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Tuesday, 5 July 2011
Page: 7662


Mr CRAIG THOMSON (Dobell) (20:23): I rise to support the Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011 and cognate bills. Firstly, the Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011 amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to estab­lish a national offshore regulator of safety, integrity and environmental management of petroleum and greenhouse gas storage activities in Commonwealth waters. A nat­ional offshore titles administrator will also be established through amendments to this bill to administer titles in Commonwealth waters.

This is the principal bill in a package of complementary amendment bills. This bill will largely implement the government response to the 2009 Productivity Comm­ission Review of Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector. The principal recommendation of the Productivity Commission to reduce unne­cessary burden on the industry was the establishment of a national offshore petrol­eum regulator.

The report of the Montara Commission of Inquiry of June 2010 recommended, amongst other things, that the proposal to establish a national offshore petroleum regulator should be pursued at a minimum. The Montara commission specifically recommended the establishment of a single, independent regul­atory body looking after safety as a primary objective in addition to well-integrated and environmental management. The 2008 Varanus Island pipeline explosion and the 2009 Montara oil and gas blowout high­lighted the need for improvement in the regulatory regime to be robust and seamless. The existing regulatory arrangements are complex and disjointed and involve incon­sistent administration, including regulatory duplication across governments. These inadequacies largely stem from the risk of regulatory gaps arising from the regulation of safety and integrity being separate from the regulation of environment and the day-to-day operations. Maintaining the current arrangements is not a credible option in light of the Productivity Commission review and the report of the Montara Commission of Inquiry.

It is interesting that, while the shadow spokesman on this issue gave 20 minutes of praise for this legislation, the recalcitrant nature of the Western Australian government has committed the opposition to opposing this legislation. When you look at the merits of what the legislation is trying to do, it is a great shame that the opposition have taken this position. But it should not come as any surprise to anyone here that the opposition when in any doubt go for the negative, go for the no. It is in their DNA in this parliament that they are still going to oppose in the end even legislation that they spend 20 minutes praising. It is a real indictment of where the opposition is in this parliament at the moment.

In 2009, the Productivity Commission identified a significant unnecessary regul­atory burden on the industry. The system is burdensome, slow and lacks consistency across jurisdictions. Currently, the Common­wealth government has responsibility for petroleum operations in offshore areas beyond three nautical miles; however, the day-to-day regulation is undertaken by the designated authority in each state and the Northern Territory. The system requires seven separate designated authority regulat­ors for Commonwealth waters around Australia, resulting in inefficiency in regulation. With the reforms contained in this package of legislative amendments, the government is replacing the seven designated authorities with an integrated regulatory system, promoting consistency and efficiency across Commonwealth waters.

The administration of titles will be centralised in the new National Offshore Petroleum Titles Administrator, which will replace the designated authority system currently in place for Commonwealth waters. However, the joint authority, which compr­ises the Commonwealth minister and the relevant state or Northern Territory minister, will be retained as the decision maker for key petroleum title decisions. Retaining the joint authorities for petroleum titles ensures that each state and the Northern Territory continue to have a role in decision making on key petroleum projects in Commonwealth waters that could impact the individual state or territory. NOPTA will make recomm­endations to the joint authorities on key title decisions as well as administer titles and collect data relating to petroleum and greenhouse gas storage activities in Com­monwealth waters. As is currently the case, the view of the responsible Commonwealth minister will prevail in the event of a disagreement. The Commonwealth minister will also remain the decision maker for greenhouse gas storage titles. States and the Northern Territory will have an option to confer their administrative powers in their coastal waters on NOPTA.

The existing National Offshore Petroleum Safety Authority's functions are to be increased to complement their expanded responsibility for a well-integrated regulation which this parliament passed last year. A single national offshore petroleum regulator will ensure only one agency regulates the safety of Australia's offshore petroleum workers and the environment, from the exploration through to the decommissioning. Safety, environment protection and day-to-day operational consents are all concerned with integrity and it is essential that they be regulated in an integrated manner. The expanded authority will be known as the National Offshore Petroleum Safety and Environmental Management Authority. In developing these reforms the Australian government has undertaken significant stakeholder consultation over the last 15 months with the states and the Northern Territory as well as with NOPSA and the industry. As is currently the case with NOPSA, both NOPTA and NOPSEMA will be based in Perth, which is convenient for the oil and gas industry, and will operate on a full cost-recovery basis. This approach is consistent with the Australian government's policy on cost recovery and will help ensure minimal cost and regulatory burdens to the industry. These cost-recovery arrangements will be reviewed regularly in consultation with the industry. The establishment costs of NOPTA and NOPSEMA will also be cost recovered through the existing registration fees paid by the industry on transfers and dealings of offshore titles. Once the estab­lishment costs of NOPSEMA and NOPTA are fully recovered—currently expected in 2013—these fees will be scrapped, represen­ting a significant cost saving for the industry.

Additionally, these reforms also deliver on the government's commitment to the Council of Australian Governments reform priorities. COAG's National Partnership Agreement to Deliver a Seamless National Economy incl­udes milestones to implement the agreed Productivity Commission recommendations and remove unnecessary burdens on indust­ry.

The offshore oil and gas industry is vital to sustaining our country's economic prosperity and security. Passing this bill, together with the other complementary bills, will help deliver on the government's com­mitment to ensuring the Australian com­munity's confidence in the regulation of the offshore petroleum industry by ensuring operating standards are the best and safest in the world. The reforms put forward through these bills will help streamline Australia's regulatory system, ensuring Australia's cont­inuing competitive advantage in securing the necessary investment in Australia's offshore oil and gas industry to develop our resources for all Australians.

Let me go through the main points of the Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011. This bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to establish a single national regulator for offshore safety, well integrity and environmental approvals and a national titles administrator for offshore petroleum, mining and greenhouse gas storage activities. This model reflects the recommendations of the 2009 Productivity Commission review and the Montara Commission of Inquiry's recommendations, as well as 18 months of consultation with industry, states and the Northern Territory.

Safety, environmental protection and day-to-day operational consents are all concerned with integrity and it is essential that they be regulated in an integrated manner. The existing National Offshore Petroleum Safety Authority's functions are to be increased to complement its expanded responsibility for well integrity regulation, which this parl­iament passed last year. A single national offshore petroleum regulator will ensure only one agency regulates the safety of Australia's offshore petroleum workers and the environ­ment, from exploration through to decommissioning. To this end the existing independent National Offshore Petroleum Safety Authority will be expanded to become the National Offshore Petroleum Safety and Environmental Management Authority.

The bill will also establish a single national body for the administration of title in Commonwealth waters to be known as the National Offshore Petroleum Titles Adm­inistrator. Under the new system the administration of titles will be centralised in the new National Offshore Petroleum Titles Administrator, replacing the designated authority system currently in place and promoting consistency and efficiency across Commonwealth waters. Retaining the joint authorities for petroleum titles ensures that the states and the Northern Territory continue to have a role in decision making. As is currently the case, the responsible Commonwealth minister's view would prevail in the event of a disagreement.

Additionally, these reforms also deliver on the government's commitment to the Council of Australian Governments reform priorities. COAG's National Partnership Agreement to Deliver a Seamless National Economy incl­udes these milestones. The offshore oil and gas industry is vital and this legislation makes sure that we continue to provide support and improve the regulations that are there so that it can continue to be a powerhouse for the Australian economy.

These are very important pieces of legislation. It is a great shame that we have the opposition agreeing in principle to what is contained in the regulations and going to great lengths to point out their role in the consultation, but refusing to agree to the bill because of timing issues with regard to Western Australia. It is typical of those opposite that, wherever they can grasp a negative out of a positive, they will do so. It is very disappointing that, with what should have been a bipartisan position in relation to making sure this industry operates better, we again have the opposition going to their usual negative position. It is very disappointing in relation to this industry. I commend these bills to the House.