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Tuesday, 5 July 2011
Page: 7671


Ms MARINO (ForrestOpposition Whip) (20:58): I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011 and related bills. I am really disappointed that the minister has brought this bill into the House before he reached agreement with the Western Australian government, when Western Australia is clearly the state that will be most affected by changes to petroleum and gas legislation. As Mr Tinapple, the Executive Director, Petroleum, of the Western Australian Department of Mines and Petroleum, stated during the Senate Economics Legislation Committee's hearing:

Western Australia has about two-thirds to three-quarters of the offshore activity in Australia. The exploration amounts and the production of gas and liquid petroleum in Western Australia make the state the largest jurisdiction by far

He went on to comment that the WA Department of Mines and Petroleum had been negotiating on how WA could work with the Commonwealth and was near to reaching an agreement on co-locating the regulators. But this has not happened yet. Mr Tinapple also expressed his disappointment that this legislation was introduced without any consultation with his department. This is unfortunately something that the Labor government seems to do on a regular basis. The coalition's dissenting report on this legislation also identified the significant impact this would have on WA. The report said:

Western Australia is the most active petroleum jurisdiction in Australia with an estimated 60 per cent of offshore activity being conducted off its coast. There are currently five LNG developments with onshore LNG processing plants at various stages of development, emphasising the fact that WA stands to be the most affected by the proposed legislation …

Yet the legislation is before us well before an agreement with the Western Australian state government. The dissenting report also mentions the concerns of the Western Aust­ralian government that under this legislation there will be no requirement for the Commonwealth to advise the WA govern­ment about the location of licences over the WA coast. The federal government's announcement of three new offshore explor­ation permits awarded in Commonwealth waters off Western Australia has further fuelled the state government's opposition to the proposal to introduce a national offshore regulator.

Western Australian Minister for Mines and Petroleum Norman Moore said the growing interest in exploration and develop­ment of the petroleum industry off the coast of Western Australia highlighted the need for the administration and regulation of petrol­eum titles to remain with the state government. The WA state government has formally requested the federal Minister for Resources and Energy, Martin Ferguson, to reconsider his national offshore petroleum regulator model to reform offshore petroleum regulation in Australia. In January this year Mr Moore said:

WA's proposal for the introduction of a National Compliance Auditor would achieve improved regulation and maintain all key parts of the current regulatory system.

Mr Moore went on:

This option would not only benefit WA, the largest jurisdiction for offshore petroleum activity, but strengthen the oversight role of the Federal Government.

Such a model would ensure that any delays, gaps or duplication in regulation processes were quickly identified and resolved with appropriate resources, while also maintaining the advantage of the current extensive local knowledge, workable and timely processes, and the existing skills base, without disruption.

This option recognises the need to boost safety standards in the offshore petroleum industry and the regulatory role of Government, and supports the significant reform of State and Commonwealth areas that is already taking place in Western Australia by the Department of Mines and Petroleum.

The minister criticised the recommendation by the Productivity Commission in its report on the regulation of upstream petroleum activities to create a national offshore regulator, saying it was flawed. He said:

The proposed national regulator is unlikely to provide any benefit to Australia, Western Australia or the offshore petroleum sector, even in the long term, as it will not solve the complex, cross jurisdictional boundary issues or the complexity relating to environmental and native title issues.

Mr Moore said the alternative model could be achieved without any disruption to or reduction of service level of regulation of offshore projects in WA. He said the current practice of mirroring Commonwealth and state petroleum legislation would continue to provide similar legislative frameworks across jurisdictions, and the current coop­erative approach could continue to deliver more timely outcomes. The minister said:

The Western Australian Government does not support the introduction of a national offshore petroleum regulator, and maintains that the administration and regulation of petroleum titles should remain with the State.

Western Australia's industry still has decades of lucrative years ahead of it, and we need to play a major role in realising these benefits for the people of this State.

This is a further example of the Federal Government grabbing WA's decision making powers and building costly, less efficient bureaucracies in Canberra.

We in this parliament should not undere­stimate the value of these industries. The resources sector is clearly a driving force in the Western Australian and Australian economies. The state accounts for 62 per cent of Australia's mineral production excluding coal, 73 per cent of our natural gas and 64 per cent of our crude oil and condensate. It has over 500 commercial mining and petroleum projects producing over 50 different products. The value of mining and petroleum production in Western Australia last year was more than $70 billion. For Australia as a whole, mining and energy exports make up nearly 70 per cent of all merchandise exports. There are around 30 international oil and gas companies and more than 40 oil and gas service companies with offices in Perth—companies such as Apache Corporation, BHP Petroleum, BP, Chevron, Conoco, Phillips, ExxonMobil, Hess Corporation, Inpex, Shell, Total and Woo­dside.

The Gorgon liquefied natural gas project, which has just gone into construction on Barrow Island off the Western Australian coast, is, at $43 billion, Australia's biggest project and the largest Chevron has ever undertaken either inside or outside America. This further translates into an investment surge in new mining and petroleum projects. While not every project will go ahead as its promoters may wish, there are around $170 billion worth of projects in the investment pipeline for Western Australia over the next five or so years.

I understand the intent of this legislation given that my electorate, because of its reliance on the gas that comes from the north-west, was one of those most affected by the Varanus gas explosion. Numerous businesses are no longer in existence as a result of the losses they sustained at that time. There were people out of work almost immediately, particularly in the forestry sector. It was an immediate effect and it was felt widely throughout my electorate. There is no doubt that the regulation of the offshore oil and gas industry is highly important to the country and that was demonstrated in this instance, particularly in Western Australia. The sheer scale and importance of Australia's oil and gas industry demonstrates the need to ensure that we get the legislation right. It is essential to not only Australia's future eco­nomic growth but also our energy supplies. We certainly need to have a very close relationship with the Western Australian government in developing the agreements and the legislation. The framework for legislation and response needs to be effective and comprehensive, but in my view it has to be agreed to by the most affected state, Western Australia.