House of Assembly Fifty-First Parliament, Third Session (51-3) 51 3 Parliament of South Australia House of Assembly published Bills National Gas (South Australia) (Short Term Trading Market) Amendment Bill NATIONAL GAS (SOUTH AUSTRALIA) (SHORT TERM TRADING MARKET) AMENDMENT BILL Second Reading Second Reading Adjourned debate on second reading. (Continued from 9 September 2009. Page 3767.) Mr WILLIAMS House of Assembly MacKillop Mr WILLIAMS (MacKillop) (11:52): I intimated in my discussion of the previous matter that the circumstances of this bill are different and, again, I will make a comment about the government's actions in bringing matters to the house. Notwithstanding that the minister pointed out that my office was offered a briefing on 11 September, that is not exactly weeks ago: it is about a week and a half ago. My office contacted the minister's office last week to find out whether any of these bills, which had been tabled on the Thursday of the previous sitting week, would be debated this week. My office was informed that the government wanted to bring on the bill that we just debated, and I arranged to have a briefing yesterday on that and took the opportunity to get an understanding of the bill even before that briefing and prepare a paper that I could take to my party room and discuss with my colleagues to come to a position. My office was informed at the time that this bill would not be discussed this week. The Hon. P.F. Conlon House of Assembly The Hon. P.F. Conlon: Now, let's be very careful. Mr WILLIAMS House of Assembly Mr WILLIAMS: I will be very exact on this. My office rang the minister's office last week and was informed that this matter would not be on the Notice Paper this week. As a consequence, because I happen to be a busy man, I took the opportunity to do other things in my electorate. As I said earlier, sometimes I even talk to my constituents; sometimes I answer correspondence; I make inquiries on their behalf. I do a lot of that sort of work. I also have some other portfolios for which I am responsible, and I do some homework on other matters as well. For the minister to suggest that I am bone-idle I think is not only offensive but also totally erroneous. I know the way this minister operates. I know his bullyboy tactics, so I am not going to get too frightened by them, but I just take the opportunity to point out to the house that, again, it is my belief that the house does not give the attention that it should. My office informs me that we actually have an email to the effect of what I have just said, that this matter would not be debated this week. So, if the minister wants to dispute it then I am quite happy to debate that with him. The minister might think that it is not necessary for the parliament to thoroughly scrutinise these matters; that is obviously the attitude that he brings to this place, but the reality— The Hon. P.F. CONLON House of Assembly The Hon. P.F. CONLON: I rise on a point of order. Can the opposition spokesperson return to somewhere in the general neighbourhood of the bill and not what he believes my attitude might be to things? The Speaker House of Assembly The SPEAKER: The member for MacKillop must speak to the bill. Mr WILLIAMS House of Assembly Mr WILLIAMS: Indeed, Mr Speaker. The point that I have made is that I would like the house to spend an even greater time scrutinising this legislation. The opposition will be supporting the short term trading market amendment bill to the National Gas (South Australia) Act, notwithstanding that I do not believe that we have given it the scrutiny that we potentially could have with a little more time. The briefing I received yesterday from the minister's agency filled in the gaps in my mind on this and gave me a little bit of background information as to where it is coming from. As I pointed out earlier, and unlike the minister's comments on the previous matter, this is certainly a child of the Ministerial Council on Energy. This is a matter that has been brought to the house at the behest of an agreement made at that ministerial council. I do not necessarily have a problem with that, if the house scrutinises it thoroughly and has an opportunity to have its say. I pointed out earlier that I would make some comments about the similarities between the electricity national market and the gas national market, but, of course, because of the intrinsic nature of the two forms of energy, there are some differences. Electricity, by and large, is consumed as it is produced: there is a generator turning one end of the wire, producing electrons and feeding into the wire, and the consumer takes it out at the other end. There is no real storage-type capacity within the wire. Gas, somewhat differently, is produced at one end of the pipe, pumped into the pipe and then taken out at the other end of the pipe by the consumer, but there is considerable flexibility in that pipe. In the case of South Australia, the pipe, historically, has come from Moomba, which is a long way away. I am informed that there is something like two or three days of our consumption in that pipe at any one time, just as a matter of course. If the producers at the other end of that pipe stopped putting gas in we could continue to draw gas without any deleterious effects for, probably, a couple of days. So, it builds in considerable flexibility. I understand that the Victorian gas market, because of the proximity of the production wells to the main load or main consumers, does not enjoy that flexibility, and that it has had a short term trading market, or something akin to that, operating for some time, which sends more immediate market signals between the demand side and the supply side. That is what it is about. In South Australia and, I understand, also in New South Wales and potentially in Queensland, the trading between the gas producers (the suppliers) and the gas retailers is done by long-term contract, and that works for the majority of the time. I do not think we have had any problems in South Australia. I understand that in New South Wales, at some point in time, there was a problem there in that the system failed—without any actual breakdowns the gas supply failed. It is believed that is the nature of a long-term contract, that is, not sending the immediate market signals between the demand side and the supply-side. It is believed that by establishing a short-term trading market those more immediate signals would come into play, and that in itself would not only make the supply of gas into the network more robust but also provide flexibility to consumers. It is my understanding that a not dissimilar system has operated in Victoria. So, I do not know whether we are flying completely blind in establishing a short-term market; there is experience to guide us. It is my understanding that a trading hub will be established here in Adelaide and in Sydney and, possibly in the not too distant future, in Queensland. I also understand that in some markets and, probably in the Sydney market, there will be potential to establish more than one short-term trading hub. I do not think that that necessarily will come to pass in Adelaide in the immediate future. As I have said, the opposition supports this bill. It will increase the flexibility into the gas market, and it will underpin gas security throughout the national pipe network, and that augurs well for particularly business but also household consumers. If the gas supply fails, it impacts on every consumer, whether they be a large and significant consumer—such as, for instance, the Torrens Island power station—or a household on a cold winter's night: they all lose out. This is designed, I think, wisely. It was highlighted when we established the Australian Energy Market Operator (the national regulator) earlier in the year that we were looking forward to receiving this legislation. It is my understanding that more legislation will be tabled as we move forward and as the national energy market matures in the future. Mr RAU House of Assembly Enfield Mr RAU (Enfield) (12:03): I just want to say that I am rejoicing in the glow of this ecumenical moment. I congratulate the minister on the bill, and I congratulate the opposition on agreeing with the minister. I cannot wait for us to move further with this business. It is exciting. This is what parliament is all about. This is why we are all here, and I for one am glad I am here today. The Hon. P.F. CONLON House of Assembly Elder Minister for Transport Minister for Infrastructure Minister for Energy The Hon. P.F. CONLON (Elder—Minister for Transport, Minister for Infrastructure, Minister for Energy) (12:04): I can hardly not speak; I am now inspired by the member for Enfield. That speech will go down with the Gettysburg address, I think, as one of the great moments in political oratory. This is a national reform, and a very useful national reform. The parliament has understood that this is about making gas trading more efficient, and therefore assisting users at times when matters get tight in terms of security and liquidity. I point out that it is sensible to have a national approach to these matters. If you consider South Australia, with the SEA Gas pipeline, the Moomba to Adelaide pipeline, and the Ballera extension that now runs from Ballera (in Queensland) to Moomba, there are obviously a number of states and jurisdictions involved in the supply of gas. Of course, those large-scale arrangements are more a matter of long-term contracting. While there is sometimes criticism of national reform—and I do not think all national reform is good—I think that, plainly, on its merits this is a positive step. Whilst my friend says it involves more scrutiny—and he is entitled to that view—I would point out that this is something not only which is enabling but also which enables us to adopt the work being done by the Gas Market Leaders Group—work which has been heavily and publicly consulted on. The rules will, of course, be designed around that very technical understanding that the operators themselves have in the marketplace. However, while some reforms could be criticised, this is undoubtedly a positive step in the management of the buying and selling of gas in Australia. I thank the chamber for its support. I particularly thank the member for Enfield for his most heartfelt and impassioned support for this necessary— Ms Chapman House of Assembly Ms Chapman: He didn't reflect very well on the parliament. The Hon. P.F. CONLON House of Assembly The Hon. P.F. CONLON: I thought he reflected very well on the parliament, saying nice things about us. Being the sort of person I am, I am prepared to take him at face value. I thank the parliament for its support. Bill read a second time and taken through its remaining stages. The Hon. P.F. CONLON House of Assembly The Hon. P.F. CONLON: Mr Speaker, I draw your attention to the state of the house. A quorum having been formed: