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Wednesday, 17 September 2008
Page: 7776


Mr ZAPPIA (6:58 PM) —I too rise to speak in support of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and associated bills. Before I proceed with my main remarks, I add my congratulations and commendations to the member for Lyons and the committee that worked with him in going through this bill and reporting back to parliament. I will speak later on about some of the recommendations, but I believe their work has contributed to what is a very fair and balanced bill.

This bill, as the Minister for Resources and Energy and others have said, will establish the world’s first framework for carbon capture and geological storage and establish a new range of offshore titles providing for transportation by pipeline and injection and storage in geological formations of carbon dioxide and potentially other greenhouse gases. Australia has the capacity to inject and store a substantial amount of its carbon emissions in offshore reservoirs. Geological surveys reveal that storage formations in offshore waters, accessible by this framework, have the potential to securely store hundreds of millions of tonnes of carbon dioxide for many thousands of years. The types of geological formations which have stored oil, gas and carbon dioxide for millions of years are similar to the storage formations proposed for greenhouse gas storage.

Carbon capture and geological storage are vital for the long-term sustainability of coal-fired electricity generation and to realise the potential of new industries such as coal to liquids, which could improve Australia’s liquid transport fuel security. Nearly 80 per cent of Australia’s electricity is generated from coal, and so no serious response to climate change can ignore the need to clean up our coal. The establishment of a carbon capture and geological storage framework represents a major step towards making low-emissions coal a reality. As other speakers have said, the coal industry is highly significant not only to Australia’s prosperity but also to the world’s current and forecast energy supply. Coal provides almost 80 per cent of Australia’s electricity generation capacity and 40 per cent of world electricity needs. While coal’s share of future power generation in Australia will decline in favour of renewable energy and less greenhouse intensive fossil fuels such as gas, coal will continue to provide much of Australia’s electricity generation requirements well into the future.

Carbon capture and geological storage offer potential for Australia to reduce its greenhouse gas emissions while maintaining its international competitiveness through its competitive advantage of low-cost and abundant fossil fuels such as coal and gas. It is one of the suite of technologies Australia is considering to meet its future greenhouse objectives. The International Energy Agency, which monitors and forecasts global energy supply and demand, supports this view, estimating that the world’s future energy needs will be met largely by fossil fuels and forecasting that coal will provide nearly 44 per cent of world electricity requirements in the year 2030. That is an increase on its current share. Therefore, it is critical that domestic and international greenhouse gas abatement solutions include policies that support the development and deployment of low-emission coal technologies.

Australia is the world’s largest coal exporter, and coal remains Australia’s largest export commodity, generating $24 billion of income in the year 2005-06. The coal industry supports many rural and regional communities, employing about 30,000 people. Low-cost coal supports Australia’s high living standards and remains the foundation for Australia’s energy-intensive industries. The success of carbon capture and geological storage technology will guarantee the long-term future of the coal power industry and the job security for power industry workers. I heard a number of other speakers in this debate make reference to the importance of the coal industry in their local communities and I certainly endorse the remarks that they have made and recognise, as I have already said, that the coal industry is important to the economy of Australia. But in specific locations in Australia it is incredibly important and probably sustains many communities where the communities have essentially evolved from their coal industry.

The government recognises that new clean energy technologies including both fossil fuels and renewable energy sources are the key to a sustainable climate change solution. As Professor Garnaut and the government have noted, it is in Australia’s national interest to ensure atmospheric greenhouse gas concentrations are stabilised at the lowest possible level. Even a two per cent increase in global temperature above preindustrial levels is risky and would severely impact Australia, its neighbours and key trading partners in the region. Based on the latest science from the CSIRO and scientific experts commissioned by the Garnaut climate change review, if current emission trends continue, unmitigated climate change is likely to have catastrophic global impacts. Under this scenario, current estimates suggest that the world’s coral reefs would be lost and irreversible melting of the world’s great icesheets would lock in several metres of sea level rise. There is also a very high risk that many forests, grasslands and other natural sinks—or carbon stores, as they are sometimes referred to—will through stress, fire and desertification become huge new sources of emissions. In Australia, irrigated agriculture production in the Murray-Darling Basin would all but disappear, 2,700 additional temperature related deaths are projected annually and the Great Barrier Reef would suffer catastrophic impacts.

Stabilising greenhouse gas concentrations at acceptable levels of somewhere around 450 parts per million needs a global response. Industrialised countries as a group need to reduce emissions by 25 to 40 per cent below 1990 levels by the year 2020. A 440 parts per million emissions target would substantially reduce the risk of large-scale global and Australian impacts. If we were to choose to stabilise greenhouse gases at high concentrations of around 550 parts per million we would leave future generations a legacy of high climate risks. Greenhouse gas concentrations at this level would mean about an 80 per cent chance of exceeding the two degrees centigrade increase in global temperatures. The world’s coral reefs would be unable to carry out important functions such as maintaining biodiversity and protecting coastlines, and there would be up to a 40 per cent chance of initiating irreversible melting of the Greenland icesheet. There would also be a 50 to 95 per cent chance of exceeding the estimated lower threshold above which land based carbon sinks could become carbon sources and push climate change out of control. For example, this could mean the temperatures rising to a point high enough to cause the collapse of Amazon rainforest, traditionally a carbon sink, which would then unleash billions of tonnes of carbon into the atmosphere, speeding up global warming.

Only yesterday I was presented with a briefing in respect of the impact on natural vegetation and natural forests of absorbing carbon dioxide from the air. It appears from the latest reports that the amount of carbon dioxide absorbed by these natural forests, like those in the Amazon, is far greater than we ever allowed for. Therefore, the damage that we are doing and might do to forests in the future will exacerbate what is already a serious situation.

One only has to look at the impact of climate change on Australia in recent years. Australia’s high vulnerability to climate change among developed countries is largely due to the dryness of the continent, the proximity of major population centres to the coast and our unique and highly adapted natural ecosystems. Australia’s climate has been changing over the last century. For example, overall temperatures have increased and recent droughts have been hotter than average and the southern and eastern regions of the country have seen declines in rainfall. The 2002-03 droughts wiped out an entire percentage point of Australia’s gross domestic product, worth the equivalent of US$7.6 billion, as well as reducing agricultural employment, mainly in rural and regional areas, by about 100,000 people. The impact of the drought was also felt outside rural Australia. Food prices increased, on average, by 4.4 per cent over 2002-03, compared with a general increase in the CPI of 2.7 per cent.

The centrepiece of the government’s climate change policy is its commitment to establishing a Carbon Pollution Reduction Scheme by 2010. Other speakers have also made reference to this scheme. The scheme will establish a forward price for carbon within the Australian economy. Placing a cost on carbon will encourage industry to develop and deploy low-emission technologies over time.

In addition, the government has established a $500 million National Low Emissions Coal Fund to support the National Low Emissions Coal Initiative and deliver breakthroughs in clean coal technologies, of which carbon capture and geological storage is a key part. The National Low Emissions Coal Initiative is being matched by the coal industry’s COAL21 initiative. The industry has set up a $1 billion fund to support clean coal projects to combat climate change and reduce our emissions.

This bill will enable Australia to get on with the development of clean coal by enabling the carbon dioxide extracted from coal to be safely stored in Australia in suitable offshore locations. This is a complex bill which will affect billions of dollars of investments in Australia, our environment and future investments. Quite rightly, it has been the subject of intense scrutiny by state governments, by private enterprise, by non-government organisations and even a committee of this parliament, the committee I referred to earlier and which the member for Lyons chaired. In framing the bill, the Minister for Resources and Energy has listened to the diverse views and has proposed what I believe is a fair and balanced federal government response to a matter that requires immediate attention.

It is interesting to note that in Canada, Poland, Norway and Algeria carbon dioxide injection projects are already underway for a range of applications. It is also worth noting that the South Australian, Victorian and Queensland governments have their own legislation either in place or underway with respect to carbon capture and storage in onshore locations or areas under state care and control. In addition, a number of sites have been identified in Victoria, Western Australia and southern and Central Queensland which are high-carbon emission areas which have adequate storage capacity onshore.

Returning to the report of the House of Representatives Standing Committee on Primary Industries and Resources on this matter, which was tabled on 1 September, the government has—as other speakers have rightly pointed out—adopted 17 of the 19 recommendations. The recommendation relating to the government taking over responsibility for long-term liability was rejected by the government, and I believe rightfully so. That was probably the most contentious recommendation that was not accepted by the government. It is my view, and obviously the minister supported this view because the recommendation was not accepted, that the government should not accept long-term responsibility for long-term liability where carbon gas is injected underground. It is the responsibility of the proponents and those who own the site.

If, however, because of regulation and laws under which the process is carried out there is some level of government responsibility then obviously common law will apply and the government will be held accountable under whatever common law provisions exist at the time. So government responsibility is there in respect to common law, but the government should not specifically take on responsibility for what are essentially private operations. It is no different from the government taking responsibility for other private landfill operations that we see throughout Australia onshore. It is in fact a waste disposal facility. The fact that it happens to be offshore and underground in no way changes its obligations from the obligations for landfills above ground and onshore.

I also note that the bill does not allow mining and drilling in the Great Barrier Reef for geosequestration purposes. Again, I commend the government for making that decision. As someone who has visited the reef and spoken about it in respect of another bill I am certainly very concerned about its future. I have already pointed out that if we do nothing and allow temperatures to increase, the loss of the Great Barrier Reef is likely to occur. We should in no way put the Great Barrier Reef at any further risk by allowing any types of activities which do that. The Great Barrier Reef is a world iconic area and is already under threat because of climate change. It should not be placed under any additional risks whatsoever associated with geosequestration activities.

It is also appropriate that at this stage only carbon dioxide can be stored in the sites approved, and other greenhouse gases will only be permitted to be stored in approved sites if the protocol to the London dumping convention is amended. It may be an option further down the track but, at this stage, the only gases that we are talking about are carbon dioxide or other carbon gases which can be stored under this process. This bill is very much linked to the government’s proposed Carbon Pollution Reduction Scheme, as other speakers have rightly pointed out.

As I said earlier in my remarks, there is an overwhelming body of scientific opinion that greenhouse gas emissions are contributing to the climate change that is occurring. It is my view that climate change, whether human initiated or not, is the greatest challenge facing our world. We have already seen many consequences of climate change. There is also a widespread view amongst the scientific community that reducing the levels of carbon dioxide in the atmosphere will slow down the global warming that has been occurring and reduce sufficiently, and perhaps even reverse, the dangerous trends that we are seeing.

The government’s Carbon Pollution Reduction Scheme, as the name implies, has the specific objective of reducing carbon emissions into the atmosphere. Extracting carbon from coal and safely storing it underground complements all other measures that may be implemented as part of the Carbon Pollution Reduction Scheme. The critics of the Carbon Pollution Reduction Scheme who are running a fear campaign about the increases in costs of living that might arise fail to acknowledge the cost to consumers of doing nothing. We have no better example to look to than the Murray-Darling system. Opposition members, when in government, did absolutely nothing about the Murray, even though there had been warnings for years that the health of the Murray was seriously declining. Those warnings have continued year in and year out for at least the last 20 to 30 years. We did nothing about it and today we are paying dearly for it. It is absolutely hypocritical of members opposite to come into this place now and demand that the Rudd government do something about the Murray and do it immediately when, for 12 years, they did absolutely nothing. It was because of their negligence that the Murray-Darling system is now in the state that it is.

This is a responsible bill which, in addition to responding to the serious issue of climate change, also presents Australia with research opportunities, intellectual capital and investment opportunities. It is not simply about adding costs to our economy and it is not simply about responding to the requirements of the Carbon Pollution Reduction Scheme; it is all about driving innovation in other areas that we need to pursue in the years to come. As a result of that, I see not only the opportunity to attract investment into this country but also an additional range of employment opportunities for Australians. It creates for Australia an entirely new industry with the economic benefits that come with it. For all of those reasons, and for the reasons that I have outlined in my address on this bill, I commend the bill to the House. I also congratulate the Minister for Resources and Energy for putting together what I believe is a very fair, balanced and responsible response to carbon capture and storage in this country. (Time expired)