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Thursday, 17 September 2009
Page: 6921

Senator JOHNSTON (4:30 PM) —On behalf of the opposition, I want to confirm that we welcome the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009 and welcome the commitment by the government to the policy underpinning this legislation, implementing and refining on a proper basis a framework for the development and use of carbon capture and storage technology.

The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 includes technical amendments, corrections to the 2008 legislation and minor policy changes that have stemmed from reviews in the area. Having had a small role in assisting the government with the construction of this bill, I can say that it is an ongoing work in progress because it is at the cutting edge of a totally new area of public policy: the long-term—and by ‘long-term’ I mean several tens, and possibly hundreds, of years—storage of greenhouse gas in appropriate repositories well below the surface of the earth. The bill provides further clarity for the injection and geological storage of greenhouse gas substances, as I have said, in Australian offshore areas. Bear in mind that the Commonwealth is responsible for offshore areas. The states will have to come up with comparable and mirrored legislation with respect to onshore areas.

Specifically, the bill: provides for an expedited consultation process for the granting of an access authority to titles in adjoining offshore areas where the title holders have consented to the access; changes who makes the decision to declare a location from the designated authority to the joint authority, which is a very good change; changes who makes the decision to grant scientific investigation consents from the designated authority to the joint authority; and amends the act to require notification of discovery of petroleum in a production licence area, and this particular amendment is a very important one. The amendment, as I read it, says that, if a greenhouse gas producer strikes oil while seeking to inject and exploring for an appropriate repository, they have to notify of that discovery, as is required for other titles. It extends the period of notification of discovery of petroleum from immediately to within 30 days from the completion of the well that led to the discovery. That is a very important consideration, given that we have now potentially three different types of subsea rights users with respect to these offshore regions. Predominantly, we are thinking of both the North West Shelf off Western Australia and the Bass Strait region adjacent to the Gippsland coalfields.

There were two additional sets of amendments introduced by the government in the House in relation to this bill after its introduction. These amendments relate to the new part 15 for the approval and registration of transfers of, and dealings in, petroleum titles. This amendment corrects an oversight in the 2008 legislation and a concern raised by the coalition at the time, I am pleased to report. The other amendment introduced by the government added a new part 13A into to the legislation and new part 9.10A to enable the minister to appoint a commissioner to undertake a commission of inquiry into factors specific or incidental to a significant offshore petroleum or greenhouse gas storage incident. As such, passage of this bill will enable the Commonwealth to appoint a commissioner to conduct a commission of inquiry into the incident at the Montara offshore oilfield in the Timor Sea. We are all aware of that recent incident.

In relation to the other bill in this package, the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009 amends the references to the Pipeline Safety Management Plan Levy in the act. This is effectively a name change for the existing levy and will facilitate pipelines being covered under safety regulations in future rather than pipeline regulations. The Inpex pipeline is one that springs to mind that it is important the legislation covers. The explanatory memorandum states that there are no additional costs to industry as a result of this change. The same annual cost applies to the payment of levies in Commonwealth waters by the pipeline licensee. Safety levies are calculated annually, commencing each calendar year. The safety case levy is in place to recover NOPSA’s costs associated with monitoring safety compliance.

The legislation has been in development since 2005. As I have indicated, it was commenced by the Howard government. It is an ongoing process. I confirm that there is an enormous degree of bipartisanship with respect to this very important framework. The rest of the world is watching the way we are going about the business of establishing a legal framework for the long-term storage of greenhouse gas in offshore repositories.

The coalition in government was committed to implementing a regime to provide greenhouse gas injection and storage rights in offshore waters and it was during our time in government that the drafting of legislation commenced to make amendments to the Offshore Petroleum Act 2006. I congratulate the current minister for continuing that evolutionary process. He has done a very good job in progressing this. There will be future changes as different bits of technology come forward and as we consider different aspects of the management of our offshore petroleum rights and other access licences. There will need to be future changes. No-one should be in any doubt about the fact that this is an evolutionary process.

The legislation was considered by the parliament in 2008 and these bills now slightly refine that. We recognised that this legislation needed to carefully balance the interests of existing users of offshore acreage and their lenders, bearing in mind, in line with Senator Eggleston was just saying, that the enormous amount of capital required to develop offshore gas and oil deposits need to be protected. We cannot undermine those with a third type of tenement, so there is a balance to be struck. I think that the legislation strikes the appropriate balance and provides a useful framework, one that provides confidence and security to the existing titleholders such that they can rest easy that there is no undermining of their tenure and the value that they hold in those licences.

The coalition was keen to support the development of CCS technologies—indeed, we commenced the Otway Project down on the south-west coast of Victoria, which I am given to understand is a very successful injection of 65,000 tonnes, as it now stands—with successful monitoring and an ongoing learning process as to how we detect the carbon dioxide so that it is sequestered. The coalition invested $3.4 billion in its climate change strategy, including $1.1 billion for low emissions technologies including carbon capture and storage.

I commend the legislation without going on any further because I think a lot of the things that I have said do speak for themselves and echo what I said in 2008 when further amendments to this legislation came forward. I commend the bills to the Senate.