Beware gas flares when business and politics collide

RELIGION and oil rarely mix. One sees itself at the peak of morality. The other at the peak of business – and Slugcatcher will let the reader judge which is which.

While bringing together these two great industries of God and Mammon is not easy, they seem to be doing a fine job of it in Western Australia.

Over there, in the land of the perpetual boom, a “tithing” argument of the first order is getting underway.

Tithing, for the philistines reading this column, is the practice of donating one-tenth (a tithe) of your income to your local church. In the American Mid West and Deep South, tithing is still in force, along with other strange customs such as prayer breakfasts before petroleum conventions, which The Slug reckons is the ultimate in mixing morality and commerce.

In WA, the 10% in question relates to undeveloped gas reserves and a proposal from the socialist side of politics that it is appropriate for that amount of gas in every major discovery to be preserved for local industry.

The free enterprise side of the argument, led by Federal Resources Minister Ian Macfarlane, says tithing gas for the locals is wrong. In fact, Macfarlane’s exact words are “an improper intervention in the free market”.

After uttering that remark, his Federal counterpart, Martin Ferguson, warned that without a gas reservation policy, Australia risked losing some of its mineral processing industries.

The debate, so far, appears to have covered the moral question of whether local industry deserves special treatment, but does not seem to have canvassed the question of the price at which the tithed gas would be sold.

Presumably the socialist thinkers want the gas made available at a discount, otherwise there’s not much point in tithing because all the gas you want becomes available under a world parity pricing system.

The Slug, having weighed up the argument of “to tithe, or not”, comes down in favour of setting aside some gas for local industry, be it mineral processing or anything else.

Business purists may be horrified at that suggestion, but it is something the rest of the natural gas world is doing, and it is at a level which should not hurt a proposed gas development.

There is also the example of how the original big west coast gas project, the North West Shelf, started life with a clear demarcation of export and domestic gas – a policy dictated by a very right-wing WA Premier, Sir Charles Court.

For Macfarlane to argue against tithing he must also criticise what dear old Charlie did, and that’s about as close to heresy as you can get in WA.

Rather than both sides of this debate simply adopting a philosophical position that suits their current interpretation of the left and the right of political life, The Slug believes we need a more informed discussion.

Macfarlane can argue his case that the market knows best. Ferguson can argue that sometimes a bit of interference is a good thing.

The funny aspect to all that is that the socialist-leaning mob arguing for a tithing arrangement will have an old religious habit on their side, which might be a new experience for them.

Most read Commodity


Most read Commodity