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Thursday, 25 June 2009
Page: 7299

Mr RANDALL (12:14 PM) — Thank you, Mr Acting Deputy Speaker. I am pleased to speak on the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 today, which I loosely term the geosequestration bill, and the associated amendments. As we have heard, the bills to be amended in this legislation were passed last year. These bills before us today make purely administrative and technical corrections to the existing legislation regarding safety levies and title matters, which I support.

The original basis of the legislation was an initiative of the coalition in government following a review by the science and innovation committee with the foresight to recognise the importance of creating a framework to manage the relationship between the petroleum industry and offshore storage of greenhouse gases. The resulting legislation aimed to regulate future industry. It provides for the injection and geological storage of greenhouse gas substances in Australian offshore areas in line with petroleum industry legislation. Whilst complicated by its very nature, the legislation was designed to regulate the exploration, assessment and testing of geological storage of greenhouse gases and to tackle potential conflicts between offshore petroleum operations and titles and geosequestration operations and titles.

As a nation we need to reduce carbon emissions; we all know that. With Australia’s vast resources of gas and coal we need to find more efficient ways of serving our energy needs and reducing the emissions at the same time. I note that during the debate on the original legislation there were strong points made that the legislation created disincentives to invest in greenhouse gas storage operations. We must manage the competing interests at play between those seeking to sequester the gases and the petroleum industry and between the cost burden and responsibility of building the infrastructure and monitoring the sequestration of CO2.

I agree there is a strong need to manage the relationship between those seeking to drill for gas and petroleum and those seeking to store carbon. They are working in the same environment. I have taken a strong interest in geosequestration, the development of geological storage of greenhouse gases, in recent times. I have welcomed the opportunity to speak to the experts in the field and have visited a number of research facilities working on carbon capture and storage.

The legislation before us provides for the capture, or geosequestration, of greenhouse gases—carbon, in other words—produced mainly by large emitters. If we continue to use fossil fuels for energy we need to find smarter ways to use them and to invest in clean coal technologies such as gasification and carbon capture. Let me stress here that the Rudd government, for all its green rhetoric, has not offered any real money for clean coal technology. Before the election they were talking about clean coal technology and how they were going to develop it. There has been very little word about clean coal technology since, except in the duplication of international bodies to pursue clean coal. That has fallen off the Labor Party agenda.

Conventional coal fired electricity generation plants have efficiency of about 35 per cent, which means that about 35 per cent of usable energy in the coal is converted into electricity. New technology can raise the efficiency by up to 55 per cent and at the same time reduce emissions by 25 per cent. The science of geosequestration is an innovative process and one that can offer benefits to Australia by storing carbon dioxide underground. As is the nature of new technology, it is often a matter of costs versus benefits—how much people are prepared to pay, how much the big emitters are prepared to invest.

Currently, carbon capture and storage options include storing carbon dioxide in existing gas fields that are no longer used for production. The removal of gas from reservoirs has created porous spaces for the CO2 to be stored. Alternatively, deep saline aquifers can store carbon. Because they are so deep and the carbon is trapped below so much mud and clay, there is little risk of any path to the surface. The CSIRO is also looking at coal seams to store carbon dioxide. In fact, coal seams already store naturally occurring CO2.

Yesterday I visited Geoscience Australia for a briefing on the carbon capture and storage project, and I thank them for their brief. This was an outstanding opportunity to speak to the experts in the field, and they showed me the cores where CO2 would be stored. There is a misconception that when you take the gas out of a field you take it out of some huge cavern or vacuum. You do not. It is actually taken out of a spongy type rock, sandstone almost, that you see houses built from. Once the gas or the liquids have been taken out of this geological structure, there is obviously a great opportunity for other gases to go back in. Overlaying this soft, porous rock that allows the gas to be reinjected is usually a hard rock surface. I was shown cores of these as well. Obviously you do not want leakage. Many of the sites from which natural gas is taken have been there for millions of years, so there are millions of reasons for them being good storage spaces.

I also recently had the opportunity to visit the Australian Resources Research Centre in Perth, very close to where I live. It is a partnership between CSIRO, the state government and the Curtin University, with more than 300 staff working towards cutting-edge technology in oil, gas and the mining sector, including carbon dioxide geosequestration. The centre was established to enhance petroleum and mining operations, to partner and work with the industry and to undertake significant research projects. It is a leader in petroleum and minerals research and a centre where scientists can interact, exchange information and explore new ideas in partnership with the industry to ensure the ongoing sustainability of Australia’s resources and environment.

I welcome the opportunity to learn more about carbon capture from an expert, Dr Silvio Giger. Dr Giger is a structural geologist with the CSIRO and specialises in research technologies to increase oil and gas recovery in order to help secure Australia’s long-term energy security. He also assesses the viability of long-term geological underground storage of CO2—an important role in this day and age. Carbon capture and storage technologies could be well utilised in Australia. The centre’s location in Western Australia is highly appropriate, given that Western Australia produces two-thirds of Australia’s non-fuel materials and about half of it is petroleum. As well, Western Australia produces around 70 per cent of Australia’s natural gas and 68 per cent of its crude oil production. The strong investment means that geological rock formations are among the most studied in the world, and a good base for geosequestration adaption.

A Perth basin is being studied for its potential to store CO2. There is a shale layer over the top, which I have already alluded to generally, which has been identified as a very good seal. It is a sandstone reservoir large enough to store the total emissions from all major sources from the south-west of Western Australia—an estimated 22 million tonnes per year. As I said, one of the areas that sorely need this as a result of the Collie coalfield and what is called the Harvey fault is this ideal location. This is the one being explored extensively by scientists, particularly people like Dr Silvio Giger.

Chevron’s $50 billion Gorgon gas project is one of the largest resource developments in Australia off the coast of Karratha and will make the state a leader in the storage of greenhouse gases. The project will create 600 jobs and will be a leader in geosequestration technology. The major aspect of that project is to ensure the successful sequestration of carbon dioxide as a by-product. It is estimated to capture and store three million tonnes of CO2 per year for 40 years. The CO2 will be separated from the gas and injected into a saline reservoir 2,000 metres below Barrow Island. It will cut the project emissions by 36 per cent. The technology is already in practical use.

The Victorian Otway Basin project, basically a geosequestration test project, was launched this year. It involves compressing and transporting 100,000 tonnes of carbon dioxide and then sequestering it in a natural gas reservoir two kilometres below the surface. I understand some 18,000 tonnes has already been stored. It serves as an example as to what can be achieved and where Australia can go with this technology.

Energy efficiency and reducing emissions is prominent in my electorate. As I have mentioned previously, Alcoa has already taken direct action to address climate change. Globally its emissions are down by 36 per cent on 1990 levels. At the two refineries in Canning they have cut emissions by 12 per cent a tonne over the same period. It has invested in energy efficient cogeneration, CO2 geosequestration and carbon capture technology.

There are two cogeneration plants at the Pinjarra refinery. This technology offers energy efficiency of 75 per cent, compared to only 30 per cent for conventional methods, and saves more than a million tonnes of CO2 emissions a year at Pinjarra compared to coal-fired power. This is the equivalent of taking 140,000 cars off the road per year. Essentially it means that Alinta, Alcoa’s partner, is able to supply more consumers with electricity, and the steam that is created in this process and would traditionally be wasted is used by Alcoa in its refinery for greater energy efficiency and lower greenhouse gas emissions. Even before this unit was completed, it became a finalist in the 2005 WA Environment Awards.

I have only a short period of time left, so I would like to say that the coalition acknowledges the importance of taking a unified commitment to the Copenhagen summit. We want an unconditional five per cent reduction on 2000 levels by 2020 and conditionally up to 25 per cent. But we propose an earlier start to the emissions abatement and the potential to build on a 2020 target via voluntary action. As I have said many times on previous bills, Australia should wait until we go to Copenhagen, to find out what the great emitters of this world are doing, rather than locking ourselves into a legislative framework that gives us no flexibility to be in step with the rest of the world.

The penalty, of course, is exporting jobs, exporting income and exporting damaging environmental gases to places like Indonesia, who produce far less efficiently and are greater emitters in their refineries than we are in Australian refineries. It is just crazy for us to be ahead of the game before the rest of the world decides how it is going to get on board.

For some reason, the Labor Party thinks that being ahead of the game is smart. All it is going to do is cost jobs. What about the workers? I have said to the member for Charlton, the former ‘champion of the workers’, that realistically, when he is talking about these things, he has forgotten about the workers, because he is exporting jobs. Companies like Alcoa tell me that they will have to go offshore because they will not be able to compete in any efficient way in Australia if this legislation comes in with the targets that the Labor Party is suggesting now and wants to lock us into before we have a level playing field.

The Rudd government needs to think seriously about its levels and its target. The coalition is strongly supportive of cutting greenhouse gas emissions. When the Labor Party talks about signing Kyoto and brandishes that around as a great achievement, it fails to tell the rest of the world that Australia was already achieving the Kyoto targets. I do not know if people understand this. When I say to people in my electorate, ‘Do you understand that, before Australia even signed the Kyoto protocol, we were actually achieving the Kyoto targets, unlike the rest of the signatories who don’t?’ they reply: ‘Why don’t people tell us that? Why don’t people tell us that Australia actually meets the Kyoto targets, instead of saying how terrible we are?’ Well, we do, we always have and the symbolic signing of Kyoto did nothing more to reduce greenhouse gases in Australia. It is just a crazy ideological bent that they are off on.

The coalition’s green carbon initiative aims to achieve, by 2020, additional annual reductions of at least 150 million tonnes of carbon dioxide equivalent encompassing these measures. I conclude that this legislation is obviously supported because it is sensible. The geosequestration technology is in its infancy, but Australia is at its leading edge. We have a magnificent mindset in Australia, through the scientists that we have in the organisations I have already acknowledged. They are ahead of the game, and the rest of the world is getting on board. As I said, Gorgon is going to be one of the outstanding models of what can be done in this area. That is the reason it has received state and federal environmental approvals to go ahead with this massive project. It is going to produce trillions of tonnes of energy efficient gas for the rest of this world, and it will leave Australia as a showcase on how we should store our greenhouse gases.

Debate (on motion by Ms Grierson) adjourned.