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Wednesday, 17 September 2008
Page: 7781


Mr GRAY (Parliamentary Secretary for Regional Development and Northern Australia) (7:18 PM) —I rise to support theOffshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, which establishes the carbon capture and storage framework, the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 and the Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008. All of these bills create a legal and regulatory industry framework to operate an environment whereby carbon and other greenhouse gases may be captured and stored below the surface of the ground under the sea in Commonwealth waters. It sets up a process for creating titles for pipelines and the storage and geosequestration of greenhouse gases—gases that might be removed from source or removed from the flue of an industrial facility.

Let me explain what that means. Australia is endowed with massive natural resources. One of the most significant natural resources which Australia has is gas. It is mainly found off the north coast of Western Australia and off the south-east corner of Australia. These reserves often contain large components of carbon dioxide, sometimes as low as four per cent, as in the case of the North West Shelf, and sometimes as high as 32 per cent. So there is carbon dioxide that is in situ below the surface of the earth that is brought out with oil and gas as it is brought to shore for processing. The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 presumes the capacity to take carbon dioxide and other greenhouse gases, recirculate them back out to sea and then pump them under pressure back down under the surface of the earth where they can be safely stored in massive volumes for geological time. It is a creative solution, it is an engineering solution and it is a solution to a pollution problem which is about adapting our economy and our manufacturing and industrial processes to the realities of our modern environment. There is a current debate—it has been taking place for 20 years—about climate change and its origins. Almost 20 years ago I was stupid enough to describe climate change as ‘pop science’. I was wrong. Climate change is real. It is also the case that our national response to climate change is at a number of levels. The level that this bill and its three associated bills addresses is how a modern, wealthy economy can continue to produce wealth while at the same time ensuring that emissions to the air, soil and water are kept as low as possible. Industry supports this sort of stuff. It supports it because it is good practice. It supports it because it is a good engineering solution. It supports it because increasingly the communities that live near and who are employed in the hydrocarbons industry require the cleanest possible standards of that industry.

It was in about 2002 that the massive Gorgon Project in Western Australia presented a field development plan which included geosequestration. This was the first time ever in Australia that a company had proposed to remove carbon dioxide from the gas stream as it came from below the surface of the sea and lock it up underneath the surface of the earth in a geological formation that was safe. The Chevron Corporation, the American oil company that led that joint venture and still does, took this decision because it understood the very high environmental standards which are sought by our society and which can be achieved by our engineering standards and which are also affordable. At the time, I recall looking at that project and seeing a costing for geosequestration that was, in dollar figures, in the low 20s a tonne. So we had on that occasion a company voluntarily offering to geosequester its CO2 in what at that stage was a world-first piece of engineering.

It should be noted by now that there are several very large commercially-operating geosequestration processes around the world. One of the most significant is operated in Norway by Statoil. Statoil runs several facilities at Snohvit and the Sleipner facility which geosequester CO2 from various sources. We also know that in Canada and Algeria there are significant commercially-operating CO2 geosequestration facilities. So our legislative process in Australia meets an engineering and hydrocarbons world that is prepared for the challenge of ensuring that these gases, about which there is significant community concern, can be locked away and preserved under the surface of the earth, never to bother the earth’s climate or our civilisation ever again. It is a tremendous solution. It is a solution that was being found commercially. This legislation was originally pursued by the former government. Many of the early considerations for technological solutions, a legislative framework and a regulatory framework to support geosequestration were supported by the former government and, in particular, by the former Minister for Industry, Tourism and Resources, Mr Ian Macfarlane. His work is significant and should be acknowledged.

In Western Australia, where there are significant energy resources that are yet to be unlocked to fuel the raging economies in China, Korea and Japan, there is a massive amount of research taking place into how to best capture CO2 and how to best store it. That research is being carried out at various institutions, but some of the most interesting research is taking place at Curtin University of Technology. At Curtin university, technology was created to freeze gas in order to drop the CO2 out of the commercially available methane gas. It is a technology that we have seen before: it creates a substance called a hydrate. We have known of hydrates in the hydrocarbons industry for some significant period of time. Not so long ago, a massive offshore oil explosion took place in the North Sea at the Piper Alpha facility because a hydrates block in a pipe caused a build-up of pressure, an explosion and a massive fire, and many deaths. That same technology today can be used to capture CO2 and to drop it out of a production process where it can then be regassed and stored.

As I say, Western Australia is a leader in this field. In my own electorate of Brand, Alcoa, the aluminium company, has been sequestering CO2 in mud lakes for the last few years. CO2 is taken out of a gas stream that is created by supporting industries around the Kwinana strip and is piped to a mud lake and then, in a chemical reaction, bonds with the substances in that mud lake. This changes the alkalinity of the mud, making it available for another production process. But most importantly, as we speak here today, 70,000 tonnes per annum of CO2 are locked away in this fashion.

We have excellent research, we have the first step into a regulatory regime that is understood and supported by the hydrocarbon industry and we have a known technology that can lead us into the future and help Australia build an industry which is clean, is able to fuel economies in our region, is able to create great jobs—young people these days love the idea of being recruited to work in an industry which is safe, clean, environmentally sensitive and responsive—and, most importantly in this context, is supplying a fuel which, when used in the economies of China, Japan or Korea, burns in a clean way, thereby removing carbon intensive fuels from the economies where this fuel is being consumed. It is a great process, it is a great piece of technology and it is a piece of technology that has application for static energy generation in our coal industries once the technologies are better developed to capture carbon dioxide from flue pipes. It is also a technology that is able to be replicated over and over again wherever we find massive emissions of CO2 which we wish to take from the environment.

You do not have to be a person concerned about climate change to support these technologies. You do not have to be a person convinced that the earth’s climate is changing as a consequence of human industrial activity to support these initiatives. It happens to be good business, it happens to be good environmental management and it happens to be something which industry supports and our community demands. If we are to be successful in unlocking the massive opportunity available to our nation through the oil and gas industry and through energy generation, this technology and these solutions point the way to the future. I commend the bills to the House.

Debate interrupted.