NATIONAL GAS (SOUTH AUSTRALIA) (SHORT TERM TRADING MARKET) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 22 September 2009. Page 3257.)

The Hon. D.W. RIDGWAY (Leader of the Opposition) (16:53): I rise on behalf of the opposition to speak to this bill and indicate that the opposition will be supporting it. I am not quite sure how this happened, but it is interesting that this again involved a sense of urgency when the House of Assembly last sat. I think the government gave an indication to the member for MacKillop only the day before that it would be debating this bill on 22 September. Again, there was little opportunity to speak to stakeholders; nonetheless, we were able to piece together the intention of this legislation, which is to have greater flexibility in relation to short-term market trading.

As members would be aware, when electricity is produced it is put in at one end of a wire and taken out at the other end, almost as it is produced; whereas, with gas, there is some significant lapse between when it is produced and when it is used. I think it is two or three days from when it is put into a pipe at Moomba before it actually gets to consumers here in the city, so I guess it is like a large tank. Therefore, there needs to be a little more flexibility if production halts in the short term.

In Victoria, because there is closer proximity between the production area and the main consumption area, more immediate signals exist between the supply and demand sides of the market. In South Australia and in some other states, trading between suppliers and retailers is done by long-term contract. This has always worked smoothly here in South Australia but, as we go into more of a national grid and a national pipeline network, it has become important that we have this mechanism and flexibility. I note that New South Wales has experienced some problems associated with the nature of long-term contracts when gas supply ceases and market signals are not sent as quickly as they should be.

Support of this legislation is seen as a safeguard to establish a short-term trading market so that the more immediate signals will come into play. As I have mentioned, Victoria has a similar system which, as the opposition understands, has worked well in the past.

I think it is important to have this flexibility when we have a national pipe network so that, at the end of the day, consumers will not be disadvantaged if the gas supply is halted for some reason. We can actually bring market forces into play to support our supply as we did after the explosion and fire that occurred at Moomba some three or four years ago. Luckily, from South Australia's point of view, we had the SEAGas pipeline, which was an initiative of the former Liberal government. We were actually able to bring that online and not suffer any major problems here in South Australia. With those few words, I indicate that the opposition will be supporting this bill without amendment.

Bill read a second time and taken through its remaining stages.