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Wednesday, 17 September 2008
Page: 7692


Mr NEUMANN (12:57 PM) —The contribution by the member for Tangney is one of the most extraordinary that I have heard since coming to this House. I thought that those on the opposite side had an almost lukewarm approach to climate change. But, obviously, there is not just scepticism but outright atheism on the opposite side of the House. It must make for interesting meetings in the party room when they discuss issues of this nature.

I am here to speak about the government’s framework in terms of four bills that were introduced into this House on 18 June 2008. I am pleased to speak on them because it is critical to the future of our country that we get the issue of greenhouse gas storage right. The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, the principal bill, establishes the whole framework for injection and storage of greenhouse gases into a stable subsurface geological reservoir more than three nautical miles offshore in Commonwealth waters. The second bill, the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, is about annual fees alone, and they are rising. The Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 is about the registration that is necessary under the framework. The Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008 is an ancillary bill to the principal bill, the greenhouse gas storage bill.

The states have been involved in this type of process for a while. Several states have been involved in onshore carbon dioxide storage. South Australia has been involved in it through its petroleum legislation which provides for injection and storage of CO2. Victoria has introduced a bill into parliament to govern storage in its jurisdiction. Queensland is currently drafting a stand-alone type of legislation which will provide a separate tenure regime for onshore carbon dioxide storage in Queensland. The other states are in the embryonic stages of considering such legislation.

This particular legislation deals with the Commonwealth jurisdiction and is important in terms of its features. It talks about the rights of precommencement petroleum titleholders being given a high level of protection where there is potential adverse impact on their operations. I am pleased there is a differentiation between precommencement petroleum titles and postcommencement petroleum titles in relation to exploration. The holders of certain tenure must obtain approval from the responsible minister in order to carry out key greenhouse gas operations. I am also pleased that it is left to the common law with respect to long-term liability arrangements.

This particular piece of legislation, the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, is the main piece of legislation. It governs the injection and storage of carbon dioxide offshore and underground in stable subsurface geological reservoirs in Commonwealth waters. New titles will be located in the area more than three nautical miles offshore in our coastal waters and the outer limits of the continental shelf within the jurisdiction of the federal parliament and the Commonwealth of Australia. The amendments in these bills mean that the definition of ‘greenhouse gas substance’ will be carbon dioxide together with incidental substance derived from the capture or injection and storage processes—with the addition of chemical detection agents to assist in the tracing of the injected greenhouse gas substances. There is provision for the extension of the meaning of greenhouse gas substance to include other greenhouse gases. This bill effectively establishes three categories of storage formation—a potential greenhouse gas storage formation, an eligible greenhouse gas storage formation and an identified greenhouse gas storage. So the bill is about providing access and property rights for greenhouse gas injection and storage offshore and ensuring the security and safety of same.

The minister is to be commended for resolving the really delicate and difficult balance between offshore petroleum industries and greenhouse gas storage industries offshore. There are different competing interests and the minister has done a fine job, in my view, to resolve potential conflict. We need certainty for those companies involved in producing so much wealth for this country. There are companies involved in greenhouse gas injection and storage which produce huge amounts of money for our economy; and the petroleum industry is crucial to our continued wealth and the lifestyle that we Australians enjoy, which is the envy of so many people in the world.

The petroleum industry wants to operate and utilise its offshore rights to drill, and that is natural. The minister is to be commended for the consultation process he undertook with industry and also for the unusual step of referring the matter to the House of Representatives Standing Committee on Primary Industries and Resources so that it could conduct an inquiry into the wording of the draft bill, its objectives and its intentions. The House of Representatives committee believes that the bill does establish an effective framework for access and property rights, provides an appropriate regulatory regime for the management of greenhouse gas injection and storage, and provides a predictable and transparent system to manage the interaction between greenhouse gas re-injection and storage on the one hand and petroleum operations on the other.

What does industry have to say about this? Well we have seen ExxonMobil endorse the framework established by the bill, albeit with certain caveats. They said, and this was reported to the committee:

ExxonMobil believes that the Bill establishes a framework that is suitable for adoption on a national basis by using a regulatory structure analogous to petroleum regulation in Australia. In particular, we note and support the intent of the provisions of the Bill designed to protect the rights of existing petroleum license holders.

Likewise, Chevron supported the use of offshore petroleum legislation as a model. They said:

The proposal to establish a series of title rights equivalent to those applied to the upstream petroleum industry provides an effective mechanism for providing property rights for carbon dioxide storage proponents and for the regulation of activities related to the storage of greenhouse gases. This property rights model has provided certainty for the oil and gas industry and is an appropriate model for the establishment of a greenhouse gas storage industry.

The House of Representatives committee, in its quaintly titled Down under: greenhouse gas storage report tabled in August 2008, endorsed the bill. There were a number of recommendations made, and I think the minister took up about 17 of the 19 recommendations. The amendments to the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 were developed to address the recommendations of the committee, and the minister has certainly consulted widely with the committee members. I am very pleased that so many submissions were tabled from so many interested stakeholders in this regard, because it is important that we get this right for our future.

On 3 August 2008 the minister welcomed the report of the standing committee. He described as ‘exceptionally good’ the work the committee had done in its consideration and in the preparation of its report. I have read that report in its entirety. It certainly discusses the issues in detail—every issue was investigated. It was a bipartisan approach. I listened to what the previous speaker had to say, and his response was extraordinary compared to that of the members on his side who were clearly involved in the whole process and the preparation of the report.

When the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 was discussed and introduced by the minister, along with the ancillary legislation, on 18 June 2008 in this House, he said that the offshore petroleum amendment bill was the most appropriate vehicle for the implementation of a greenhouse gas injection and storage regime offshore. The Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008 relates to the registered holders of petroleum titles held under the Offshore Petroleum Act who pay an annual fee for the term of the titles. The amending bills add greenhouse gas titles to the titles in respect of which annual fees are paid. Similarly, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 adds greenhouse gas titles to titles in respect of which transfers and dealings will attract the imposition of registration fees. The Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008 extends the imposition of a safety investigation levy, the safety case levy and the pipeline safety management plan levy in respect of petroleum facilities and pipelines in offshore waters to greenhouse gas facilities and greenhouse gas pipelines. It should be noted that the bills will have no financial impact on the federal government’s budget.

Climate change is a really big challenge. The farmers in my area have told me they have seen climate change through many years of work on the land. The farmers in my area go back generations. There were mainly German settlers in the Lockyer Valley and they got on very well. Recently Bill Hayden, the former Governor-General, said to me that he thought that, in my area, the German Protestants and the Irish Catholics got on very well because they both hated the English! They had a rugged time when they were farming the land and clearing the Rosewood Scrub. It was a tough time in those areas. So they are tough people. They are really decent, honest, hardworking people in the Lockyer Valley and also in the Fassifern shire. They work particularly hard on the land. But they have said to me that they have noticed the change in the weather patterns. They have lived for a long time with dry summers and water shortages, and it is to be noted—notwithstanding what the previous speaker had to say—that the 12 hottest years in history have been recorded in the last 13. And certainly the farmers in my electorate of Blair in South-East Queensland have said that to me on numerous occasions. This legislation that we are dealing with today is about committing ourselves to addressing climate change and reducing Australia’s emissions, and the storage and injection of greenhouse gases in this way is crucial—it is part of a whole framework.

Why should we act? Well, notwithstanding what the previous speaker said, we are acting and we are acting because it is responsible to do so, because it is real that humankind has made an impact on the climate in which we live. Our response is based on three pillars. It is about reducing Australia’s greenhouse gas emissions; adapting to climate change, which is really happening throughout the world and which we are experiencing all the time; and helping on an international basis to achieve global solutions to these problems. That is what we are doing and that is what we are all about.

The government’s Carbon Pollution Reduction Scheme will place a cap, a limit, on the amount of carbon pollution which an industry can emit, and this legislation we are dealing with today is all part of the same framework. We are doing this because it is necessary. We are doing this because it is good for us, it is good for our children and it is good for the planet. I have said before that if John Grey Gorton were here today—the former Liberal Prime Minister who once famously said that we were all socialists now—he would say, ‘We are all green now’—except some on the opposite side, who may not necessarily adopt the same view that we do and that, I believe, the Australian public and certainly the people in my electorate do in terms of climate change.

The government recognise that there will be adjustment costs for industry, just as we recognise that there will be challenges for the petroleum industry and those who work offshore. But we will do things to assist households. We will cut fuel taxes on a cent for cent basis, to offset the initial impact on fuel associated with the introduction of our Carbon Pollution Reduction Scheme, and that will help people in my electorate when they are facing these challenges. We recognise that there will be a cost to businesses. We recognise there will be costs for businesses with the legislation that is before the House. We recognise there will be adjustment costs. But, as we move towards a low-carbon economy, we need to do these sorts of things.

That is why we are establishing the Climate Change Action Fund and the Electricity Sector Adjustment Scheme. We cannot ignore the fact that 20 per cent of the total exports from our country are energy resources, and that proportion is growing. We account for 30 per cent of the world trade in coal. We are a clean coal supplier—and we need to be. We need to be at the higher end of the clean coal spectrum. We supply about eight per cent of the world’s liquefied natural gas. We provide almost a quarter of the world’s mined uranium. And that is why the resource sector is so crucial for our wealth and our future wealth. But we cannot just do nothing about these sorts of things. Eighty per cent of our electricity is generated by coal. So we have to respond to the challenges of coal, the challenges of oil and the challenges of natural gas.

The legislation that is before the House will create an environment in which industries can invest in carbon capture and geological storage projects with confidence, and it will encourage the commercialisation of technologies which have a great potential to play an important role in reducing global greenhouse gas emissions. The bills provide those involved in these industries with the ability to develop further technologies which will assist future industry—industry that we do not even consider will be around. Many of us would not have dreamed that we would have computers on our desks every day. We cannot envisage the kinds of jobs that our grandchildren will eventually have. This sort of legislation will allow technologies to develop and industries to prosper which will help our future generations. And, contrary to what the member for Tangney said, science does tell us that continued high levels of carbon pollution have led to global warming. And if we go on, on a business-as-usual trajectory, the consequences for all of us will be significant. They will be significant for my part of the world because in Queensland we have the Great Barrier Reef. Just imagine the damage that global warming will do to that!

The International Energy Agency estimates that CO2 capture and geological storage has the second largest potential, behind energy efficiency, to develop cuts in CO2 emissions. And this is because Australia has significant CO2 storage potential in offshore waters. We could store about 25 per cent of our annual CO2 emissions there. These amendment bills are required to enable the government to release areas offshore in which to store these types of emissions.

Some people have said it takes courage to do what we are proposing to do, but I do not agree. I think it is really reckless not to act. It is reckless for us, for our children and for our grandchildren. I do not think we can delay when it comes to these sorts of things; we must act. That is why the Rudd Labor government has a comprehensive national plan to tackle climate change, from the development of renewable energy and energy-efficiency solutions to international action and initiatives such as signing the Kyoto protocol, which it did almost immediately upon taking office. The government is developing what we call the Carbon Pollution Reduction Scheme, which is designed to bring down carbon pollution emissions with minimal impact on businesses, households and the economy generally. The previous government spent years arguing about whether climate change even happened, and the previous speaker verified everything that I have just said when it comes to that issue. It is not even clear today where the opposition stands. We know where the member for Tangney stands; he has let us know very clearly.

The Garnaut report, as well as the experience of other countries, concludes that an emissions trading scheme is the best way to reduce our greenhouse pollution. This is why we are doing it and why this legislation is part of the whole framework. At present industry and business have no limit on how much they can pollute, and that is why we have global warming. An emissions trading scheme will require business and industry to buy pollution permits for each time pollution is contributed to the atmosphere. That is good. Our businesspeople are flexible, hardworking and dedicated to the pursuit of the national interest, but there is no cost-free option for tackling climate change. An emissions trading scheme is the best way to reduce pollution at the lowest cost to our economy, and the type of legislation we are debating today is important in the scheme of things. Accordingly, I commend the bills to the House.