House debates

Tuesday, 23 February 2016

Bills

Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2016; Second Reading

12:19 pm

Photo of Ian MacfarlaneIan Macfarlane (Groom, Liberal Party) Share this | Hansard source

I rise to talk about the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2016. As we all know, the oil and gas industry in Australia is of crucial importance in terms of not only our economy and jobs but also as part of Australia being an energy superpower and providing not only energy but also energy security to many of our trading partners. The amendments in this bill are required to resolve an issue in relation to an administrative oversight that has led to petroleum titles which are prior usage rights being renewed and extended under the Offshore Petroleum and Greenhouse Gas Storage Act 2006, the OPGGS Act, without the consent of the Minister for the Environment—as required under the Environment Protection and Biodiversity Conservation Act 1999, also known as the EPBC Act.

The oil and gas industry has acted responsibly at all times and this is merely an administrative oversight which we need to rectify. The department has contacted all affected titleholders and outlined the issues to them, and the joint authority members, delegates and APPEA have also been engaged and the issues have been discussed. It is important that at all times we have a structured and correct legislative framework. The industry is responsible and does behave in a very responsible manner, but we need to ensure that they are seen to be doing so and that the community has confidence in them doing so. It is important that the community has that confidence and also that there is transparency into the way these acts operate, both the offshore petroleum act and the EPBC Act. The confidence that Australians have in their resource industry is part of the success story that we have around the oil and gas industry.

The Department of Industry, Innovation and Science is developing a process and amending relevant protocols to ensure consent is obtained from the Minister for the Environment for any future decisions relating to the prior usage rights titles, and it has also commenced a broader review of processes relating to titles approvals. Later this year, it will also seek to progress further amendments to the OPGGS Act that will clarify the policy intent of the interrelationship between that act and the EPBC Act. So we have a situation where two government departments are already working closely together and have been for some time and, in terms of that process, we have seen a significant reduction in red tape and green tape. We have seen the establishment of NOPSEMA, the National Offshore Petroleum Safety and Environmental Management Authority, and the oversight that it provides the industry. There is not only the oversight; it also provides advice to industry to make sure it is compliant in terms of safety but, just as importantly, if not more importantly, also in relation to the environment.

There is confidence in investing in Australia in the oil and gas industry, which we all know is currently going through a very, very tough time. Globally, oil and gas prices are down, but the investment we have seen here will see Australia become the largest exporter of LNG in the world. Next week, I am hoping to travel with the shadow minister for energy and resources to Gladstone for the third commissioning of LNG plants. In that case, the LNG has come from onshore gas but the issues are much the same—that is, we need to ensure that we have reliability of production and supply but that it is done in a safe and environmentally friendly way. We need to continue to maintain that confidence from overseas investors. We need to ensure that these acts are executed in a way that delivers the outcomes that the government and the community expects but also that the industry has the confidence in. And we will continue to do that.

The Minister for the Environment has already presented this bill. I note that he has made comments that certain petroleum titles that intersect with the Commonwealth marine reserves have had their operating terms renewed without the consent of the Minister for the Environment. This oversight goes back to 2008. The industry understands this issue and is keen to have it rectified. So the minister has already introduced the legislation which I am speaking to today and the amendments will correct the administrative oversight.

The industry will continue to work with government to ensure that the legislation that they work under is world's best practice, an incredibly important factor in the confidence that not only the community expects but also the overseas investment community expects.

For a company to undertake activities within the title area, the applicant must attain approval from the independent regulator, NOPSEMA. But to continue operations when these titles expire after six years, the title must be renewed and extended, which is where the oversight came in. When they were renewed, the Minister for the Environment was not consulted correctly. To rectify the incorrect processing of these renewal or extension decisions as a matter of priority, the government will implement, with retrospective effect, amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to deem these decisions to have been properly administered and, therefore, to have full effect. As a result, legitimate activities within these title areas will not be affected.

No-one likes to see a mistake, or an oversight in this case, but we do need to fix it in a way that gives both the community and the investors in the oil and gas industry the confidence that we run a rigorous framework around the world and gas industry. Yes, we have had our incidents. But in terms of how the industry has operated as a whole over a very long period of time, I think our safety and environmental record is enviable. So the coalition is supporting this legislation. I understand the opposition will also be supporting this legislation. It is a case of ensuring that things are done absolutely correctly and I commend the legislation to the House.

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