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Wednesday, 17 September 2008
Page: 7774

Mr ADAMS (6:40 PM) —I rise to speak on the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and related bills. Like my colleague the member for Corangamite, I hope the other side of the House will give its full support to this very important bill. I commend the Minister for Resources and Energy for the work he has done in getting the bill to the House. I thank the former Minister for Industry, Tourism and Resources, the member for Groom, who has supported this bill in the debate today. I think he was also endeavouring to make something like this happen in the previous government, but he probably did not have the support he needed.

The world is certainly interested in this process and the bill that is before the parliament today. We know that coal is the world’s most dominant energy product. So, if we can produce clean coal, we can do a lot to get the greenhouse gas out of the atmosphere. Eighty per cent of Australia’s electricity needs and about 40 per cent of the world’s electricity needs are generated from burning coal. The International Energy Agency forecasts that global energy supply and demand will increase and that, by 2030, 44 per cent of the world’s energy will be generated from burning coal. To do something about this we need to deploy low-emission coal technology—and this bill gives us a legal framework to endeavour to do that. Clean coal technology is certainly coming together, and many people are very confident that we can achieve what is being aimed for. The capture of CO2 in the flumes of coal-fired power stations is being done in a good way. They believe they can find even better answers than they already have done and move to a full operation within some years.

India and China, with their great size and their expansion and their industrialisation, are using more and more coal—hence the figures I quoted earlier. I am sure that, with new technology, we will be able to help the world to capture CO2 and re-inject into the very formations from which we presently take the gas and oil that the world uses today. There is a great need for this bill. I think that need has been well established as a result of the work that has been done. Australia has coal reserves that will last another 400 years, or even more, at the present rate of usage, so we can see the need for such a bill and for the new technology that will enable us to continue to take advantage of this energy source.

Safe injection and storage of CO2 is, of course, what is important, and there is no doubt that the public must have confidence in the process. Of course, the process should be transparent so that people can have that confidence in it. I am confident that this bill and these processes will give us that. As Chair of the House of Representatives Standing Committee on Primary Industries and Resources, I brought down the report Down under: greenhouse gas storage, a review of the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill. It was an opportunity to see the great need for us to do that and also an opportunity to make recommendations that allowed us to do that. I was very pleased to say that, in—

Mr Georganas interjecting

Mr Sidebottom interjecting

Mr ADAMS —Thank you to my colleagues for acknowledging the work of the committee. In that work, we received some evidence from Dr Cook, who is head of the CO2CRC project down in the Otway Basin. He gave us evidence that they have gone out and talked to the communities down in that area, and I understand that the shire down there in western Victoria voted on the project and gave it unanimous support to go ahead. I think that level of community support shows that people are thinking about these processes and the needs that we have in dealing with climate change. I know that the bill takes this into account and that the minister has given consideration to the work that was done by the committee. I also know that the process to allow community involvement and transparency has been considered and is there and that all the data that is pulled together can be made available to communities by the regulator that is monitoring these operations.

Getting new industries up is never easy, and I guess that will be the challenge in this area. There is no doubt that the petroleum industry has the skills and the technology to store CO2, which it has done for many years in Australia and in other parts of the world. The Norwegians have had a process going for about 10 years; their operation in the Sleipner gas field in the North Sea has been very successful in capturing CO2 from a gas operation and reinjecting it back into the area where the gas came from. In looking at whether it is safe to put CO2 deep into the earth under seabeds, we should recall that CO2 at the present moment belongs to humanity; it is out there and everything that is generated in the world is being pushed out into the atmosphere. When we think that gas and oil have been held in those areas for millions of years, we know that this technology and this application of geology et cetera works. We have had enough experience. I know that, in other parts of the petroleum industry, CO2 is used to add pressure to very flat oilwells to help bring the oil up. This occurs in some wells in the US, Canada and other parts of the world. So this is something we have been doing for a long time. The petroleum industry certainly has the skills, the technology and the safety regimes to be able to play a big part in this area. I think there are great opportunities for that industry to be involved.

The bill deals with other areas as well, such as petroleum operators who are in an area where there may be no new CO2 from sources other than those wells. I know that this is dealt with in the bill. There are different areas—up in the North West Shelf and around that area—where it does not look likely that we will find coal, so we will not have a stream of CO2 coming from power stations to inject back into any basins there. But, down in the important state of Victoria, CO2 used in power generation for the Latrobe Valley will be stored in the Gippsland Basin in the Bass Strait area. That is an important area to achieve results, and it is important to pull together these industries to make sure that we are achieving what is in the public interest. The report brought down by the committee that I chaired made strong recommendations that the minister should endeavour to bring parties together to do that, and the bill should have some mechanism to that effect. The minister has picked up some of those recommendations but not quite all. There are also some mechanisms in other parts of Australia which are encouraging people to come together. We certainly hope that the commercial imperatives will assist the two different industries, being the companies with a stream of CO2 that they need to inject into a storage area and the present petroleum operators who are extracting oil and gas from their present leases under the legal situation at the present time. So the need to negotiate in good faith is a very important one, and we certainly hope that can be achieved.

Turning to other issues with the bill, it has a difference in respect of one of the key committee recommendations. The House committee recommended that government take over liability as to the CO2 after the closure of a well was concluded. That could be many years after the operation has started. The information gained from the evidence received by the committee was that the main risk in such operations would arise at the beginning of the operations, when you start injecting, and extend through the time of the first year or two, when you monitor the bloom of CO2 as it settles down into cavities. Lots of technology and monitoring processes enable you to make sure you know where the gas is. The evidence received by the committee was that the risk dissipates as the process goes on and that things will settle quite well. The committee believed that in 50 years time the company that injected the gas probably would not exist as an entity. I think that was the legal advice given to the committee. Of course, lawyers always want somebody to own something so that there is a liability.

The government has chosen to put in its bill another direction, which is that common law application will stay with the company that has injected the gas. I understand why that is so and accept that position. The only difficulty is whether that will create a hold-up to companies becoming involved in this important new industry. So common law will be the process under this proposed act and will drive what becomes the legal position after the closure of a well.

I think the bill deals with the issues that it needs to deal with. As I said, there is the enormous importance of the storage of CO2 to meet the obligations that the country is undertaking with emissions trading; otherwise the cost to us will be well above what we can afford. We need to keep coal as an energy source. We need to make sure that we look after the thousands of jobs that exist in that industry. As other industries gain technologies, maybe renewables will one day meet bulk load needs, but at this stage there is certainly no evidence of and no opportunities for those renewables to meet those. All of them—from wind to solar to wave power, which is starting to emerge—certainly play a role but they are still small players when you consider the overall energy figures for the world and Australia. I know that in my own state of Tasmania, which has hydropower, the energy that we now receive from wind makes it is an important source and player. It fits in with our hydroenergy in a very good way. When the wind stops, the water starts, so we have a very good link. I look forward to the government’s continuing action in increasing its renewable energy targets, which will assist us to get more wind farms in place.

So this bill, part of the carbon capture and storage package of legislation, is an important piece of legislation. I congratulate the minister, for the work that he has done, and all the people who have been involved, including those in industry and the CRC, in that work. The science that is going on to meet the challenges is important. This is a big thing for our country, and the public interest is of great importance, so I commend this bill to the House. I certainly hope that it will pass through the Senate without too many difficulties.