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Thursday, 22 September 2011
Page: 6791


Senator MARK BISHOP (Western Australia) (10:51): At the outset it is a very useful thing to identify the purpose of the Landholders' Right to Refuse (Coal Seam Gas) Bill 2011, which I will now do. The bill seeks to make the recovery of coal seam gas unlawful on food-producing land without the prior written authorisation of all who have any legal interest in that land. From that definition, which is contained in the explanatory memorandum to the bill, I believe, necessarily, that the bill needs to be considered in the context of two other bills either currently before the chamber or about to be introduced into the chamber: firstly, the government's clean energy package of bills and, secondly, the government's proposed Minerals Resource Rent Tax Bill. Both of those sets of bills, as I understand it, are strongly supported by the proponents and advocates of this bill for good, sound and cogent reasons. Their reasons have been well articulated and well established on the public record. Indeed, in passing on rates in respect of the mineral resources rent tax, the Greens have publicly identified that they seek to increase the rent tax imposed by the Commonwealth for access to minerals below the ground. The context of those two sets of bills, therefore, and their relevancy and connection to this bill are important. I will return to that issue later in my remarks.

Let us now consider a range of matters or propositions contained in the bill before the chair. Firstly, the bill exercises Common­wealth power to apply penalties on any constitutional corporation if it, the constitutional corporation, undertakes any activity to explore or produce coal seam gas on food-producing land without the prior written authorisation of everyone who has an ownership interest in that land. Let us think about that critically important proposition. The bill defines 'coal seam gas mining activity' and 'food-producing land' extraordinarily widely. Coal seam gas mining activity is defined as any activity undertaken for exploration—we should note that—or production of coal seam gas. Let us stop here.

Exploration is the first phase of exploration of a mineral or mineral-like deposit. It is the stage only where a potential deposit is identified. Issues like the scope, breadth or depth of the deposit come later. Issues of content come later. Issues relating to value come later. Issues relating to purity come later. Issues relating to commerciality come later. Issues relating to access come later, and issues relating to cost and accessibility must come much later in the process of development.

But the process of raising capital in incremental amounts as potential deposits are valued and revalued is vital to all stages but particularly the exploration stage. Essen­tially, miners raise debt or equity by selling future rights to producers from a site during all phases of development, including post exploration. Yet this bill would stop such a process from the beginning because it requires the written authorisation of everyone who has an ownership interest in the land. It is the most perfect vehicle ever devised to prevent the proving up of likely deposits of coal seam gas.

Let us now turn to the second unlikely phrase used in the bill—that of 'food-producing land'. At the outset I observed that such a phrase is also extraordinarily wide in application. What does 'food-producing land' mean? It is clearly not just arable land, fertile land, developed land, marginal land, grazing land, crop-growing land or irrigated land. If it were, it would be so defined in the bill. No, I suggest it is arguably and clearly intended to mean any land capable of producing food. Let us think about that for a moment. Let us think about technology and science. Let us think about the ingenuity of humankind. Let us think about desert land recovered across Australia and around the world for wheat production. Frankly, there is not any land anywhere in Australia that, with the correct application of science, technology, finance and endeavour, is not capable of producing food.

Let us go back to the post-war years—post the First World War and post the Second World War—and look at land areas that have been sequentially developed in this country. I refer in particular to the river lands of South Australia and Victoria, to the marginal wheat belt territories in the south of Western Australia, to the Ord River lands in Western Australia and to the rich, fruit growing areas of Carnarvon in the north-west of Western Australia. All of those land areas over time have been developed and exploited with a combination of those matters—technology, science, finance and human endeavour. The bill, in that context, seeks to prohibit any coal seam gas activity from the beginning of exploration in any land anywhere in Australia which is or has been capable of producing food. Again, in that context, food is not defined.

In stopping that process, the bill expressly identifies at the outset how that end is to be achieved. The bill, if enacted, would not transfer the ownership of coal seam gas deposits from the Crown; it would transfer control of those resources and probably also any coal deposits requiring the draining of methane from the Crown to the holders of surface rights on food-producing land. Such a change would enable the owners of any surface rights to extract economic rents in exchange for authorising exploration and production of gas of which they have no ownership, thus depriving the community of its right to maximise its return from assets commonly held. Let us break up that proposition into its parts so that it is clearly understood. Firstly, ownership of minerals for hundreds of years has vested in the Crown. Secondly, the Crown has received income via taxation or royalties or excise for permitting lawful exploitation. Thirdly, the Crown uses that revenue for the everyday purpose of government. Fourthly, because mineral rights were vested in the Crown, the value of exploration is never included in the price of land. Fifthly, and finally, the bill proposes to pass that value, that unpriced value, to the current and temporary owner of the land without payment of any consideration—truly a most remarkable proposition. But it gets even worse.

The government has had a clear position on the Minerals Resource Rent Tax Bill for at least the last 15 or 18 months. The government's position is to increase royalties on major companies who seek to develop mineral deposits around Australia. There has been criticism of that position from the opposition. They are opposed to it. There has also been criticism of that position from the Greens party—not that we are doing it, but they say that our rate, our levy, is manifestly inadequate and should be increased. Senator Brown has repeatedly said that he and his party will move amendments in this chamber to the MRRT Bill when it is introduced to increase the rate. So, for every other mineral, the Greens want to increase the take to the Commonwealth for the purpose of everyday government, but with the bill before the house the Greens want to transfer that benefit to the current titleholders, however temporary, without payment of any consideration at all. Such a transfer of wealth or potential wealth is totally unprecedented, totally unwarranted, unfair and totally devoid of any equity at all.

Senator Waters interjecting

The ACTING DEPUTY PRESIDENT ( Senator Cameron ): Senator Bishop, ignore the interjections and address your remarks through the chair, please.

Senator MARK BISHOP: I will indeed, Mr Acting Deputy President. I will say it again. Such a transfer of wealth is unprecedented, totally unwarranted, unfair and devoid of even a scintilla of equity at all.

Earlier I referred to the authorisation process contained in the bill. The bill requires that such authorisation must include details of an independent assessment of the current and future risks associated with the proposed coal seam gas mining activity on or affecting the food-producing land and any associated groundwater systems. It is unclear whether this assessment would mean an environmental impact statement, an EIS. If so, it clearly would impose a significant impost on landholders. What does this mean? It means this: the bill is seeking to deal with environmental issues by privatising assets owned by the community and setting up a further but protracted environmental process which will not produce improved environ­mental outcomes, since the existing Commonwealth EPBC Act and state environmental processes will continue to apply.

In that context, let me turn to the work that has been done on the package of clean energy bills for the last nine months. We all know there has been nine months of exhausting committee work. We know that the Greens accepted an invitation from the government to provide the deputy chair to that committee. We know also that it has concluded its deliberations and that its policy recommendations have been examined and accepted by government. We now know that the work of that committee on the clean energy bills has been referred to a parliamentary committee for some six, seven or eight days of exhaustive examination. We know and we hope that that package of bills will be passed in this chamber prior to Christmas. And we know that that package of bills is about carbon reduction, carbon abatement and a clean energy future.

In that context, the carbon pricing package contains more than $10 billion to promote renewable energy, but early emissions reductions are expected to be driven by the carbon price forming a switch from coal-fired electricity generation to gas-fired generation, which of course has significantly lower emissions. There have been numerous repeated and respected scientific inquiries and findings from universities all around the world that say that the output of carbon emissions from the gas production and gas use process in manufacturing energy is something in the order of 50 to 70 per cent below that of coal. So efforts by the Greens in this bill to prevent the development of gas in this country are totally inconsistent with the transition to a lower carbon future. It is manifestly clear that gas-fired electricity generation is more reliable than renewables at present. The coal seam methane industry is a stunning example, a great example, of our success as a nation and a government at state and Commonwealth level in attracting investment. Three years ago this industry was not even thought about. Now, we have got a $45 billion investment. If the Greens want to reduce CO2 emissions, they must understand that gas is going to make a huge contribution to that because it is clean energy, it is plentiful, it is cost-effective and it is reliable.

I might be tempted to say what the opposition would say of this bill. They might say it is green extremism. They might say it is absurd bureaucratic process. They might say it is a misuse of policy to achieve an adverse predetermined outcome. But I do not say those things. The opposition might say them in due course, but I do not say them. What I do say of this bill is that it is an example of poor thinking, confused thinking, woolly thinking and silly thinking. It seeks to achieve sound environmental outcomes by absurd bureaucratic processes.

As I said at the outset, the bill effectively provides an absolute veto of coal seam gas activities by the owners of food-producing land, which is broadly defined in the bill. The bill seeks to overturn state laws which seek to properly balance—

Senator Heffernan: Madam Acting Deputy President, on a point of order: could I just point out to the chamber the incorrectness of some of the logic in this debate. Santos has already agreed—

The ACTING DEPUTY PRESIDENT ( Senator Pratt ): There is no point of order. You cannot take frivolous points of order. Senator Bishop, please continue.

Senator MARK BISHOP: Thank you, Madam Acting Deputy President. The bill seeks to overturn state laws which seek to properly balance the competing interests of the owners of surface rights to land as granted by a particular state with the rights granted by the same state to explore for and produce coal seam gas. It does this by ensuring that, at a minimum, surface owners are fully compensated for any economic loss or inconvenience as determined through a proper process. Such a change in this bill would enable the owners of any surface right to extract economic rents in exchange for authorising exploration for and production of gas of which they have no ownership, never had any ownership and never wanted any ownership, thus depriving the wider community—all of us—of its right to maximise its return from assets commonly held. This has been the case since European settlement of this continent in the 18th century and it has been the case in right of the Crown since the 12th century in Great Britain. This bill seeks to overturn that right of common ownership, common value and common return to the government—to the people—by the Crown through the provision of common services.

The excuse for overturning these long-established state systems is concern about the alleged environmental impacts of coal seam gas projects. But the bill itself does not do one thing for the environment. It simply transfers control of assets owned by us—or by us through the state—to owners of any interest no matter how remote in terms of surface rights. The bill proposes no change to environmental regulation, because it does not need to. Where matters of national economic significance are involved, the EPBC Act comes into play, as it did with all current Queensland CSG projects—projects which the Minister for Sustainability, Environment, Water, Population and Communities, Mr Burke, on behalf of this government—

Senator Heffernan: It's all lies.

The ACTING DEPUTY PRESIDENT: Senator Heffernan, come to order.

Senator MARK BISHOP: All these CSG projects are fully subject to state environmental regulation. In any event, the bill, if passed, would undermine efforts by the Australian government to assist the states to develop a harmonised, regulatory and best practice framework for CSG activity work currently being undertaken cooperatively by all interested jurisdictions, including the New South Wales government—Senator Heffernan's own colleagues down the road. That the bill is a crude political exercise is shown by the fact that it will not affect arrangements with respect to petroleum not found in coal seam or minerals not found in association with gas, even when there might be analogous environmental or regulatory issues. Again, as I said at the outset, the bill is so broadly drafted that any competent person could drive a bull and dray through it. (Time expired)