Zali Steggall (Warringah, Independent) Share this | Hansard source

I rise to speak on the Offshore Petroleum (Laminaria and Corallina Decommissioning Cost Recovery Levy) Bill 2021 and cognate bill, the Treasury Laws Amendment (Laminaria and Corallina Decommissioning Cost Recovery Levy) Bill 2021. These bills will introduce a temporary levy on offshore petroleum production to recover the costs of decommissioning these oilfields and other associated infrastructure. Let's be clear: we should never be in this position. This is a responsibility of those companies. These oilfields, situated 550 kilometres offshore of Darwin, the LamCor oilfields, were first commissioned in 1999. At the time it was a $1.37 billion development that was projected to produce up to 180,000 barrels per day. Now they no longer produce any and remain in lighthouse mode. These bills stem from the disastrous decision in 2016 by Woodside and Talisman Energy to sell both the Northern Endeavour and LamCor oilfields to a small oil and gas speculator called Northern Oil and Gas Australia that could not afford to decommission it and in 2020 went into liquidation.

Announced in the 2021-22 budget, this bill will introduce a levy on the industry to recoup the almost $1 billion in costs that have been heaped on the taxpayer. It's ironic, coming from a government that continually talks about not wanting to introduce taxes, that, in fact, here is one. The levy will be set at 48 cents per barrel. This levy will fluctuate depending on how much cost is being recovered. The levy could go from 1 July 2021 to 1 July 2029 but will terminate when the costs have been recovered.

The real question is: why stop there? Of course, the industry is fighting this levy tooth and nail but will not find any sympathy from the border community for their plight. In fact, what we should have is this levy continuing. It's time the industry paid their way not just on this but on the other related issues like climate change and natural disasters. Earlier this year I talked on the bill that implemented the decommissioning framework for other ageing assets and the levy for the recoup of costs associated with the Northern Endeavour fiasco. The problems are the same. The decommissioning of oil and gas infrastructure will be a growing issue over the coming years. The industry has absolutely no problem in putting rigs in the ocean but it has serious difficulties in decommissioning safely at a minimum cost and taking responsibility for doing it. It's exacerbated by the industry struggling to find buyers for ageing assets as more investors are now conscious of the risks, climate or otherwise, of taking on such assets.

We know Risen Energy reported that the number of oil and gas wells waiting to be decommissioned will rise from 160 today to 440 by 2026. That is only four years away. Clearly this is a growing and looming problem. We need to make sure that the decommissioning of these rigs takes place in a safe and orderly way and that it is done with proper environmental conservation and clean up. And we know this is coming in coming decades. The cost of decommissioning should not be heaped on taxpayers. Invoicing the cost is substantial, and, ultimately, it is not their responsibility. It is the companies' and the government's for allowing these companies to have these rigs. We know that onshore and offshore decommissioning liability of the industry could be some $60 billion over the next 30 years. With Australia's net debt approaching a trillion dollars, we need to be cognisant more than ever of this cost, and it cannot be put on the taxpayer. Already we know that the cost of the consequences of the love affair with fossil fuel is put on the taxpayer. We need a permanent fund that will act as a backstop for the inevitable issues that arise with decommissioning.

Actually, the government needs to do more. We need a climate disaster levy to collect money from oil and gas companies that leave environmental destruction in their wake. It's currently the Australian taxpayer who foots the bill for all these climate related natural disasters. We know just this year it's $6 billion due to the floods on the east coast. We know the cost of natural disasters is projected to reach some $96 billion a year by 2060 under the current business-as-usual actions. That is over $1.2 trillion by 2060. This is one unfolding disaster after the next. Just in the course of this government it has been $10.3 billion on floods and bushfires alone.

It should not be up to the taxpayer to meet this cost. We need to start talking about a natural disaster or climate disaster levy to be put on those responsible. If we set a levy of $1 per ton of embodied carbon, we could raise a significant amount to offset these costs. The Australia Institute polling indicates 65 per cent of the public would back this sensible measure. But of course what we need to do is a stop expanding gas. We need to stop having more and more of these fields. If not, you are just dooming future generations to an ongoing crisis.

Locally, there is a strong community rejection of any offshore oil and gas. We push this government to reject once and for all the exploration licence in relation to the PEP-11 area from Newcastle to Manly for exploration of oil and gas. It's time we did this for all of our offshore areas, but the minister, a Nationals minister, can only see fossil fuels in our future. He wants to expand gas fields. The most ridiculous one is around the prime tourism area of the Twelve Apostles near Port Campbell on the Victorian coast. Of course he sees no trouble in expanding this to fossil fuel extraction. Developing this area will be terrible for the local economy and tourism, the climate and the local environment. It is adding fuel to the fire. So whilst I support this levy and this bill today to ensure that the cost of decommissioning these rigs is not imposed on the taxpayer but on the industry, it is time this industry pays its way and ensures it cleans up the mess it is causing.

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