Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Hansard source

I shall not keep the House long on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Compliance Measures No. 2) Bill 2013, bearing in mind that we do, of course, agree with the government in terms of the changes it is making. Offshore petroleum safety is paramount. The changes that are being introduced under this amendment are changes which not only do we support but come from the 2010 Montara commission of inquiry report together with other policy and technical amendments. This is part of the process of ensuring that the Australian and global communities are confident in the operation of offshore petroleum assets, particularly in the oil and gas industry.

Offshore petroleum is a very important part of Australia's economy, though you would not know it from the budget last night, and I will come back to that later. The reality is that our gas exports at the moment come virtually entirely from offshore petroleum in Western Australia, with some also from offshore petroleum in the waters north of Darwin. As a Queenslander, I have to say the industry is expanding onshore in Queensland, but it is also expanding offshore in Western Australia. We see the introduction of the latest technology in the world, the technology of floating LNG, where the plant is actually placed on what could be called a ship, though it is bigger than an aircraft carrier. In fact, one of the executives of the gas industry says it is a pretty handy par 5—it is about 490 metres long. That is a hell of a big ship. On top of that, you put the LNG plant and that plant then produces LNG and exports it to the world.

It is imperative that as Australia moves into the next phase of offshore petroleum production—liquids, condensate and oil, and also gas for the LNG plants to supply the Asian markets in particular—we have the sort of legislation that ensures that those operations are done safely and in an environmentally sustainable way. We all know that there have been some unfortunate, and in fact disastrous incidents in recent times. Montara was the incident in Australia that caught the public's attention. Far bigger tragedies have occurred: the Deepwater Horizon spill in the Gulf of Mexico on 20 April 2010 and the death of two drill workers in the Otway Basin off the Victorian coast in 2012. They are salient reminders to the oil industry that it needs make sure that its operations are not near-perfect but actually perfect.

The bill will amend the act to implement a number of findings in the legislative review conducted into Montara and will aim to strengthen the implementation of polluter pays principles in the offshore petroleum regularity regime. I hope we do not get to that. I hope the industry operates in a way that is safe but also prevents the escape of any molecules into the environment. The amendments in this bill will: introduce alternative enforcement mechanisms enabling inspectors appointed by NOPSEMA to issue environmental improvement notices; introduce a statutory duty on petroleum titleholders in the event of the escape of petroleum; provide an ability for the regulator to take up the necessary actions to recover costs from the titleholder; and, finally, improve the effectiveness of insurance requirements in the act to ensure that titleholders are in a financial position to comply with the new statutory polluter pays duty and other extraordinary regulatory costs that they may incur.

As I said, the coalition supports these amendments and is of the view that the offshore oil and gas industry can operate in a manner which allows it to grow without exposing either the workers or the environment to unnecessary risks. I know from my discussions with industry that this is an issue they are very engaged in and they are very keen to make sure that it works. We need to learn from the lessons of the past. We need to make sure that we have the right set of amendments and legislation to ensure correct and safe operation. But I think the onus is on the industry to go above and beyond the requirements of the legislation, to do everything they can to make sure the safety of their workers and the protection of the environment are paramount.

The thing that disturbs me and which continues to be exposed by this government is not the sorts of amendments they are making today, which we do support; it is what we saw in the budget last night, which continues to be a full frontal assault on the oil and gas industry and on the resources industry in general. The changes we saw in the budget last night may leave these amendments unrequired—that is, if this government were to be allowed to continue in its assault on the oil and gas industry, exploration and development of oil and gas offshore and onshore would basically grind to a halt. We saw last night some of the most short-sighted policy I have seen handed down by a government in my mere 14½ years in this place, perhaps even in my political lifetime going back probably three decades—that is, to make it more difficult, more expensive for multinational companies, which in the end are responsible for most of the oil and gas development in Australia, to invest here. When the oil and gas industry in Australia today is responsible for 30c of every private-sector dollar invested in Australia, it is beyond me why a government would be turning on this industry simply to desperately try to get dollars in to balance its wasteful spending.

The industry is currently investing around $200 billion over five years, which is around $1,200 per second. On top of the $200 billion it is investing, it will pay billions of dollars a year in royalties and taxes to the government and create more than 100,000 new jobs. On top of all that—if that was not enough—the industry is considering investing many tens if not hundreds of billions of dollars in future projects. So when we see a change in the thin capital rules that means it is now more expensive for companies to invest in those projects, we realise that this government really does not get it. On top of that, the government changed the exploration rules. The increases in costs associated with trading or buying exploration permits will be a further deterrent to investment in Australia. Everyone, surely, wants to see investment in Australia. Everyone, surely, wants to see the amendments we are discussing today being there for an industry that is thriving, prospering and investing in Australia, as well as growing jobs, growing exports, putting extra revenue into the coffers. The changes that were introduced last night by the government to both thin capital and exploration allowances was, as I said, the most short-sighted thing I have seen for a long time.

The coalition will continue to work with this government to ensure that offshore safety and protection of the environment is maintained. I had a very fruitful and useful working relationship with the previous minister, Minister Ferguson. I thank him and congratulate him for what he did for the resources industry in Australia. His replacement, the Minister for Resources and Energy and Minister for Tourism, Minister Gray, is someone I have known for a long time through the corporate sector prior to him coming into politics. I have the absolute confidence in him that I had in his predecessor. I wish the minister well. I look forward to working with him over the months ahead. The outcome of our cooperation will be to the betterment not only of the industry but also of the community of Australia and better for jobs in Australia.

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