Natural Resources Committee: Unconventional Gas (Fracking) Interim Report

The Hon. S.W. KEY (Ashford) (11:43): I move:

That the 106^th report of the committee, entitled Unconventional Gas (Fracking) Interim Report, be noted.

The Natural Resources Committee inquiry into unconventional gas (fracking) was referred by the Legislative Council to the committee on 19 November 2014 pursuant to section 16(1)(a) of the Parliamentary Committees Act 1991. The terms of reference for the inquiry include:

…inquiring into potential risks and impacts in the use of hydraulic fracture stimulation (Fracking) to produce gas in the South-East of South Australia and in particular:

1. The risks of groundwater contamination;

2. The impacts upon landscape;

3. The effectiveness of existing legislation and regulation; and

4. The potential net economic outcomes to the region and the rest of the state.

Since the inquiry was advertised in November 2014, more than 175 separate submissions have been received and evidence has been taken from 48 witnesses at 14 public hearings held both in Adelaide and the South-East of South Australia. Much of the evidence received was of a very high quality and has been important to the committee in both drafting this interim report and commencing developing recommendations to be included in the final report, which is anticipated to be tabled in 2016.

In February 2015, the committee made a fact-finding visit to Millicent in the South-East of South Australia to take evidence from local communities and to visit sites relevant to the inquiry. A further fact-finding visit was made to the Darling Downs region of Queensland to meet with community representatives who had experienced the rapid development of a gas industry build phase in their region and to view and discuss the many associated impacts. The Queensland visit was particularly useful in providing members with an insight into what unconventional gas development looks like in an established aquaculture and residential region, albeit one larger than South Australia's South-East.

While it has been emphasised repeatedly during the inquiry that fracking has been occurring in South Australia's Cooper Basin for several decades, it was obvious to the committee that there are a number of significant differences between existing gas development in Cooper Basin's sparsely populated arid zone and potential gas developments in the more densely populated and much wetter South-East region. One sentiment expressed by a number of people whom we met in Queensland was that they were impressed that the Parliament of South Australia was conducting an inquiry into unconventional gas development before any production had occurred, suggesting that this would have been beneficial in Queensland, rather than waiting until mid and post development to try to understand and mitigate the impacts.

The committee returned to the South-East in September 2015 for well attended hearings at the Robe council chambers—I must say they were very well attended with lots of banners and people making it very clear what their view was about the inquiry—and also to view the site of the Jolly-1 exploration well, which has been the point of some contention in the region.

The committee appreciates the strong public interest in this inquiry and the considerable efforts made by witnesses to attend hearings and present evidence. Some of our witnesses have come to every hearing we have had on fracking in Parliament House, and it is no small feat for them to make that effort, sometimes for an hour or an hour and a half's worth of evidence. We really do appreciate the fact that they have taken such a strong interest.

We understand that there remains some knowledge gaps in the information we have received thus far and the committee will be seeking the relevant expertise to address these gaps. Members look forward to continuing their work on the unconventional gas inquiry into the new year and to delivering the final report in 2016. I would like to thank all of those who have given their time to assist with the inquiry thus far.

I commend the members of the committee: the member for Napier, the member for Kaurna, the member for Flinders, the Hon. Robert Brokenshire MLC, the Hon. John Dawkins MLC and the Hon. Gerry Kandelaars MLC, for their contributions to this report. As is the way on the Natural Resources Committee, all members have worked cooperatively and, I think, well together. I would also like to extend thanks to the member for Mount Gambier, the member for Hammond, the member for MacKillop, the Hon. John Darley MLC and the Hon. Mark Parnell MLC for their assistance and interest in this inquiry. They have also spent a lot of time with us listening to evidence and moving around South Australia to do that.

Finally, I would like to thank the committee staff for their assistance and I make special note of Barbara Coddington, who has (in a first report for our committee) excelled. I hope she will stay with us for the next report, because it has been a big job for her. At this stage, we have not made a decision to employ any other staff to help us with such a big and sensitive inquiry. I commend the report to the house.

Mr PENGILLY (Finniss) (11:49): I listened with great interest to what the member for Ashford had to say. I have taken somewhat of a peripheral interest in this whole fracking debate. I believe, indeed, that it is difficult but not impossible to take the emotion out of all of this and look at it from a common-sense perspective. The reality is that in the 1970s we had the oil crisis. We were running out of oil. We have had peak oil, we have had this, we have had that and we have had everything else.

At the moment we have got vast amounts of gas and oil in the system. In fact, the United States is in a position to export oil rather than import it if needs to through its shale oil and its fracking. I know that the member for Hammond went to the United States to look at the fracking. I am not sure who else went. I like to keep a balanced approach on these matters, and I will listen with interest when the final report comes back into the house.

Just to also add to the discussion this morning, yesterday BP had its application in the Bight rejected, and I say 'at this stage' because the extreme environmentalists will run around now and say that they have had a mighty victory and that there will be no oil drilling in the Great Australian Bight. Well, there will be drilling in the Great Australian Bight—if it is next year or 20 years or 30 years because they will have to, quite frankly. They will be looking for oil, they will be looking for gas, and eventually it will happen.

I have no great problem with the fact that it would appear that the environmental argument submitted by BP in that particular case does not appear to have been strong enough at this stage, and it has to go back and revisit that, and I know that the member for Flinders may want to comment on it. The mayor of Ceduna, I thought, was very good this morning. He had a balanced approach, which is what we need in all these things. His view was that we need these products to continue our way of life and to continue to boost the economy, and they will be looking for them for a long time.

I have no doubt that one day, well after I am gone, they will be drilling for oil and gas in Antarctica. I think it is a monty they will do that. So, it is an interesting debate to watch and to listen to, and I think it is good that the parliamentary committee is looking at it and taking the time to investigate and spend some time working as parliamentarians investigating that. So, well done and I look forward to the next edition.

Mr PICTON (Kaurna) (11:52): I will make some brief comments because I know that the member for Flinders would like to make some comments as well. Essentially, this is an interim report we wanted to make because of the huge expanse of this inquiry, and we did not want the parliament and the community to be left hanging before we had a final report. We thought that we would give this interim report to provide an update on the submissions that we have had, the hearings that we have had, the visits, both to the South-East and to Queensland (which I thought were very instructive) and also some of the baseline information that we are looking at.

However, it is not an opportunity to make recommendations or to provide findings. I think it is worth stressing as well that it is not an opportunity to reopen all of the submissions or to reopen all of the evidence. We have had a significant amount of evidence brought to the committee—over 170-odd submissions—and I do not think that we are asking for any more.

There might be particular areas where we do seek something, but that will be the committee's judgement to make where there is a particular area where we might be lacking. I think that it is also worth noting that, since this project from the committee started a long time ago, there has been significant change in the global oil market as well.

We have seen the oil price drop to, really, a small fraction of where it was when we started the inquiry process, and I think that ultimately leads to less chance and likelihood that such developments will be happening in the South-East in the near future, in my humble opinion; but, we persist with the inquiry because I think there is obviously some interesting policy issues to deal with in any case.

The other thing I would just like to quickly note is that there has been a long history of gas in the South-East, of gas wells across the Penola region. We have visited some of them, and we have been to the old plant which is in the area and which is run by Beach Energy, and to say that there has never been such developments in the South-East is wrong. That gas has supported a wide range of industry in the South-East which is very important.

I would like to make a brief note that I think there are some limitations to a parliamentary inquiry in this matter and I think the expectations of some people of what a parliamentary committee might be able to do in terms of analysis of scientific evidence might be unrealistic. Essentially we can look at the evidence, we can look at reports, we can look at what people have brought to us, but we do not have a bank of scientific knowledge as a committee. I think the expectations that people will have as to what the final report may come up with needs to be borne in mind.

The other point I would like to make is that the Natural Resources Committee has a wide range of other work that we need to continue to do. Natural resources, particularly management issues and levies, are subjects a lot of people in this house like to discuss, and I think that this committee would like to spend more time looking at those issues. Hence, I am optimistic that we will finish this report by the middle of next year so that we can provide parliament with some recommendations but then also go on to the other issues that the Natural Resources Committee has in its terms of reference which I think are very important for us to look at. I am confident that with Barbara, who is our research officer—and she has done tremendous work and I commend her—we will provide for this parliament by the middle of next year some very interesting findings and recommendations in the area of fracking in the South-East.

Mr TRELOAR (Flinders) (11:56): I rise today in the short time remaining to provide a commentary on the 106^th report of the Natural Resources Committee. As has been highlighted, this report relates particularly to an inquiry that our committee is undertaking into unconventional gas, otherwise known as fracking, in the South-East of South Australia. The terms of reference were quite broad but they included the risks of groundwater contamination, the impacts upon the landscape, the effectiveness of existing legislation and regulation, and the potential economic outcomes to the region and the rest of the state.

The reference was made and the first call of submissions was put out in November last year, so in fact we are 12 months on and it is a very timely interim report. It is just that, an interim report; we have some way to go on this. As the member for Kaurna alluded to, we are expecting that by the middle of next year we will be able to put out a final report with a complete summary of findings and recommendations, but we are not at that point yet. We have taken a significant number of submissions, 175 in fact, from a total of 48 witnesses at 14 public hearings held both here in Adelaide at Parliament House and also in the South-East of South Australia.

We have also had a trip to south central Queensland where coal seam gas has been quite topical. They are at a point now where the expansion phase has concluded and they are delivering gas to the coast for export. It was a very interesting, timely and instructive trip for us. Some of the committee on Monday next week are taking a trip to Moomba in the north-east of South Australia where we will be able to see first-hand, and some of us for the first time, the fracking operation as it occurs.

No doubt the global dynamics have changed, the global influences have changed since this inquiry began. The member for Kaurna mentioned the significant reduction in the price of both oil and gas on a global scale. That will impact no doubt on proposed developments. I guess underlying this inquiry is a bigger issue and I will allude to it and give it more time at a later date. It is really about how we manage as a parliament, a society and a community competing land uses. I do not think we have necessarily the right answer to that question yet. I hope this inquiry will go some way towards solving that. I seek leave to continue my remarks.

Leave granted; debate adjourned.