LETTER TO THE PRIME MINISTER

3/10/2017

Dear Prime Minister

The Australian Government continues to permit our treasure of offshore gas to be taken by foreign-owned multinational companies. This small clutch of petroleum companies neither pays for our gas, nor pays income tax on the profits made on the export of our gas, nor provides gas to Australia.

It is open to you today to announce a ‘use it or lose it’ policy on all retention leases granted and to impose conditions on the production licenses including: an Australian Gas Reserve Policy and a royalty regime of 10%. These conditions would not represent a sovereign risk to companies because the conditions would be known before the final investment decision related to the production license.

Failure to announce such a policy now simply continues the weak and failed policies of the past and condemns Australians to lower living standard and high levels of unemployment. It would mean our natural advantage in abundant natural gas will continue to be given to other countries. Effectively you will be giving away jobs.

The endless talk by Government about meeting international agreements on carbon emissions is of no interest to me or the 18% of Queenslanders who support One Nation. We want market intervention to address the failed gas market, but we believe the Government has made a mistake to introduce what it calls the Australian Domestic Gas Security Mechanism (ADGSM).

Let me say that calling your policy the ADGSM in no way changes the fact that export control is a form of Domestic Gas Reservation along with Domestic Production Obligation (used in WA) or Acreage Retention. The fact is that both the Coalition and Labor have Gas Reservation Policies (as does One Nation).

The Government intervention announced to date involves:

· Export control (ADGSM) and

· Increased onshore coal seam gas production or other unconventional gas production (by penalizing the States with bans on this activity etc.).

These strategies are short term and simply allow the likes of the Queensland cartel of LNG producers to offset their export losses by gouging the East Coast consumers.

We both know that Victoria is a net exporter of conventional gas to other States. Just look at the gas bulletin board on the AEMO site www.gasbb.com.au to see Victoria exports gas and does not need to pursue unconventional gas. In any event the Sole project off the coast will deliver 25 Peta Joules from 2019.

The real gas problem is in Queensland and NSW where Australians pay two to three times the ACCC recommended price of $5.87 per/gigajoule. If you persist in doing nothing about Commonwealth owned gas in retention licenses, some as old as 30 years, then you will lose Government and we will see Bill Shorten Prime Minister. I do not understand how you can persist with the present approach of suggesting it’s a State problem when the Commonwealth owns abundant proven and probable gas in old retention licenses. We have already been approached by more than one company who would start immediately to go into production if the Government announced a ‘use it or lose it ‘policy.

The majority of the retention licenses are in the hands of a small cartel but it is the Commonwealth through its senior role with Joint Authorities which calls the tune on a ‘use it or lose it’ policy on old retention leases. Further, the government could pay for a feasibility study for a second re-gassing station on the East Coast. AGL has shown with its decision to re-gas at Cribb Point in Western Port Bay in Victoria that re-gassing LNG is cheaper than unconventional gas even after chilling and transport.

As you know I briefed you on this issue not so long ago and while you listened without interruption and said it was interesting you have done nothing at all and in the meantime thousands of homes have been cut off for failure to pay world high prices and business are about to shut and thousands will be looking for jobs you sent offshore.

Yours sincerely

Senator Pauline Hanson