The gas project born in a cross-fire hurricane
Australia’s biggest proposed industrial development is looking on increasingly shaky and unsecured ground, with Woodside this week announcing it was asking the Federal Government for a year-long extension on making a final investment decision on its contentious Kimberley gas plant.
That comes less than two weeks after Western Australian Supreme Court Chief Justice Wayne Martin handed the James Price Point gas project its biggest setback by ruling that the WA Government had acquired the land illegally.
The Chief Justice found that the government had botched its rushed attempt to compulsorily acquire the land 60 kilometres north of tourist gateway Broome after negotiations between the government, Woodside and the Kimberley Land Council stalled last year.
In an act of startling incompetence, the WA Government was found to have failed to adequately describe the land it wanted to acquire.
The failure to successfully undertake even the most basic paperwork to secure the future of Australia’s largest proposed industrial development is incredible and places a question mark over the ability of the WA Government to successfully deliver large projects.
Smelling a business opportunity, Northern Territory Chief Minister Paul Henderson last week invited Woodside to move the project to Darwin, the proposed home to Inpex’s gas plant, which will process from the same basin James Price Point is supposed to service.
And just to make matters worse for the proposed Kimberley gas hub, about 1000 Broome residents marched through the streets to tell Woodside they didn’t want the development on their doorstep.
The Supreme Court decision was a major setback for the blighted $30 billion project and follows hot on the heels of a voter backlash against the development at the recent Broome Council elections which saw the election of a number of prominent anti-gas hub campaigners onto the council with an explicit no-gas hub platform.
Meanwhile, preliminary works on the site have been frustrated by a long-running local community blockade of the main access road which is led by local traditional owners. Elsewhere across the country, anti-gas hub action groups have been springing up like wildflowers.
Even within corporate Australia, questions have been publicly asked by then projects joint-venture business partners such as Shell and BHP about whether the deeply unpopular and very expensive James Price Point option is really desirable to piping gas down to existing gas processing facilities in the Pilbara.
The project is a mess, with ever-increasing opposition developing across the country, widespread divisions within the traditional owners and the wider Broome community, and project timelines blowing out by months, if not years.
So how did Woodside and the Western Australian Government get themselves into this predicament?
The picture all looked much more rosy only two-and-a-half years ago when Western Australian Premier Colin Barnett, Federal Resources Minister Martin Ferguson, Kimberley Land Council boss Wayne Bergmann and Woodside chief executive Don Voelte jointly signed a Heads of Agreement at James Price Point on April 27, 2009.
The signing of the agreement by these four men was heralded as a key milestone in the delivery of the gas hub and a new start in relations between traditional owners, the resources sector and the governments. Yet the fate of these four tells a story of failed ambitions and overreach.
Wayne Bergmann, long time leader of the Kimberley Land Council, is long gone from that role and on August 31 this year told ABC Kimberley that Federal Environment Minister should not approve the project because there are no plans in place to deal with the social impact of the project.
Long time Woodside CEO Don Voelte, considered by many to be the primary supporter of the James Price Point misadventure (alongside Premier Barnett) is also gone, replaced by the far more conservative and less abrasive Peter Coleman.
Over recent weeks there has been considerable media speculation that Coleman is on the verge of cutting his losses with James Price Point and concentrating on delivery existing projects already in the construction stage such as the Pluto gas plant in the Pilbara. Yesterday’s announcement doesn’t hose down that speculation.
Ferguson, the Federal Resources Minister, remains a staunch supporter of the development. However factional supporters of Ferguson, who support his strong advocacy of Australian jobs and Australian manufacturing, worry he’s about to be left high and dry as Woodside considers Plan B and looks to pipe the gas to the Pilbara.
This leaves Premier Barnett. Alone amongst the ill-fated four he stands like resolute like colossus of Rhodes, defying setback after setback and leading with his chin.
Electorally Barnett continues to ride high but at some point colleagues will ask the questions about whether his James Price Point obsession is worth the political cost and whether their government can continue to be embarrassed as they were in the Supreme Court earlier this week.
As the year draws to the close and as the onset of the wet season threatens to close down construction work at James Price Point, potential investors must be wondering if the enthusiasm for the project shown a little more than two years ago is now more than a little misplaced.
And the grounds for investor concern are documented in a string of abandoned industrial projects across the country that lost the social license to operate. Gunns moribund Pulp Mill project is a testament to what happens when a major industrial project loses the support of the local community, and anyone who visits Broome will quickly realise that this project is despised.
Read all about it
Up to the minute Twitter chatter
The latest and greatest
Good morning Punchers. After four years of excellent fun and great conversation, this is the final post…
I have had some close calls, one that involved what looked to me like an AK47 pointed my way, followed…
In a world in which there are still people who subscribe to the vile notion that certain victims of sexual…