Federal government intervention in major energy projects is perplexing to say the least.
THE latest splurge of files unleashed by self-appointed global watchdog Wikileaks has much intriguing detail for observers of the Western Australian business scene.
For those who weren’t paying attention last week, the release by Wikileaks of US embassy cables has quite a bit of material relating to WA’s major projects, such as the James Price Point LNG hub near Broome.
One cable in particular, entitled ‘Australia ups pressure on big LNG project partners’, is most illuminating about how the US government officials reported on the Browse gas field, and how the federal government allegedly helped push the reluctant partners into the Woodside Petroleum-led hub development.
Of course, the cable is merely the local US representative’s views and is, in many ways, simply a summary of what was already largely known. It is the sort of thing that newspapers do all the time.
What is different about this is that the sources are often named and their views either paraphrased or even quoted. This provides a level of insight to the reader because the identity of the source is revealed.
Take this passage: “(Minister for Resources and Energy Martin) Ferguson’s energy adviser, Tracy Winters, said December 9 that the government would not allow companies to build portfolio investments by sitting on Australian resources over a long term,” the cable stated.
“Winters suggested it would be a good thing if some of the most reluctant partners pulled out of contentious and slow-developing deals, as ‘there are plenty of investors ready to fill in their places’.
“More decisions like this are coming, Winters said, including a review of Chevron’s large Wheatstone project retention leases.
“According to Winters, timelines and conditions like those in the Browse decision would be a model for future decisions.
“A formal policy statement was being drafted, but was delayed within the Department of Resources, Energy and Tourism.”
The insight provided by this is the way the government was operating at the time and, I suspect, still does. The federal government had, rightly or wrongly, completely overturned a long-running benign attitude to retention leases, adopting the so-called use it or lose it policy that many domestic users of gas have called for.
But, as Ms Winters reportedly indicates, this was not a clear-cut reversal of policy. It was a one-off application that happened to favour the views of one company, Woodside, against the interests of several major stakeholders in the sector, which were not given much time to develop alternatives for the Kimberley hub.
That such an intervention seemingly took place while the real policy was being formulated is extraordinary.
It is scary to believe that Canberra can be run this way.
THERE’S a saying that if you lie down with dogs you get fleas.
I’ve been watching the recent alliance between farmers on the east coast and the green movement to oppose coal-seam-gas developments.
The rural sector ought to be wary of cosying up a political cause closely aligned with the animal protection movement that has nearly destroyed cattle production in the country’s north.
Funnily enough, out of the Wikileaks cables I see a mirror image of this example of strange bedfellows – an odd alignment between protestors in the Kimberley and big oil.
The environmentalists, including the Greens, trying to stop the James Price Point development have been quick to jump on the cables as evidence that the whole process was flawed. But most of the argument against James Price Point appears to be from the big end of the resources sector claiming that government has interfered in the natural order of things.
While the conservationists’ short-term hope is to cast doubt on the advantages of the Kimberley hub, they must be surprised to find themselves in agreement with a whole bunch of multinational oil companies, including Chevron.
May I remind readers of the title of the cable, ‘Australia ups pressure on big LNG project partners’; isn’t that what the environmentalists want, for the Australian government to make decisions about our resources, rather than some Houston-based oil executives?
I guess that’s just an inconvenient truth when you have economic development to stop.
I AM, of course, troubled by the whole concept of Wikileaks. As a journalist I’ve been the grateful recipient of quite a few whistleblower leaks, so I have no problem with concerned citizens seeking to stop governments or any other organisation from doing wrong.
Wikileaks is not quite that discerning. It is dumping torrents of stolen documents in the public arena without really considering anything but the potential damage and havoc they might create.
They are known to be stolen by reportedly embittered members of the US armed services, though I am not clear about the motives of the thief or how exactly they link to most of the documents exposed.
News Corp is castigated for allowing tabloid journalists to actively tap into people’s voicemails but anyone who publishes Wikileaks cables, including me, must ask ourselves how different we are. Is being one step removed from theft much different than doing the thieving? The law treats the fence and the robber with equal contempt.
Arguably it is the perceived public interest in the material that makes one digestible and the other not.
Most of the Wikileaks material I have viewed is simply commercial or political voyeurism rather than evidence of any dark empire engaged in anything beyond the normal work of diplomats.
Nevertheless, the leaks are a reality and what was the world’s biggest and most sophisticated diplomatic service and its content management service will have to change.
As Australia is an ally of the US, this could mean that their ability to act in a way that best suits our interests is compromised.
AS concerned as I am about the issue, I couldn’t help reading with interest comments reported in the cables about the federal government’s climate adviser Ross Garnaut in the lead-up to the failed Emissions Trading Scheme.
According to the cable report, under Chatham House rules (ie not to be reported), Mr Garnaut was concerned that Australia’s scheme was unilateral and would need some way of penalising imports that were manufactured tax-free.
He was also worried that countries with emissions reduction schemes would use this as a new form of trade protection.
Ultimately he wanted some mechanism agreed through the World Trade Organisation.
None of that has changed under a carbon tax yet we plan only to tax ourselves – even sectors such as magnetite iron ore and LNG processing, which may actually reduce global emissions if the whole production cycle both inside and outside of Australia is taken into consideration.
And getting WTO agreement? Dream on, it would take years. It is just another example of why we ought not be acting alone on this one.