Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Hansard source

I move:

That the amendments be agreed to.

In agreeing to the amendments, on behalf of the government I would like to make a few comments because this is world-first legislation. Also, I welcome the member for Groom to the House, because of the constructive contribution made by the opposition in facilitating the progress of what is world-first legislation.

It is important to note that those discussions were assisted firstly by the valuable work of the House of Representatives Standing Committee on Primary Industries and Resources which involved detailed consultations with industry and all other stakeholders. Many of the amendments suggested by the House committee were incorporated in the initial legislation to be considered by the House with the support of the opposition. The bill was also referred to the Senate Standing Committee on Economics. Could I indicate that the bill incorporates an amendment to reflect the government’s acceptance of a recommendation of the Senate Scrutiny of Bills Committee relating to the better definition of the minister’s regulation-making power.

Broadly, the amendments agreed to in the Senate have the following important outcomes. Firstly, petroleum retention leaseholders are to be given a priority to apply for the grant of a greenhouse gas holding lease in relation to areas covered by the retention lease. The objective of this is to allow the retention leaseholders to consider their own need to sequester their greenhouse gases arising from petroleum operations. Similar arrangements apply to petroleum production licence holders. Secondly, the holder of a petroleum production licence will be given priority to apply for a greenhouse gas injection licence where (a) all of the greenhouse gas proposed to be injected will be obtained as a by-product of petroleum recovery operations carried out under the production licences and (b) some or all of the greenhouse gas substance to be injected will be obtained as a by-product of petroleum recovery operations carried out under any production licence and the responsible Commonwealth minister is satisfied that it is in the public interest for this to occur. This is to allow the production licensees to use a storage area in their production licence area for their own sequestration needs, but it will also provide an ability for the injector to sequester gas from their own or other petroleum operations or, potentially, additional greenhouse gas from other sources to mutual benefit.

The amendments also provide for a closure assurance period of a minimum of 15 years to be established. This period commences on the issue of a site-closing certificate—a process estimated to take five years after injection ends and which ceases when the responsible Commonwealth minister is satisfied that there is, inter alia, no significant risk that a greenhouse gas substance injected into the formation will have a significant adverse impact. On the cessation of the closure assurance period, the injector’s liability against claims for negligence et cetera ceases. This is effectively a 20-year limit on liability of the injector, with the Commonwealth assuming liability thereafter.

I also address the concerns raised by the Senate Scrutiny of Bills Committee. The bill has been amended 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 in determining whether a significant risk of a significant adverse impact exists. Thresholds will be determined on the basis of the probability of occurrences and consequences.

The facilitation of this bill through both the House of Representatives and the Senate has represented a constructive engagement between the government and the opposition, and so it should be. As we all appreciate, Australia as a nation is heavily dependent on fossil fuels for energy purposes. In actual fact, 80 per cent of our electricity comes from coal fired power stations. Whilst the government has a significant challenge in terms of our renewable energy target of 20 per cent by 2020, the truth of the matter is that we are still going to be heavily dependent on fossil fuel for energy security in Australia. We therefore understand that the issue of technology is the key to guaranteeing energy security and our economic future. For those reasons this legislation, side by side with working with industry and like-minded governments on actually putting in place carbon capture and storage capacity, is of the utmost importance not only to Australia but also to the global community. (Extension of time granted)

A recent International Energy Agency report reinforced that point and clearly indicated that throughout the global community coal fired power stations are also going to be central to energy security in both developed and developing nations. For that reason the legislation that is currently before the House is being watched closely by the international community. A range of governments have actually sought briefings from my department with respect to the nature of the legislation, especially going to the complex issue of liability and also the question of ensuring closure in a safe and proper way.

In conclusion I say that, on the basis of this Commonwealth legislation going to our responsibilities for offshore areas, it is now a priority that state and territory governments proceed to actually finalise consideration of their onshore legislative regime, because the issue of sequestration is not only capable of being achieved in offshore waters for which the Commonwealth has responsibility but also being closely pursued by a range of businesses with respect to onshore capacity.

I say to all those involved in the debate, within the House and the Senate and from the private sector of the Australian business community: thank you for your cooperation. It is a world first and without your constructive input Australia would not be best-positioning itself to actually confront the challenge of climate change in the 21st century. I commend the bill to the House.

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