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Tuesday, 7 February 2017
Page: 18


Senator MOORE (Queensland) (13:46): The opposition supports the Offshore Petroleum and Greenhouse Gas Storage Amendment (Petroleum Pools and Other Measures) Bill 2016. The bill makes a number of straightforward technical amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006. This legislation arises out of the proposed development of the Browse Basin. Oil and gas were discovered in the Browse Basin in the 1970s. However, there has not been a lot of development, due to its relative isolation and the depth of water 425 kilometres off the coast of Western Australia. In recent years, the development of resources in the Browse Basin has begun. The Ichthys field is being developed by INPEX, piping gas and condensate over 800 kilometres from the basin to Darwin for processing. The LNG processing facility in Darwin is currently under construction, and the first train is expected to be operational in September 2017.

The Woodside led Browse Joint Venture has also looked at the development of three other fields in the Browse Basin, including the Torosa field. This project has been a source of tension between the Western Australian government, the Commonwealth government and Woodside. The Torosa field straddles Commonwealth and Western Australian jurisdictions. Its maritime borders were redefined in 2014 when Geoscience Australia discovered several rocky outcrops above the field. It was concluded that these outcrops should be considered islands and therefore belong to Western Australia rather than the Commonwealth. This meant that Western Australia's share of the royalties from the Browse project rose from approximately five per cent to 65.4 per cent, and the Commonwealth government's share dropped to 34.6 per cent.

The purpose of this legislation before us is to provide protection and certainty to all parties in the event that the area contains multiple petroleum pools rather than a single pool. Currently, section 54 of the Offshore Petroleum and Greenhouse Gas Storage Act contemplates that an apportionment agreement relates only to a single petroleum pool that straddles a Commonwealth-state jurisdictional boundary. If it subsequently becomes apparent that the area specified in the apportionment agreement contains multiple petroleum pools, as may be the case when fuller technical information is obtained while this resource is being developed, then the apportionment agreement would fail. The bill also makes other amendments to the Offshore Petroleum and Greenhouse Gas Storage Act to allow the National Offshore Petroleum Safety and Environmental Management Authority to refund fees paid to it where necessary. I note that in March of last year Woodside decided to defer its Browse Joint Venture, citing low prices and high costs. That does not mean that this legislation is not important. We expect that the Browse Basin will be further developed, and that is why this amendment applies equally to existing and any future agreements. This is all about providing real investment certainty.

In contrast, what Western Australian Nationals leader Brendon Grylls is doing at the moment is undermining investment certainty in our resources sectors. I want to spend a few minutes on this. Mr Grylls is proposing a $5-a-tonne iron ore mining tax that would apply at first instance to BHP Billiton and Rio Tinto. This is expected to generate about $3 billion a year. It is different to a profit based tax. It is based on tonnage, not profit; the amount of iron ore dug out of the ground, not how much profit a mining company makes. That means companies could conceivably have to pay it even if they were making no profit at all. Not surprisingly, it is being condemned by Rio Tinto and BHP, who would be the first companies that would have to pay this new tax. Both would have to pay an additional $1.5 billion a year. Both have said publicly that it will hit jobs and investment in Western Australia.

This proposal has also been criticised by the Premier of Western Australia, the Western Australian opposition leader—and we will probably hear them speaking a lot in the next couple of weeks—the Prime Minister, the federal Leader of the Opposition and, although it has taken him a while, last but not least the Deputy Prime Minister Barnaby Joyce. Last week he urged the WA Nationals leader to dump the plan. That earned him a bit of touch-up from Brendon Grylls, who called him a lackey from the Pyne-Xenophon government. It will be interesting to see what happens from here. It was only a few weeks ago that the Deputy Prime Minister was telling the New South Wales National Party to dump their plan to ban greyhound racing. He got his way there, and we have seen what has happened. It will be interesting to see if he can roll the Western Australian National Party as well. I hope that he succeeds sooner rather than later. What is important here—generally and in this legislation—is certainty. That is what this legislation is about: providing certainty for the oil and gas industry. It is also needed in the iron ore industry. I commend this bill to the House.