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Wednesday, 19 March 2008
Page: 2366


Mr PERRETT (11:06 AM) —I am pleased to speak in support of the amendments to the Offshore Petroleum Act in the Offshore Petroleum Amendment (Miscellaneous Measures) Bill 2008. The oil and gas industry is a significant part of the Australian economy, accounting for around 2.5 per cent of GDP, so, when it comes to amending the legislation that regulates this industry, it is important we get it right.

Oil and gas currently account for around 33 per cent and 21 per cent respectively of Australia’s primary energy consumption.

A division having been called in the House of Representatives—

Sitting suspended from 11.07 am to 11.22 am


Mr PERRETT —The value of oil and gas produced in Australia in 2007-08 is estimated to be in excess of $27 billion, with exports valued at around $16 billion. Total production of crude oil and condensate in 2006-07 was 28,844 million litres or 504,000 barrels per day, while total production of natural gas was 39.4 billion cubic metres. The industry in Australia consists of more than 200 small, medium and large companies—obviously global companies—and employs about 15,000 people. It was reassuring to hear from the previous speaker, the member for Brand, of the APIA commitment to actually growing that industry.

This financial year the industry will pay about $3.6 billion in resource taxation to the Australian government. With more than 100 years of gas reserves and a glut of undiscovered petroleum reserves offshore, the industry has a very bright future in Australia—especially in a planet where energy resources are shrinking. In fact, the International Energy Agency believes Australia will become the third largest exporter of LNG in the world within the next decade.

The Offshore Petroleum Act was passed in March 2006 to bring the legislation into the 21st century. It effectively replaces the Petroleum (Submerged Lands) Act 1967—having been born in 1966 myself, I can see that things have changed a little bit in the last 42 years. The original act has been repeatedly amended and as a result it has become much too complex and cumbersome. It was therefore time that legislation for the administration of Australia’s offshore petroleum resources be revamped.

The new act replaces the old language, style and structure of the previous act with modern standards which will result in some savings in compliance cost to government and to industry. The user-friendly language of the act will ensure administrators in industry and government do not require a law degree to interpret the legislation. Not that I am knocking lawyers or their role in this sector or in court; I would be knocking myself. However, the act has not yet been proclaimed. I understand that the proclamation will not be made until the states and the Northern Territory make amendments to their mirror acts. These acts enable the state or Northern Territory minister to perform the functions as a member of the joint authority and as the designated authority under the Commonwealth Offshore Petroleum Act.

Northern Territory, Queensland and South Australia have made the necessary amendments to their mirror legislation, while New South Wales, Western Australia and Victoria can rely on the provisions of their interpretation acts. The Offshore Petroleum Act can therefore come into force following the enactment of the amendments currently before the House and the finalisation of the Tasmanian mirror legislation. I am sure the member beside me, the member for Braddon, will make sure that happens quickly! The timely passing of this bill will ensure no more delays in proclaiming the act.

These amendments are necessary to ensure that the regulatory regime continues to support the efficient exploration and development of our oil and gas reserves. This bill will make technical corrections to the act, ensuring that the provisions for the term of production licences operate the way that was originally intended. It will make certain that those production licences that were renewed for an indefinite duration at first renewal are preserved, but any subsequent renewals will only be granted for a 21-year term. Having worked in the resources sector, I am aware that, whilst sometimes people would want more than a 21-year term, 21 years is appropriate timing. It gives sufficient certainty to industry but also sufficient opportunity for government to have some influence.

The one policy change in this bill relates to the emergency power of the Commonwealth minister. This bill will repeal section 327 of the Offshore Petroleum Act, which relates to declarations of a state of emergency by the commonwealth Minister for Resources and Energy. Under the act, declarations of a state of emergency can be made when there is a likely threat of terrorist activity. However, since the minister has never had to make such a declaration and as this matter is better covered by the Maritime Transport and Offshore Facilities Security Act 2003, it is best removed from the act.

The act allows federal unions to serve as workforce representatives in an occupational health and safety scheme—something to be commended. This bill amends the definition of ‘workforce representative’ to allow transitionally registered associations recognised under the Workplace Relations Act 1996 to be appointed. The amendment ensures that all unions recognised under the Workplace Relations Act can be workforce representatives. Personally, I have seen good unions do great work when it comes to health and safety on work sites, so it is hoped that this positive role will continue. These provisions are unlikely to be affected by the government’s election commitments on industrial relations.

The bill also takes into account advances in global positioning technology. As I understand it, the bill subscribes to a more accurate mathematical model of the world, rather than the previous view as to where the centre of the world was. The centre of the world is not Tasmania, I would suggest to the member beside me, the member for Braddon.


Mr Ian Macfarlane interjecting


Mr PERRETT —It might be near Toowoomba but a little bit away from it! This new model is known as a geodetic datum and, as clarified in the earlier speech made by the member for Brand, it really is about the up-to-date analysis of where something is. Obviously, when it comes to mining leases and exploration leases and drilling, we need to know exactly where we are. The GPS data ensures that that is much more accurate. The previous geodetic datum was designed for the mainland, and its centre was not the centre of the earth. New global positioning systems are more suited to a geocentric datum and this is reflected in the amendments.

Finally, I am advised that the petroleum industry and state and Northern Territory governments were thoroughly consulted during the drafting of this bill, and I commend the minister for this.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.