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Wednesday, 14 September 2011
Page: 6115


Senator MARK BISHOP (Western Australia) (17:20): When I was last address­ing the legislation before the chair, the Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011 and related bills, we were making the point that the legislation had a number of objectives. I concluded my discussion on the first objective. Secondly, the legislation seeks to establish a single national body for the administration of title in Commonwealth waters. It will be known as the National Offshore Petroleum Titles Administrator, NOPTA.

Under the new system the administration of titles will be centralised, replacing the designated authority system currently in place. The result is that there will be consist­ency and efficiency across Commonwealth waters. It should be noted, however, that the joint authority, comprising the Common­wealth minister and the relevant state or territory minister, will be retained. This will ensure the joint authority remains the decision maker for key petroleum title decisions. There is a continuing role for ministers in decision making on petroleum projects that could impact upon their state or territory. In effect, NOPTA will make reco­mmendations to the joint authorities on key title decisions. It will also administer titles and collect data relating to petroleum and greenhouse gas storage activities in Commonwealth waters. As is currently the case, the responsible Commonwealth mini­ster's view would prevail in the event of a disagreement.

NOPTA will not be an independent statutory authority, ensuring that, in turn, it remains properly responsive to the joint authority. With the separation of offshore regulation and titles administration, the reforms seek to avoid conflicts between these two separate functions.

It is also important to note that the reforms include full cost recovery from industry. This move is likely to eventually reduce costs on the sector. Fees will be used exclusively for the regulation of petroleum and greenhouse gas storage activities and not for other government activities. Of course, fees will be subject to regular reviews and there will be annual financial reports.

Ninety per cent of Australia's known petroleum resources are located in Common­wealth waters. That said, Western Australia plays an important role in supporting the oil and gas industry. The North West Shelf Venture, located off our coastline, is the largest resource development project in Australia. To date, it is the largest resource development project in Australia's history. It accounts for more than 40 per cent of Australia's oil and gas production. So I for one am not suggesting that states and terri­tories should be sidelined. Indeed, it is critical that they are involved. But there is an argument for a national approach.

Obviously, a national regulator will have implications for state and territory admini­strative responsibilities, staffing and reven­ues. But that does not mean that states will not have a say in the process. There is no doubt that a national offshore regulator is a pressing and necessary reform. The Producti­vity Commission's review recommended it as a minimum and industry overall supports it. The current system is riddled with unnec­essary regulatory burdens. A single authority would avoid much of the duplication that currently exists.

The new authority will have responsibility for resource management, pipelines and environmental approvals, and compliance. This recognises the fundamental link bet­ween the safety of people and the protection of the environment. We believe that, by including the functions to regulate environ­ment plans and day-to-day operations, it will ensure a streamlined administrative process. The removal of bureaucratic duplication should also reduce approval times for projects.

Those are the principal objectives of the bills, but what of the vision? As I have previously said, the aim is to have a national regulatory authority that is well resourced. The vision is that, ultimately, it will have an international dimension. Most petroleum companies operate in multiple jurisdictions. While each jurisdiction has its own regulat­ory framework, the goal is the same: to protect workers and to protect the environ­ment. We need to play our part by having effective prevention and intervention meas­ures. We also need to be prepared to respond if the worst occurs. As the Minister for Resources and Energy has previously stated, from the Montara Commission of Inquiry:

… we learned what happened, what should have happened, and what changes are needed to addresses the deficiencies identified.

With the expansion of LNG projects, particularly in Western Australia, we are on target to become the second largest exporter in the next five years. That is a huge industry to manage effectively, properly and efficien­tly. However, with great opportunities invar­iably come great challenges. So the govern­ment believes maintaining the status quo is not an option. As we have seen in the case of both the Montara and Macondo incidents, their impact can have long-term conse­quences not confined to small or limited geographical locations.

Reports of inquiries into both incidents found they were preventable. It was also found that there was a culture of compla­cency within industry and its regulators. As a result, the bar for best practice in safety performance has been raised. Community expectations are greater and scrutiny is being and will continue to be intensified. To effect change we all understand there has to be meaningful collaboration between industry, government and regulators. Our common goal is or should be a safe and sustainable sector.

As I have said, it has been a long process, but we have the support of industry and, I understand from comments made here today, the in principle support of the shadow mini­ster and the opposition.

There has been, however, resistance from some sections that view the new authority as nothing more than a power grab by the Commonwealth. That is a short-sighted view. Perth is already a centre for offshore petroleum exploration and development companies. We also have an enviable reputa­tion in offshore petroleum production. With our vast resources and rapidly expanding oil and gas sector we are clearly the oil and gas capital of Australia. The announcement that the federal government will headquarter the independent national regulatory authority in Perth will further cement that position.

Further, we do have the potential to look beyond the horizon. We are uniquely placed to be industry leaders in the South-East Asia region. It is an opportunity we should grasp. It is an ambition we should all share.

Recently, the federal government hosted an International Offshore Petroleum Regula­tors and Operators Summit in Perth. This summit brought together over 400 represent­atives from governments, regulators and operators. Events such as this showcase our expertise, our innovation and our commit­ment to improving safety performance. It also acknowledges the importance of the offshore oil and gas industry in sustaining our country's economic prosperity and security.

I can say with confidence that these reforms to our regulatory system have strong support. The new authority will ensure oper­ating standards are the best and safest in the world. Western Australian senators have a further incentive to support these measures. The National Offshore Petroleum Safety and Environmental Management Authority will enhance our state's standing in the global oil and gas industry, provide guidance in the future and a system that others can emulate and copy. In a state and in an industry that has such an international focus and that is faced by international demands, that is a significant development and something we should all welcome.