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Wednesday, 17 September 2008
Page: 7764

Dr KELLY (Parliamentary Secretary for Defence Support) (6:02 PM) —It is with great pleasure that I rise to speak in support of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and associated legislation. The establishment of the carbon capture and geological storage, or CCS, framework is an important step towards supporting the development of low-emissions coal technologies. The carbon capture and geological storage framework allows for the containment of greenhouse gas emissions, predominantly from coal-fired power stations, before they are released into the atmosphere and allowed to contribute to climate change. Capturing and storing greenhouse gases allows Australia to reduce its greenhouse gas emissions, reflecting the nation’s commitment to combating climate change, whilst maintaining the nation’s coal export industry.

Australia is the world’s largest exporter of coal, which is also our largest exported commodity. Our coal products currently provide 80 per cent of Australia’s electricity generation, and coal generally provides 40 per cent of the world’s electricity needs. Our nation cannot afford to cease its coal industry, for economic and strategic reasons. With global trends towards declining fossil fuel resources and increasing demand for fuel and energy, Australia needs to maintain its competitive edge in the energy market. Should Australia cease exporting coal, countries such as China and India, which rely on our coal exports, would simply source their coal imports elsewhere.

Clearly with the rate at which coal-fired power stations are being erected, our efforts to reduce Australia’s carbon footprint will be futile if we cannot also help provide solutions to reducing the impact of this expansion. China alone is building a new coal-fired power station every 10 days and over 500 in the next decade. As a signatory to the Kyoto protocol, and as a government committed to addressing climate change and reducing carbon emissions, it is our responsibility to endeavour to ensure that our use and the export of coal is supported by carbon abatement technology. CCS allows for Australia to reduce its greenhouse gas emissions whilst maintaining its international advantage in coal exports.

I am aware there is scepticism in some quarters about the likely success in developing this technology and about its effectiveness, but we have no choice other than to make this work. The science so far shows that there is every prospect that it can work. The Geological Disposal of CO2, or GEODISC, program of the Australian Petroleum Cooperative Research Centre from 1999 to 2003 found that Australia’s geological storage capacity was likely to be sufficiently large and accessible to present a viable emission mitigation option. The program also found that we could potentially sequester up to 50 per cent of emissions from major stationary sources and up to 25 per cent of our annual net emissions. There are already three industrial scale projects underway in Norway, Canada and Algeria.

Although the technology and science of geosequestration is still very much in progress, current understanding has led to the generally accepted conclusion that geosequestration can very likely effectively store CO2 at greater than 99 per cent efficiency for over 100 years, and likely for over 1,000 years. A recent comprehensive MIT study addressing the role of coal in a future carbon constrained world found that no knowledge gaps today appear to cast doubt on the fundamental likelihood of the feasibility of CCS.

It is economically and strategically vital that Australia maintain an international advantage in the provision of energy products such as coal, whilst still maintaining its commitment to tackling climate change. As the Minister for Resources and Energy mentioned in his speech of 18 March 2008, ‘Energy: the state of the nation’, the two major themes of energy policy for the next few years are energy security and climate change. It is vital that this nation is protected from strategic or economic vulnerability arising from the global downward trend in the availability of cheaply won oil, coupled with an increasing demand for oil. The exponential rise in the global reliance on crude oil is of great concern. Oil production is in decline in 33 of the 48 largest oil-producing countries, including Russia, Iran, USA, Venezuela, India and Mexico, with all of these having reached the maximum rate of petroleum extraction.

What is of much concern is that the increasing rate of demand and consumption is far outstripping the rate of supply. World demand for oil has increased on average by 1.76 per cent per year since 1994 and is projected to increase by 37 per cent over 2006 levels by 2030. The rise in demand has predominantly been driven by developing countries, with growth in industry and higher living standards driving up energy use. China and India are rapidly becoming large oil consumers. Although China has low per capita oil consumption, it is now consuming nine per cent of global oil. In 2003 China overtook Japan as the world’s second largest consumer of oil and is increasing its demand for oil at a rate of approximately 15 per cent per year. India’s demand for foreign oil has also increased as it continues to import 75 per cent of oil needs and is expected to triple oil imports by 2020. Even low increases in domestic demand in China and India will increase global usage considerably and affect other nation’s abilities to access oil. The impact of their consumption will be felt globally, particularly through adding pressure on oil prices.

Australia’s demand for oil is over 750,000 barrels per day. This is projected to rise to over 1,200,000 barrels per day by 2030. Australia’s self-sufficiency in oil is expected to decline significantly as future discoveries are not expected to make up for the growth in demand and the decline in reserves as oil is produced. This situation makes our nation strategically and economically vulnerable. Like most nations, Australia does not have access to large domestic supplies of crude oil. It is estimated that, by 2010, Australia will be importing 60 per cent of its domestic fuel needs. With increased prices this will significantly detract from the terms of our balance of trade.

Economic power will gravitate even more heavily to nations that have not yet reached peak oil and that are continuing to produce surplus oil for export, particularly in the Middle East. Given that oil production in the Middle East is subject to a high level of cartelisation and that there have been times when this has been used to achieve political leverage and, given the degree of political instability in the Middle East, it can be readily seen how our strategic vulnerability could be heightened.

Domestically, problems are already arising as a result of higher fuel costs, which will only increase as global peak oil is reached. Domestic industries that rely on fuel will be most affected, including transport, mining, agriculture and tourism. Farmers and producers in my electorate of Eden-Monaro, as with the rest of the nation, have already been affected as production and transport costs increase. This, in turn, is passed on to consumers. With the lack of public transport in a region like Eden-Monaro and the considerable distance many people live from services, recreation, work and town centres, the social costs could also be great. Use of oil in transport also contributes somewhere between 14 and 17 per cent of Australia’s carbon emissions. I believe, therefore, that we must work hard to break our reliance on oil and invest in fuel efficiency and alternative renewable sources.

In his acceptance speech to the Democratic National Convention on 28 August 2008, United States presidential candidate Senator Barack Obama announced that his goal for America was to end their dependence on oil from the Middle East in 10 years. Senator Obama committed $150 billion over the next decade to the challenge of renewable energy research and deployment. Similarly, in December 2005, the Swedish government appointed a commission to devise a program to reduce Sweden’s dependence on oil, with the intent of making Sweden fossil fuel independent by 2020.

The Rudd Labor government has not been blind to this issue and is implementing appropriate risk management measures to help mitigate the threat I have outlined. The government has committed to a mandatory renewable energy target of 20 per cent by 2020. The government has also committed $1 billion towards the research and development of renewable and low-emission energy technology. Such measures will not only reduce Australia’s reliance on depleting oil stocks but also contribute to the significant emissions reductions needed to tackle climate change. We have set aside $500 million for our green car initiative to promote the development of hybrid, fuel efficient and alternative energy vehicles. My colleague the Minister for Resources, Energy and Tourism is bending every sinew towards broadening our energy resource base.

I have made it a high priority to support the government’s national effort by becoming personally involved in working with my community in Eden-Monaro to make the area a centre for leading-edge technology and creative thinking when it comes to the renewable energy industry. The people of Eden-Monaro are keenly interested in contributing to the research and implementation of renewable energy options to both combat climate change and provide for fuel alternatives.

Research and development is ongoing into potential biofuels, and I have discussed this issue with representatives of the oil industry. It has been well publicised that problems of food security can arise when food crops are used to develop biofuels, which also leads to rising food prices. Some potential biofuel options may circumvent this problem by using plants that thrive in more marginal land. Using biomass to create biofuels has been another area of discussion and research. The Swedes are moving ahead with wood cellulose research as part of their ambitious objective. Eden-Monaro has a thriving timber industry which could offer potential in this respect. I will soon be holding discussions with representatives from the industry in my electorate and scientists from ANU to consider options for using biomass from wood waste, which is currently not being utilised, for energy and fuel production.

I also recently met with representatives from Bega Cheese, the Bega Valley Shire Council, our local community organisation Clean Energy for Eternity, and the Szencorp company to discuss a proposal I am pursuing that involves the establishment of a pilot project for harvesting the region’s livestock based methane emissions for biogas energy generation. This proposal uses an anaerobic digestion process that can not only be used to generate electricity, adding in any other available waste from the council and industry, but also result in an enriched fertiliser by-product. This is very important as methane emissions are the most serious of the carbon pollution problem. We will need to have a plan to neutralise or offset them by the time the agricultural sector is included in the Carbon Pollution Reduction Scheme in 2015, in line with our current thinking. Such processes are already being deployed in New Zealand and are in extensive use in Germany.

I am committed to looking for fuel alternatives and renewable fuels, as I believe it is essential in combating the twin perils of the global peak oil crisis and climate change. I am delighted to be working on this agenda in my electorate with Clean Energy for Eternity, or CEFE. This is a truly community based organisation, which is striving to make our region and Australia a better place to live in by tackling climate change through all means that can be achieved at the local and individual level.

In only two years the CEFE team has achieved a great deal. CEFE’s activities include their trademark human signs, with over forty events involving thousands of Australians. The combined schools human sign saw 5,000 school children spelling out their messages of concern and hope on more than 30 school ovals across south-east New South Wales and the ACT. Collaboration with local councils and surf clubs created Australia’s largest non-commercial human sign in an event involving over 6,000 people on North Steyne Beach, Manly. Initiating the LifeSaving Energy micro-generation project, they began with Tathra’s Surf Life Saving Club, installing solar panels and a wind turbine. This has now evolved into a national campaign with Surf Life Saving Australia and Coastcare committed to a two-year project to install renewable energy systems on all 305 surf clubs in Australia.

Enthusiastic local support was generated by CEFE for the LifeSaving Energy Big Swim series, which have raised over $70,000 to get renewable micro-generation systems up and running on seven local south-east New South Wales surf clubs by Christmas this year. LifeSaving Energy has spread to church groups and emergency services. Merimbula fire station installed a grid connected solar system in February 2008, saving almost five tonnes of CO2 emissions and generating $500 of income a year. CEFE resolved to bring a one to two megawatt community owned solar farm into the Bega Valley, and I was delighted to obtain $100,000 for a feasibility study for this project from our Green Precincts program, with a further $1 million to contribute to the construction of the farm if the feasibility study demonstrates its viability.

On 21 August 2006, CEFE was established when 400 people voted to set up a Clean Energy for Eternity working group and unanimously endorsed a motion setting local and individual targets for a 50 per cent reduction in our local carbon footprint and a 50 per cent transition to renewable energy by 2020. I have set the 50-50 by 2020 goal as an aspirational target for the electorate of Eden-Monaro. It should be understood that whatever national targets we settle on, that does not preclude local councils, businesses, community groups and individuals from achieving beyond this and in fact we would encourage initiatives at all levels in this respect. Since CEFE was established, the 50-50 by 2020 goal has been adopted by the Bega Valley, Eurobodalla, Cooma-Monaro and Snowy River shires. I am now calling on all successful new councillors assuming their positions as a result of the council elections in Eden-Monaro on 13 September to commit to working with CEFE and adopting the 50-50 by 2020 goal.

CEFE had its second birthday on 21 August and is continuing to come up with innovative climate change solutions tailored to the different towns and communities in our region. Some of these include collaboration with the Transition Town movement to build resilience and prepare communities for the dual challenges of climate change and peak oil; energy clinics to assist householders to identify how to make their homes cheaper to run through energy efficiency measures; and community gardens and bioregional trade to assist communities to reduce their greenhouse gas emissions in order to have access to affordable and locally produced fresh food.

The founder of CEFE, Dr Matthew Nott, and the team have recently received their second runner-up award in the 2008 IAG Eureka Prize for Innovative Solutions to Climate Change. This is a tremendous achievement for which we are all proud, and I am sure that they will be able to go one better in 2009. Other awards that have already come the way of Dr Nott and CEFE include the Nature Conservation Council of New South Wales award 2007 for most inspiring climate change group in NSW; the Green Globe Award 2007 for CEFE and Winner of the Energy Champion specifically for Matthew Nott; Australian Conservation Foundation Highly Commended 2008; and Dr Matthew Nott himself was awarded the Bega Valley dual citizen of the year for 2008.

I want to commend the great work that Dr Matthew Nott, Philippa Rowland, Derek Povel and many others who have put in to continuing the vital work of CEFE in Eden-Monaro and beyond. I would also like to acknowledge the Mayor of Bega Valley Shire, Mr Tony Allen, who chaired the first meeting of CEFE in August 2006 and who has been at the forefront of the effort against climate change on the Bega Valley Shire Council. I would encourage people to visit the CEFE website at and find out more information about how to get involved. I am pleased to say that I will be holding a climate change forum in Bega RSL on 5 November in conjunction with CEFE to harness the awareness and creativity of my community to comment on our Carbon Pollution Reduction Scheme green paper. This will be preceded by one of the CEFE clean energy expos that have done so much to assist individuals to take effective domestic measures.

The message from my community on climate change in the last election was loud and clear. In the Army we have a saying that goes, ‘Lead, follow or get out of the way’. My community saw a previous government that would not lead or follow and finally they told them to get out of the way. Now I am proud that in the Rudd Labor government they finally have determined and visionary national leadership, and a committed local partner as their member.

The Carbon Pollution Reduction Scheme that is now in development will also be a vital element in the government’s plan to reduce emissions without compromising the economy and with the lowest possible cost for families and businesses. It provides the market with a choice in how it chooses to meet emission targets. Allied to this massive project and policy undertaking, the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill and associated legislation will support a key element of the government’s plan to reduce emissions. The carbon capture and geological storage framework allows a power generator or gas producer to offset potential charges associated with carbon emissions. This framework allows businesses to reduce their carbon footprint whilst not compromising our coal industry, which is vital to Australia’s economic prosperity. This bill will support the Australian energy industry, which needs to remain strong in order to protect Australia from economic and strategic vulnerabilities associated with the global peak oil crisis, whilst ensuring that Australia remains committed to tackling climate change. I commend the bills to the House.