Senator McLUCAS (Parliamentary Secretary to the Minister for Health and Ageing) (1:51 PM) —As outlined when the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and related bills were introduced to the Senate, the government is committed to comprehensive action to tackle climate change whilst maintaining Australian jobs and economic prosperity. We are committed to a portfolio of responses, including development of renewable energy sources and a focus on improving efficiency in energy consumption. Carbon dioxide capture and geological storage, or CCS, holds great potential to reduce emissions of carbon dioxide and other greenhouse gases from fossil fuel use. Geological surveys have indicated that the storage formations in offshore waters made available by these amendments have the potential to securely store hundreds of millions of tonnes of carbon dioxide. These quantities represent a significant proportion of Australia’s greenhouse gas emissions from coal-fired power generation and from industrial processes. CCS has the potential to substantially reduce Australia’s emissions.

On Friday, 19 September, the Prime Minister announced a major initiative to accelerate the development of carbon capture and storage technology to pave the way for its commercial deployment across the world by the end of the next decade. The initiative will involve the establishment of a new global institute to help deliver the Group of Eight’s goal to commit to at least 20 fully integrated carbon dioxide capture and storage projects by 2020. The institute will help deliver this goal by facilitating large-scale demonstration projects and identifying and supporting the necessary research, regulatory settings and policy frameworks. The Australian government is determined to play a global leadership role in CCS. This bill is an important part of that objective and will create the world’s first property rights and regulatory framework specifically for long-term greenhouse gas storage.

On 25 June 2008, the Senate Selection of Bills Committee referred the provisions of the bill and associated bills to the Senate Standing Committee on Economics. The committee received submissions and heard testimony from a broad range of stakeholders, including the petroleum industry, coal producers, government and NGOs. The committee publicly released its final report, which includes four recommendations, on 23 September. I would like to thank the members of the Senate economics committee on behalf of the government for their hard work on this bill. The committee’s report provides an endorsement of the government’s proposed legislative framework. The government has already addressed the committee’s recommendation 3 through the amendments that were tabled in the House of Representatives on 18 September and that are contained in the revised bill.

The government supports the four recommendations made by the Senate economics committee. The government supports recommendation 1. The passing of this bill will enable a key component of the CCS process—geological storage—to be actively developed by industry proponents. Companies are keen to identify suitable storage sites to match their parallel development of carbon dioxide capture from coal- or gas-powered electricity generation and from other industrial and extractive processes.

The government also supports recommendation 2. However, given the lead times likely to be involved, the government considers that it would be unlikely that three years would allow sufficient experience with the administration of the act to provide the background for a comprehensive review. The government therefore proposes that the review be undertaken after five years.

The government largely supports recommendation 3 from the report. The bill, as amended in the House of Representatives, now includes a provision for the responsible Commonwealth minister to establish expert advisory committees on a needs basis which will strengthen the treatment of the significant risk of a significant adverse impact test. The revised bill also addresses such matters as membership, remuneration, confidentiality and conflicts of interest. However, the government does not consider that the scope of expert advisory committees to be established under this legislation should extend to environmental impacts. This is because environmental impact assessment is the role of the Environment Protection and Biodiversity Conservation Act and is therefore not dealt with in this legislation.

In relation to recommendation 4 from the committee, which deals with long-term liability, the government notes that this recommendation supports the current framework in the bill but it also recognises that the whole issue is a complex balance between the need to provide industry with the certainty it needs to make investment decisions while ensuring that the risks of anything untoward happening in the longer term are addressed.

The Senate Scrutiny of Bills Committee, in considering the amendments made in the House of Representatives, concluded that provisions in the revised bill relating to the minister’s regulation-making power in respect of the significant risk of a significant adverse impact test ‘may inappropriately delegate legislative powers’ and sought the minister’s advice on whether these criteria might be included in the primary legislation rather than in the regulations. To address this matter, it is proposed to amend the bill to define the impacts that will be regarded as adverse impacts. The amendment will allow the regulations to set threshold criteria that may be taken into account when determining whether a significant risk of a significant adverse impact exists. Thresholds will be determined on the basis of the probability of occurrence and consequences.

In closing, may I refer to the need for urgent action in addressing climate change and the significant role that these amendments may play in developing one of the available methods for reducing greenhouse gas emissions from coal-fired power generation and industrial processes. Large-scale projects for capturing and storing greenhouse gases involve investments of many hundreds of millions, or billions, of dollars. Several large-scale projects have already been considering their requirements for geological storage for some years. While recognising the complexities needing to be addressed by this bill, the proponents are also eager to gain access to areas so that they can commence detailed assessment of storage formations. This bill provides that access and will play a key role in accelerating the development of the carbon capture and geological storage industry. In doing so, it provides a significant opportunity to tackle climate change in a way that protects Australian jobs and maintains our economic prosperity. I look forward to the detailed debate on the bill.

Question agreed to.

Bills read a second time.