Setting aside gas is folly: Macfarlane

Someone should explain to federal minister Ian McFarlane that liquified natural gas can be an alternative to petrol to run our cars ... and at a fraction of the price.

LNG converters were developed by the late Max Washbourne in the 1970's in Melbourne and patented by Peacock & Smith. They were sold to public transport fleets around the world but were never allowed to be fitted in Australia.

For more on Australia Energy Superpower dreams, go to the watchdog article Which Prime Minister thought of this one?


Setting aside gas is folly: Macfarlane
July 31, 2006 - 6:36PM

A proposal by Western Australian Premier Alan Carpenter to set aside some of the state's gas reserves for domestic consumption is "sheer folly", federal industry, tourism and resources minister Ian Macfarlane says.

It would send the wrong signal to investors in the mining industry, he told a business lunch in Brisbane.

Mr Carpenter said last week up to 20 per cent of the reserves should be held back to meet future domestic demand, rather than being exported as liquefied natural gas to markets in Asia and North America.

The premier warned that under current contracts, natural gas supplies for WA households and industry could run out within 10 to 15 years and Western Australians should not be forced to pay international prices for gas found in their own backyard.

But Mr Macfarlane described the announcement as "incredible".

"He would, in fact, apply a new tax to gas resources in Western Australia," Mr Macfarlane said.

"By suggesting to the gas industry in Western Australia that 20 per cent of their reserves should be set aside for an unknown time and an unknown price - and the only thing we know about price is that it would be less than it's worth on the export market - to me is just sheer folly.

"The message that that sends to potential investors is one that they cannot be sure of the investment climate in Australia."

Mr Macfarlane said the average labour cost on construction projects was around $240,000 per person per year and withholding reserves would only be added cost.

"To say to a company 20 per cent would be pretty close of a good slice in profit will now have to be set aside on the whim of a state premier who apparently doesn't understand economics is quite unbelievable.

"It is an extraordinarily dangerous signal for Australia to be giving."

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