diversity.
The economic growth we are facing in this century means that we will need all the energy sources and technologies we can find.
That is why the debate about renewables vs fossil fuels or nuclear – in the global context – has passed its use by date.
There is room for everything in an energy hungry world which has to find the balance between economic growth and environmental sustainability.
Thank you.