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Wednesday, 9 September 2009
Page: 9174

Mr MARTIN FERGUSON (Minister for Resources and Energy and Minister for Tourism) (11:52 AM) —in reply—Firstly, I would like to express my appreciation of members on both sides of the House for their constructive contributions to the debate on this bill, the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009, which is highly technical in nature. As members have detailed to the House, the bill seeks to make minor policy and technical amendments and, importantly, reduce the regulatory burden on the offshore petroleum industry—a key sector of the Australian economy—as well as streamline and clarify administrative processes. The amendments also remove ambiguities and make some minor technical corrections. Before going to some of these issues, I would like to touch on a range of issues discussed by members during their contributions to the debate.

In this House, unlike the other house, there is broad support for carbon capture and storage. That is because I think it is appreciated that, whilst there are differences between the government and the opposition on how we put a price on carbon in place, it is understood that technology created the problem and it will be technology that provides the solution. Carbon capture and storage is the intent of the legislation before the House. It clearly represents a major challenge in the same way in which other parts of the government’s clean energy strategy represent a major challenge.

The government is not putting all its eggs in one basket. We have to invest in a wide-ranging basket of technological breakthroughs for the purposes of moving to a low-emission economy. Central to that is not only carbon capture and storage, which is part of our broad-ranging clean energy strategy, but also, for example, our Solar Flagships program aimed at achieving potentially the biggest investment in solar energy in the world. Clearly, our objective through that program and also the introduction of a renewable energy target side by side with our renewable energy program is to make a breakthrough on what is best described as reliable baseload energy. That effectively means, in the renewables sector: solar thermal, potentially geothermal, perhaps biomass in some areas or, alternatively, a breakthrough on wave power.

So I simply say that from the Australian government’s point of view we understand that there is a huge challenge ahead of the Australian community, but it is also our responsibility as a well-endowed community to invest in solving not only our own problems but also the problems of the global community because we are a major exporter of coal. I therefore complement the Prime Minister for the establishment of the Global Carbon Capture and Storage Institute, which is well supported by a range of nations and, importantly, well supported by industry.

The bill before the House to which I will seek to move amendments is about putting in place a regulatory framework that creates an opportunity for investment in carbon capture and storage in Australia. There was some criticism from the opposition about the cost of these programs and that potentially more money is required. Of course we would all love to be able to devote more money to technological change, but I remind the House that we are in the middle of a global financial crisis. Whilst the clean energy strategy and the potential investment in technology is part of our response to that, so was our requirement to assist in stimulating the economy through support for people on fixed incomes and families and our requirement to invest in infrastructure, including schools programs and road and rail networks around Australia. At least I can say that there is now a real financial contribution by government, in association with the private sector, with respect to the need to take this technology debate forward.

Putting that aside, I acknowledge the good support for the bill and the amendments, which I have discussed with the member for Groom, from the opposition’s perspective, as the opposition’s shadow minister. I also note the supporting remarks by the member for Hasluck and the support for the government’s action in releasing a retention lease discussion paper, which is underlined by the concept of ‘use it or lose it’, which gives a very strong message to some international petroleum companies that we are not going to have our resources warehoused whilst they develop resources in other places throughout the global community.

The member for O’Connor interestingly raised a question going to the safety provisions concerning negligence and their reference to ‘absolute liability’. Can I say in response to the member for O’Connor, who has always had a detailed interest in the petroleum industry, that the bill provides that the fault element that applies to the conduct and result elements of these offence provisions is negligence. Further, these provisions provide a regulatory regime that is enforceable and is consistent with fault elements of the Occupational Health and Safety Act 1991. The penalties set out for these offences do not change under these amendments and are themselves consistent with the Occupational Health and Safety Act and other Commonwealth legislation such as the Therapeutic Goods Act 1989. I ask him to consider that response because he did raise a genuine issue.

There was good support for the thrust of the legislation from the members for Werriwa, Flinders, Solomon, Canning and Corangamite. I also acknowledge the support for the bill from the member for Gippsland. I had the opportunity recently to attend the 40th anniversary of the petroleum industry in the Latrobe Valley, a highly successful industry with a terrific safety record.

In terms of the Latrobe Valley, if we make the necessary breakthrough in the development of CCS from a technological point of view—and I know this is an issue of concern to the community at the moment—the Latrobe Valley could potentially have a very, very bright future. The reason is that considering the issue of carbon capture and storage—and the government recently released potential leases for storage offshore in the Bass Strait—goes to the proximity of the Latrobe Valley to those storage areas offshore and the shorter distances for the purposes of the construction of the necessary pipeline infrastructure. One should remember that, in terms of potential storage, you also need to put in place necessary investment in pipeline infrastructure. The Latrobe Valley, whilst it represents a significant opportunity from a brown coal point of view, is also well placed in its proximity to storage areas to have a very bright future, provided that we make the necessary breakthrough on carbon capture and storage, and I am confident that we will.

I also listened with interest to the support for the legislation of the member for Lyons, who is Chair of the House of Representatives Standing Committee on Primary Industries and Resources. Not only do I appreciate his support; I also well understand his desire from a committee point of view for ministers to refer further bills to the House committee structure for proper consideration and amendment. I have a view that all too often the House has deferred to the Senate in the consideration of legislation. It is time that we again seize our responsibilities in terms of real work through our own committee structure not only on the legislation that is currently before the House but also on a range of other legislative proposals.

The member for Maribyrnong correctly raised a detailed consideration of the importance of occupational health and safety in this industry not only in Australia but also internationally. I am pleased to say that historically we have had an extremely good health and safety regime in Australia, but one can never be complacent. That will take me in due course to some amendments to this bill before the House later today.

I also give notice that during the committee stage I will be introducing government amendments to the bill which will address recently identified oversights in the greenhouse gas storage provisions of the act. The purpose of the amendments is to correct an oversight in the provisions establishing a process for enabling the responsible Commonwealth minister to give a direction to the designated authority with respect to the exercise of the designated authority’s powers to approve and register transfers of and dealings in petroleum titles.

I also give notice that during the committee stage—and I must say that I have discussed these with the shadow minister for resources and energy, the member for Groom, and I appreciate the opposition’s support—I will be introducing government amendments to the bill which will provide for a standing power enabling the responsible minister to appoint a commissioner to undertake a commission of inquiry into the operational, human and regulatory matters specific or incidental to a significant offshore petroleum or greenhouse gas storage incident. This power is limited to where a significant offshore petroleum or greenhouse gas incident has occurred and where it would be appropriate to consider operational, human and/or regulatory issues related to the incident.

The purpose of these amendments is to correct an administrative gap in the provisions of the act for the investigation of these matters. Recent incidents involving uncontrolled release of hydrocarbons jeopardising human and environmental health and essential infrastructure have demonstrated that the existing investigatory powers are insufficient. An inquiry for the purpose of determining operational, human and regulatory factors would inform regulators and operators of causal factors contributing to significant incidents relating to offshore oil and gas exploration, development, production, greenhouse gas storage and/or decommissioning. This power will enable the government and industry to learn from incidents and be better prepared to prevent similar incidents occurring in the future.

I thank members for their support and their thoughtful contributions to what is a complex debate. In doing so, I commend this bill to the House.

Question agreed to.

Bill read a second time.