29/06/2004 - 22:00

Election anyone?

29/06/2004 - 22:00


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Anyone noticed the sudden burst of major resource news at State level?

Election anyone?

Election anyone?

Anyone noticed the sudden burst of major resource news at State level?

Suddenly there’s a $10 billion resources master plan, encompassing a whole bunch of already announced projects plus a couple of blue sky efforts like an aluminium smelter.

Do I sniff an election in the air?

While I’d love to see a smelter, I won’t be holding my breath as I think of all the i’s that need dotting and t’s crossing by various bureaucracies amid the likely community protest against anything that vaguely resembles economic development in the South West.

And while we’ve seen Gorgon get the nod and Alcoa’s expansion of Wagerup effectively given the green light, the WA Government’s record on the Burrup is not all that noteworthy.

Two years ago we reported on $6 billion in investment projects earmarked for the area.

Very little has come off since then, with Burrup Fertilisers being a very notable exception, as well as the possibility of an additional train for the North West Shelf.

In the meantime, we have seen the failure of Epic Energy which has resulted in the Dampier to Bunbury Natural Gas Pipeline falling into the hands of the banks.

This is a big problem that could play an enormous part in ensuring that further development of the State’s South West is badly hampered  – most notably plans for an aluminium smelter.

With this in mind I’ve taken note of sudden talk of a second pipeline to provide some competition for the current one.

The Government, of course, is worried that the banks might just sit on the pipeline – enjoying the rents.

For a local example, look at BankWest which has quietly allowed the receivers to manage the Rottnest pub for years.

Of course leaving the pipeline unexpanded without any incentive for the ‘owners’ to invest would hold WA’s industry to ransom.

So the State has issued a veiled threat (a second pipeline proposal) along with a hugely buoyant outlook on the economy ($10 billion reasons to invest here).

It’s the stick and the carrot, I suppose.

It’s all about trying to get the pipeline sale process up and running in time to meet the demand in 18 months or so when supplies are expected to become critical.

Short of borrowing an LNG tanker from the Koreans and shipping a summer’s worth of gas down to Cockburn, there are few major things that can be done to alleviate the pressure in such a time.

In the meantime, no doubt, we’ll see the return of oil-burning capacity at Kwinana, better emergency arrangements with big users such as Wesfarmers and imported short-term turbines.

Some of these things should have been arranged years ago and you have to wonder who has been in charge of planning for our future energy needs.


One thing this (new) power debacle has proved, is that centralised control of energy planning and infrastructure investment belongs in some sort of museum – along with a bunch of other things that failed in the Eastern Bloc 20 years ago.

The result of this is we are left with few feasible short-term alternatives.

One answer lies in expanding the pipeline – presumably under new owners though not necessarily.

Whatever the case, without enacting some sort of damaging emergency controls, the State Government is relying on the goodwill of a number of banks that it has been odds with for months, if not years, as relations dropped to icy lows as Epic struggled to stay afloat.

It’s a bind that no manner of good news and economic masterplans will remove.


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