http://www.theaustralian.com.au/
RESOURCE giants will be told to step up their spending on mammoth new projects or risk losing their rights to tap the deposits, under an Abbott government plan to accelerate investment and kill off fears of an end to the boom.
The incoming government aims to use its power over the vast gas deposits to bring forward up to $180 billion in new investment, sending a blunt message to companies to develop rather than hoard the nation’s resources.
As Tony Abbott and his ministers prepare to be sworn into office today, the resource plan marks another stage in an economic agenda that promises to lift growth, but will depend on stronger business investment to deliver results.
The policy is also set to reignite debate on the cost burdens – including high salaries – that global companies blame for stalling Australian projects and diverting their investments into cheaper projects in Africa and Asia.
Incoming industry minister Ian Macfarlane told The Australian that companies should extract “every molecule” of gas to boost exports and supply the domestic market.
Mr Macfarlane warned that companies that shelved their projects could lose the “retention leases” they held over the reserves, given the commonwealth’s power to revoke the rights as they came up for renewal over the next few years. “I want to put the industry on notice that if the deposits are able to be developed they’ve got to be developed,” he said yesterday as he arrived in Canberra for briefings.
“We’ve got to make sure that every molecule of gas that can come out of the ground does so. Provided we’ve got the environmental approvals right, we should develop everything we can.”
The policy is expected to be put into place in coming days as Mr Macfarlane meets officials to review a list of retention leases that expire during this term of parliament, triggering talks with companies over their plans.
The priority is expected to be Woodside Petroleum’s enormous Browse project, which is on hold as the company seeks approval from federal and West Australian governments to build an offshore “floating” LNG facility rather than build a hub at James Price Point north of Broome. Woodside’s requirements include a variation in the retention leases over the Browse reservoir.
West Australian Premier Colin Barnett objects to the offshore plan on the grounds that more jobs will be created if the gas is pumped through pipes to James Price Point, but Mr Macfarlane supports the floating LNG plan and is preparing for talks to reach a compromise.
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