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Monday, 21 March 2011
Page: 2475


Ms O’NEILL (6:12 PM) —I am very pleased to speak today to the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Bill 2011 and related bill which will ensure safer petroleum and gas operations off our coastline. For those members of the Australian public who are listening and might have cause to be a little alarmed by some of the comments of the member for Groom, let me just put on the record a contrasting and more accurate view about a carbon price and its impact on this industry. The Prime Minister has made it very clear, unlike the indications we have just heard from the member for Groom, that putting a price on carbon, and our plans for that, will make sure that polluters will pay. The Prime Minister made it very clear. I note that the member for Groom was talking about the need for certainty. There is certainty in our position. By making the polluters pay and gathering those dollars, the government has plans to make sure that the money goes to three very important elements: firstly, to generous assistance for households; secondly, to support businesses to transition to sustainable practices in a clean energy economy to keep jobs in those critical industries; and, thirdly, every cent that is raised from making the polluters pay will go to climate change programs that will engage young Australians in looking at innovative ways to change our practices with regard to our carbon impact on our environment.

In contrast, in such important industries as our minerals, coal and gas industries, claims for certainty cannot be guaranteed in any way by those from the opposition who one day are climate change deniers and the next day are its proponents, depending on the context of the conversation. To demonstrate that we all know that Mr Abbott is a climate change denier, his policy is complete nonsense. Despite his best efforts to convince people that he really does accept the climate science, we know that he has not changed his view and that he has always talked about climate change as being ‘crap’. The uncertainty of this flip-flopping from one position to another is exactly in opposition to certainty, the importance of which the member for Groom has indicated.

Having cleared that up a little, to make sure listeners have no misunderstanding about the importance of our agreement on this element of the bill, I would like to move forward and talk to the bills in question: the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Bill 2011 and the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies (Consequential Amendments) Bill 2011. Put simply, these bills impose levies on offshore petroleum titleholders to recover the operational costs for the augmented safety regime carried out by NOPSA, the National Offshore Petroleum Safety Authority.

The new levies include three elements: a new well investigation levy, an annual well levy and a well activity levy. What can one say but ‘Well, well, well’? I think the usual rejoinder of British bobbies in comedies of a certain area was, ‘Well, well, well—what have we here then?’ To stretch the metaphor a little further, what we have here is a means for the safety regulator, NOPSA, to marshal sufficient resources to effectively perform the augmented integrity and regulatory functions that were granted by the parliament last year.

By way of background, the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act currently imposes safety related levies relating to offshore petroleum and greenhouse gas facilities which are payable by the operator. At the moment, though, these safety related levies do not extend to NOPSA’s well related regulatory functions and powers. Importantly, the new and revised provisions place obligations on titleholders, not facility operators. This assessment and monitoring goes to the structural integrity of wells and well operations for the life of the well. The safety benefits of these measures should be pretty obvious. They are essential for NOPSA to effectively and fully do its job of determining the integrity and safety of wells and minimising risks to people at or near those wells.

This is particularly important in light of the issues arising from the Montara oil spill incident in August 2009, and I am pleased to say that the member for Groom gave a very fair representation of Australia’s general deep concern about the impact on the environment of that spill. As commissioner David Borthwick noted in his report of the Montara Commission of Inquiry in June last year, the magnitude of the blow-out from the Montara wellhead platform was one that Australia had not seen the like of in 20 years. While the risks of such an incident are low, the results could have been catastrophic—and the government have taken that on board. I note that the commission of inquiry recommended enforcing requirements of the Offshore Petroleum and Greenhouse Gas Storage Act and the regulations as they relate to well integrity, and clearly we are following through.

There are a couple of noteworthy aspects of these levies that I should mention. A well investigation levy is only imposed on petroleum titleholders where the reasonable costs incurred by NOPSA in conducting an inspection into a breach or suspected breach of the OPGGS Act exceed $30,000. That threshold is high and it reflects the purpose of imposing the well investigation levy separately from the annual well levy and the well activity levy. The imposition of the well investigation levy, coupled with it being triggered by a threshold, is to avoid an unacceptable level of cross-subsidisation between titleholders whose activities require a high level of investigatory activity by NOPSA and those whose activities do not require such a level of activity.

As a result of the measures, consequential amendments to the OPGGS Act are required to enable the effective calculation and collection of the new well levies. The amendments provide that the new levies become due and payable at a time specified in the regulations. In addition, the amendments ensure that each of the well related levies payable under the regulatory levies act are credited to the national offshore petroleum safety account.

The consequential amendments we are debating here today also provide for a late payment penalty to be payable by a titleholder where one of these new levies imposed on the titleholder remains wholly or partly unpaid after the day it becomes due and payable. This penalty is naturally designed to encourage and ensure that levies are paid on time. Given the importance of NOPSA’s function in regulating safety and integrity matters for the offshore oil and gas industry and the fact that it is funded through levies, it is critical that the industry pays these levies in a timely fashion.

Separately, the government is working on a proposal to establish a national offshore petroleum safety and environmental management authority, NOPSEMA, and a national offshore petroleum titles administrator, NOPTA, by 1 January next year. I am advised that the minister is looking to introduce amendments to the act to establish these two new bodies in the first half of this year. I look forward to speaking to the debate when that legislation comes before the House. In the meantime, I commend these bills to the House.