Building a house of bricks - IMARC conference address

As the father of five children, I have become quite the expert on fairytales. Today I want to start by talking about one, the Big Bad Wolf.

I am sure you all know him. The Big Bad Wolf is a scary figure who huffs and puffs. He does a great job of scaring the little pigs with his roar. However, when it comes to it he can’t blow the house down.

Our friends in the green activist movement so often present themselves as the Big Bad Wolf. They make threats, they inflate their support base and they build themselves up to be scary to all. However, when it comes to actually blowing something over they are so often shown to be more huff than puff.

This year’s federal election was just another example. We were told it was going to be the climate change election. That action on reducing emissions was the most important issue for voters. That people didn’t like coal mines and they certainly wanted to stop Adani.

All of these things were proven wrong. People want jobs. People want to improve the environment but they don’t think we should do so at any cost. People have great common sense, knowing that even if we shut off every light in Australia it is not going to change the temperature of the globe.

As I have said, this year’s federal election was a hi-vis revolution. The numbers tell the story. In the last month, the Australian Electoral Commission released data that matched voting to individual small “statistical areas” across the country. That data shows that the swing to the Liberal National Party in statistical areas with above average employment in mining was three times higher than for the rest of the country. In coal mining areas, the swing to the LNP was almost five times higher.

Indeed, there is a statistically significant relationship between the swing to the LNP and the share of an area’s employment in mining. Of the top statistical areas that had the top 100 strongest swings to the LNP, two-thirds had higher than average shares of employment in mining.

In my view these are great results for the mining industry. Even from my perspective, the best outcome from the federal election was not the re-election of the LNP Government - although my wife is happy that I still have a job - the best outcome is that we have a mandate to get on with the job of developing our nation and helping the world.

My political opponents were running at the election in front of big red octagonal stop signs that read “Stop Adani”. But really you could have substituted “Stop lots of other things” too. Their agenda was not just to stop one mine, it was to stop all coal mines. They wanted to stop dams, stop logging, stop fishing, stop hunting, even stop driving, unless you are driving in a convoy to Central Queensland. (Once again, thank you Bob Brown. Thank you.)

My vision for the resources industry and our nation is best represented by the opposite traffic sign to the stop sign. The green light. A green light for new mining basins, a green light for dams and a green light for the continued economic industrialisation and development of the world.

That is what we are getting on with now with the development of the Galilee Basin through Adani’s project, the opening up of the Beetaloo with new wells being drilled in our first shale gas play and progress on reaching agreement on the Browse Basin too.

Post-election what I am focused on is building a house of bricks. A house of bricks made up of jobs and opportunity for people that no one will be able to blow down. Part of that house of bricks must also be reminding people about how important the resources industry is to humanity’s development. The use of our natural mineral and energy resources is a necessary condition to help end poverty, improve lives and provide for more equal societies. Perhaps we may think that this is such a commonsense position that it does not deserve repeating but I think the obsession in some quarters with climate change is overshadowing the broader human development goals that we have as a world.

We should reduce carbon emissions, and the Australian Government is strongly committed to that, but it is just one of many global goals to help the world. We also believe in making progress on the sustainable development goals of the United Nations. These goals include No Poverty, Zero Hunger and Decent Work and Economic Growth.

We also must tackle other environmental issues such as local smog and air pollution that bedevil parts of our region and cause thousands of deaths every year. These air quality issues are almost all caused from the continuing burning of low quality biomass and coals in unflued and domestic environments.

And, yes they include the need to reduce carbon emissions.

The greater use of high quality Australian resources gets us closer to every one of these goals. Whether it is the need to reduce poverty, improve air quality or reduce carbon emissions, the greater use of clean Australian coal, gas and other resources helps achieve all of these admirable goals. Australian coal and gas helps end poverty. Australian coal and gas helps improve air quality and Australian coal and gas helps reduce carbon emissions.

In the case of poverty we have seen the evidence very clearly over the past 30 years. In our generation and in our region we have witnessed the most remarkable event in economic history. In the mid-1980s, two-thirds of people in the Asia-Pacific region, our home, lived on less than US$1.90 per day - a well established poverty line. Today, less than 5 per cent of people in our region live on less than US$1.90 per day.

Over that same time period the use of fossil fuels in the Asia-Pacific region has grown by more than six times. Clearly it has been the use of affordable and reliable energy that has helped fuel the economic growth that has propelled so many out of poverty. On these numbers, more than 2.5 billion people are no longer in poverty thanks to the industrial and economic development of the Asia-Pacific, in part fuelled by Australian resources.

Our resources also help improve air quality because they so often replace poor quality fuels in energy production methods. For example, India still relies on biomass for more than 20 per cent of its energy needs. A less diplomatic term for biomass is straw, wood and sometimes dung. All of these products when burnt in household stoves produce toxic concentrations of particulates that create smog. And often the coal that is used is burnt in domestic or small business boilers that don't have modern scrubbing techniques that remove soot first. Australia coal is not burnt in such facilities. Those that pay the cost of importing coal over vast oceans don't then drop them into primitive boilers. Australian coal is used in modern coal fired power stations that produce nowhere near the same level of particulate matter.

You don't need to believe the theory to understand this. You just have to visit Japan that is powered by Australian coal and gas but has good air quality because it has become rich enough to afford modern energy production techniques.

For similar reasons our coal and gas helps lower carbon emissions too. Adani's coal from the Galilee Basin will be about 5550 kilocalories per kilogram. Indian coal is around 3000 kilocalories per kilogram. So that means when a tonne of Galilee coal is used compared to Indian coal it will produce roughly 50 per cent more energy. Hence there will be fewer emissions for every tonne of coal used.

India plans to continue to use coal for decades, so if we don't use Australian coal global emissions will be much higher.

Don’t give an inch to the protestors outside on these points. I am happy for the Australian resources industry to take the Pepsi morality challenge against other businesses any day of the week.

There is a broader reason why those who truly want action on climate change should support the development of Australian resources. Other countries are not going to prioritise reducing carbon emissions before providing nutrition or housing to their people. We can see that in-built in the Paris agreement where developing countries have much lower obligations to reduce emissions.

If we truly want all countries to reduce emissions we must work towards making all countries rich enough to afford to do so first. If we restrict the use of Australian coal and gas that will make it harder for other countries to grow and develop. That will defer the time at which other countries will take emissions reductions seriously.

Economists have a word for things like climate change action, they are luxury goods. People demand more of them when their income increases. As income increases, demand for climate change action does increase so it is clearly a luxury good on these terms.

That means to get more action on climate change we need to increase people’s incomes. The development of our resources is part of the way to do that. We have a moral, economic and environmental duty to responsibly develop our resources to help deliver better outcomes for all people in the world.

As I mentioned earlier the greatest outcome from the election is that this task of resource development has been made easier. But I am the first to recognise that things are not yet perfect. Far from it!

At last year’s IMARC meeting I foreshadowed the impending release of the government’s National Statement on Resources. Earlier this year we released that statement, the first of its kind for 20 years. As I said last year, the central objective of this statement is to make Australia the greatest resource nation in the world. If there is one thing I can try to do to help achieve that, it is to reduce the time it takes for approvals.

That is why one of the government’s first acts on re-election was to establish a Productivity Commission inquiry into reducing red tape on the resources sector. The inquiry has a broad remit to focus on federal and state laws and to benchmark these laws against those of other countries. Submissions close on 31 October so it is not too late to get your thoughts in. You have about 24 hours! We need lots of good ideas.

Yesterday the government announced the panel that will conduct the statutory review of the federal EPBC Act. This is another ability to highlight where delays impose unnecessary costs on development without protecting the environment. Again it is important for the industry to be involved in these initiatives.

Both of these inquiries will feed into the government’s broader deregulation agenda led by Ben Morton.

We are also supporting the opening the up of new basins. The Galilee Basin is now proceeding with the Adani project. In the past month the first well in the Beetaloo Basin since the lifting of the Northern Territory’s fracking moratorium has been drilled. And we have had constructive discussions with the Browse Basin Joint Venture about hopefully getting that project towards a final investment decision.

The government is also supporting the broader minerals sector with its $100 million Exploring for the Future program. That program is using the latest seismic and aeromagnetic techniques to try to find new discoveries. Some great work has already been done especially in the south Nicholson Basin that straddles the Queensland and Northern Territory borders.

This work is especially important because there has never been a greater need for the mining industry. The mining industry has always been important. The Ancient Roman historian Alexander Demandt once compiled 210 reasons for the fall of the Roman Empire. One of the 210 reasons was the depletion of its mineral resources, especially those at the ancient mines at Rio Tinto.

Just like in Roman times, the future health of our economy and society will depend on continuing access to high quality mineral resources.

To achieve that we must continue to be proud advocates for the benefits of what mining achieves. Don’t be like the first two little pigs and run away. Let’s get on with the job of building a house of bricks that builds a better world with less poverty, longer lives and a cleaner environment.

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