State row over WA's natural gas reserves


A row has erupted between Canberra and Perth over Western Australia's natural gas reserves. The Premier, Alan Carpenter, has declared that he wants to keep up to 20 per cent of his state's gas in WA to provide the state with cheap fuel.
TranscriptTONY JONES: A row has erupted between Canberra and Perth over Western Australia's natural gas reserves. The Premier, Alan Carpenter, has declared that he wants to keep up to 20 per cent of his state's gas in WA to provide the state with cheap fuel. But the Federal Government is accusing the Premier of economic sabotage, and today the argument was aired in front of an international audience. Tom Iggulden reports. TOM IGGULDEN: Against a background of rising energy prices Premier Alan Carpenter wants to siphon off up to a fifth of WA's gas production to provide cheap energy for the exclusive use of Western Australians. Today, he was taken to task by Federal Resources Minister Ian Macfarlane who said such talk had already scared off two unnamed major gas investors. IAN MACFARLANE, FEDERAL RESOURCES MINISTER: It is a policy which will damage our international credibility and is ringing alarm bells around the world. TOM IGGULDEN: In reply, the Premier abandoned his prepared speech and went on the attack. ALAN CARPENTER, PREMIER: Don't be misled. There is no change of policy. There is no sovereign risk. This is the best place in the world to invest. TOM IGGULDEN: The blow-up happened in front of a powerful international audience: APEC's long-awaited meeting of senior gas industry officials and senior executives. One of them, a Texas-based economist widely respected amongst producers, was less than impressed with the Premier. MICHAEL CONOMIDES, ECONOMIST: Generally, countries and local governments that try to legislate a fraction of the profits or fraction of the production, generally they shoot themselves in the foot because they stifle competition. TOM IGGULDEN: Mr Carpenter tried to undo the damage. ALAN CARPENTER: Do you honestly think the West Australian people want to damage this industry? TOM IGGULDEN: As the politicians squabbled about who was going to get their hands on their hands on Australia's dwindling energy reserves, at this suburban Town Hall just up the road from the Prime Minister's electorate, the locals crammed in to hear about what's going to happen when it's all gone. TOM IGGULDEN: Richard Heinberg is the latest visiting expert to warn that world oil production is about to peak - a proposition that's beginning to take root in the suburbs. MAN: It indicates a lot of people are concerned about it. They're seeing the price at the petrol pumps and that's the first indicator that it's coming. I think the majority of people weren't aware it was coming towards them prior to that. TOM IGGULDEN: And, Mr Heinberg says, the market can't be trusted to deal with the declining resource peacefully. RICHARD HEINBERG, POST CARBON INSTITUTE: To think the best thing we can do with these things is burn them as fast as we possibly can, I think, is insanity. We should preserving some of this wealth for future generations. TOM IGGULDEN: He's urging politicians to sign onto a global fossil fuel trade credit system to slowly reduce consumption. RICHARD HEINBERG: If we have domestic tradable quotas of fossil fuels then that means the people who don't use as much will have quotas left over at the end of the year they can sell and benefit financially and those who insist on using lots more petrol, let's say, or natural gas, will have to buy more quotas and so that will be using the market mechanism to help enforce behaviour that will be in everyone's interest. TOM IGGULDEN: About 250 people turned out to hear him speak tonight. Tom Iggulden, Lateline.