Mr PEDERICK (Hammond) (11:59): I rise to speak to the National Gas (South Australia) (Market Transparency) Amendment Bill. We note that this bill, as has been stated by our lead spokesman, the shadow minister, will improve transparency in the eastern and northern Australian gas markets. This bill was previously introduced by the former Minister for Energy and Mining on 9 September 2021 but, as parliament prorogued, it could not be voted on.
The current bill was introduced by the current minister on 1 June this year. In July 2021, energy ministers unanimously agreed to a legislative package aimed at improving transparency in Australian gas markets and hence this transparency bill addresses information gaps that relate to gas and infrastructure prices, supply and availability of gas, gas demand and infrastructure used to supply gas to end markets.
The key features of this transparency bill include expansion of the scope of the Gas Bulletin Board. This will allow for new information to be collected in areas such as gas reserves and resources, liquefied natural gas processing facilities and LNG exports and imports. There is also a feature requiring the Australian Energy Market Operator (AEMO) to make Gas Statement of Opportunities procedures.
This will require relevant market participants, such as producers and facility operators, to give information to AEMO for use in preparing that statement. It also confers a new function on the Australian Energy Regulator to publish gas price information and the necessary powers to obtain this information from relevant market participants. It also allows the Australian Energy Market Commission to make transparency-related National Gas Rules.
It is expected that more efficient planning and investment in the domestic gas markets will result from these reforms in addition to providing more accurate signals about how well the market is functioning. Improving the transparency of the eastern and south-eastern gas markets will also bring Australia more in line with commensurate transparency requirements observed in overseas gas markets, including our close neighbour New Zealand. We are the lead legislator in regard to this transparency legislation and as such we will be the first state to introduce and pass this legislation.
As the shadow minister indicated, we are in agreeance with this legislation, but we are at a bit of a crossroads again with energy in this state and this nation. As has been indicated, the terrible war in Ukraine, where gas supplies are impacting Russia and Ukraine, is having a worldwide effect. It just goes to show how important gas is to everyone in the world, particularly as a transition fuel moving on into the future as we slowly move away from coal and into the clean energy future, as we are.
South Australia is the lead jurisdiction with the amount of wind generation and solar generation we have in this state. That is part of the reason why we are building the interconnector through to New South Wales—so that we can not only assist in that national energy market but also send renewable energy through to New South Wales when we need to and import energy back when we need to.
It is interesting, and there is a lot of debate in the current climate around gas. Obviously, a huge amount of gas is exported as LNG from around the country, whether it is from Western Australia, off Darwin or off Queensland. I watched a program the other day about opening up the Scarborough field off Western Australia. It is a field 400 kilometres offshore and there is debate about whether or not it should go ahead. We have just seen in a very short space of time what happens with disruption overseas, and we will have gas as a transition fuel for many, many years to come.
We have certainly seen issues with base load where, if you shut it down too quickly, as happened here in September 2016, you have a total state blackout. There are now issues because we have had coal-fired power stations close down, some are down for scheduled maintenance and some are down for emergency maintenance. I heard some dialogue the other day about the Loy Yang A generator near Traralgon in Victoria having difficulty getting spare parts, and they will not turn up until September. If anyone has been down there to have a look at how things operate, it is pretty spectacular, with open-cut mining of coal for that energy.
Part of the issue is around some of the issues that companies have to deal with in obtaining gas. I have said here multiple times that it is now 40 years since I worked in the Cooper Basin. I know the member for Chaffey worked there at a similar time. A friend of mine still works in the gas industry 40 years down the track. He has been there long enough to dictate when he goes now, and he has worked offshore pretty well all around Australia, whether in Bass Strait, off the Western Australian coast or New Guinea, so he has a wealth of experience.
Recently, my friend David assisted in a job at Karratha, working with INPEX on an offshore well. The operators need to be able to access the gas. I certainly worked in a field where we were able to exploit more opportunity working with Santos, Delhi Petroleum and others, because we do see how vital a resource it is, not just locally but around the world. When we come through this period of cold snaps, especially in the Eastern States, I note that the Cooper Basin has a direct feed into Sydney, for instance, but there are some gas fields in New South Wales that have not been opened up.
The Hon. A. Koutsantonis: Some in the Otway too.
Mr PEDERICK: Yes, some in the Otway.
The DEPUTY SPEAKER: The minister is being disorderly because he is not in his chair.
Mr PEDERICK: Chuck him out! It has all come to where we now have a crunch. It is interesting that in the debate around energy some are saying, 'Hang on, have we let coal go away too quickly?' because they are talking to operators like the ones who operate the plant down in Victoria: 'How quickly can you get it online?' Certainly in the gas industry, gas generators can fire up extremely quickly and they are often used in reserve, especially in South Australia, if there is not enough solar and wind.
The issue we have at the moment is that, because there is such a high demand on energy, the gas generators generally would have a huge amount of gas over a period of time contracted so they can use it for generation. However, if they are asked to turn on more turbines than perhaps expected early on in forming those contracts, they have to buy gas at the spot price, and that is where the issue comes in. That also depends on whether the gas is available, noting the export demand and the upgraded domestic demand we have at the moment.
It is a real issue, noting, though, that if the gas can be supplied and the generators are prepared to pay the spot price they can generate that gas, but they will probably generate at a loss. There is a sequence in the marketing regulation set up where they can get some relief for paying above the board if they are required by the regulator to generate more power for the state and, essentially, the country.
It is an interesting time in generation. I know that this is expanding on it a bit, but gas is not dissimilar to hydro generation, and Snowy Hydro 2.0 is on the go. With respect to Snowy Hydro, those turbines can be started within 90 seconds. As long as the water is there to spill, you can get that generation going. Whether it is hydropower or gas generation, they can work alongside the wealth of renewables we have in this state to provide our much-needed energy. As I said, we are starting to get found out a little now with the cold snap, whether it is for heating or just for running everything we need—running lights or energy for running factories—it is a vital resource. We rely on it for virtually everything we do during the day.
This bill will look at more transparency in the market, and we need to make sure that our providers of gas have as much opportunity as possible. While I am talking about that, I want to congratulate Kevin Gallagher and Santos on the hundreds and millions of dollars they are investing in carbon capture and storage in the Cooper Basin, utilising some of those wells that have been fully exploited to put carbon back underground. I congratulate their forethought in doing that.
It is a major commodity that we need to make sure we can access for all time. For domestic use, we use electricity all the time, and gas is that transition fuel that will be going on into the future, noting that if we did not have it industry costs would blow out because industry is the biggest user of gas. What happens with all of this—with the price of gas going through the roof—is that the cost of living goes up for everyone, which is a real danger not only to South Australians but to Australians, and you see it reverberate around the world.
We are supporting this bill in regard to market transparency of a national gas market. We are the lead legislator in the country. Hopefully, when this legislation passes, it will assist in making sure that everyone, whether it is regulators, suppliers or people in the distribution market, can work more efficiently for the betterment of South Australia and Australia.