The Politics of Gas in the NT - Syd Stirling on Gove, Pacific Aluminium and the CLP
Previous CLP Governments under Marshall Perron and Shane Stone, including the still involved Barry Coulter would not have hesitated to support Pacific Aluminium. The current Chief Minister's risk adverse dithering stands in stark contrast to the "we can and will do it" attitude of his precedessors.
Syd Stirling was the Labor member for Nhulunbuy in the Northern Territory Legislative Assembly from 1990 to 2008.
In 1999 he was elected Deputy Leader to Clare Martin,and served as Deputy Chief Minister following the ALP’s election win in 2001. He resigned along with Martin in November 2007, and retired at the 2008 election.
The Chief Minister’s refusal to support Pacific Aluminium in Gove with gas is an indication of how far the new CLP Government has moved from its origins as a pro growth and development homegrown grassroot’s political party.
The Chief Minister does not understand the magnitude of the loss in economic, social and political terms if the Gove refinery closes.
The economic costs start with, $550 million, the cost of the pipeline, $250 million, the cost to conver to gas, $600 million in loss Gross Domestic Product, $200 million to local contractors, suppliers and businesses, royalities to Traditional Owners and the Northern Territory Government, Payroll Tax to the Northern Territory Government and income and company tax to the Commonwealth.
The loss in social costs extends beyond health and education. Without a local hospital, every expectant mother will be medically evacuated to Darwin. There will be no local high school. The broader region encompassing Aboriginal communities and homelands rely heavily on Nhulunbuy for all manner of goods and services which will be gone within a year of plant closure.
In political terms, business will look sideways at investment in the NT viewing it as an unfavourable investment climate if the Chief Minister forces the closure of a mining town.
Compare this loss to the risk to the NT on supplying gas to Gove. The NT has a 25 year deal for gas from Blacktip from 2007 to 2032.
So, if the NT sold 5 years of gas to Pacific Aluminium the impact would not be realised until 2027.
That leaves 14 years for the Northern Territory to source additional gas which it will require beyond 2032 in any case. In addition there will almost be an immediate domestic customer for gas in the NT in Pacific Aluminium which will require supply beyond whatever the Northern Territory sells it. Increased demand will drive supply.
That is how our economy works.
The NT will likely have an abundance of gas in the next 5 to 8 years if the US experience is replicated here. There is gathering momentum in exploration and early signs are positive.
Previous CLP Governments under Marshall Perron and Shane Stone, including the still involved Barry Coulter would not have hesitated to support Pacific Aluminium. The current Chief Minister’s risk adverse dithering stands in stark contrast to the “we can and will do it” attitude of his precedessors.
Former Member for Nhulunbuy
This letter was first published in the NT News on 30 January 2013