Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

I would like to take this opportunity to speak to what I would certainly classify as another climate change related bill because of my interest in this area but also, importantly, because of the impact climate change has on my electorate. Corangamite and its surrounding area is one of the areas most affected by climate change—economically and in a geographic sense. The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and cognate bill respond to the amendment of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003. The amendments can be described as technical and minor policy changes to one of the biggest policy issues confronting us today.

The bills streamline requirements, provide clarification and reduce the overall regulatory burden on the industry. That, of course, is very important. Whilst we absolutely have to bring about change to reduce climate change, we also have to bring about change that does not bog down the industry in regulatory regimes where people and industry end up being mired in red tape. Measures to address climate change have to happen in a fast and efficient way. It is worth noting that it would be very easy to get bogged down in excessive regulation. We are dealing with a relatively new industry when we talk about greenhouse gas storage. We are talking about significant infrastructure—hundreds of millions of dollars of investment in pipelines and the like—and we want to make sure that the regulatory environment is simple and easy to follow, with clear regulations. So with these reforms we are setting up the necessary framework to provide business with what it wants, which is clarity and certainty when it comes to regulation.

The changes proposed here come from three different aspects of work undertaken by the department over a period of time. There are no adverse impacts on the industry when it comes to these bills and I do not believe there are any additional costs. A number of the changes relate to alternative arrangements for pipelines commencing from 1 January. These arrangements will be set out in revised regulations to come into effect next year. Pipelines are being treated on the same basis as other facilities under the safety regulations. This will see the removal of the pipeline management plan and the pipeline safety management plan from the regulations. The removal of consent to operate a pipeline is a part of the overall changes which will take effect from 1 January 2010.

There are several other changes such as providing an expedited consultative process on the granting of access authorities and making the joint authority the decision-maker in relation to the declaration of locations and the granting of scientific investigation consents, designed to streamline current arrangements. Moving the power to vary coordinates based on the current datum, from regulations into the legislation, will streamline the regulatory processes. Other changes are to remove several inconsistencies and ambiguities arising from amendments made in the Senate.

These bills provide clarity and, for some, simplicity in the regulation of a new industry. It is likely that some greenhouse gas storage activities will take place in my electorate of Corangamite and right along the southern coastline of Victoria. I note the member for Gippsland, who has significant petroleum not far from where he lives. In my view, carbon capture is not a silver bullet that will resolve the carbon pollution problem that we currently face. But it may be an important step in helping with carbon pollution abatement for the period ahead in which we rely upon coal whilst we move to more sustainable energy generation processes. This legislation is integral to making sure the framework exists to develop and implement this important carbon capture and storage process. Doing nothing, which many might suggest is the right way to go, is a risk that I believe will threaten our economy and, of course, our sustainability.

In my electorate, areas such as the Great Ocean Road, the surf coast and parts of the Bellarine Peninsula surrounding Port Phillip Bay will be adversely threatened by sea level rise. As I said earlier, I want to again put on the record a few important facts about my region and the effects of climate change. The Great Ocean Road is an icon of Australia and the engine room of our local tourism economy and will be largely impacted by sea level rise. It will be breached in many places if sea level rise does take place, as we expect. Huge swathes of the Bellarine Peninsula will be inundated. Current areas of the mainland will be cut off, forming a ribbon of islands, particularly in the Queenscliff, Point Lonsdale, Ocean Grove and Barwon Heads area where there are parts of that coastline. Also, there are private properties that will reside in harm’s way if there is sea level rise. Key public infrastructure facilities such as caravan parks and other private properties will be inundated and lost. Many private homes will also be lost as a consequence of sea level rise. That is why it is important that we get the regulations and the operation right for greenhouse gas storage, because it is those climate change gases that we need to remove from our atmosphere to avoid the worst aspects of climate change and sea level rise.

In Victoria, particularly within my region, we are among the largest emitters of carbon dioxide and other greenhouse gases per head of population as a consequence of the nature of the industries that we have. It is important that we take advantage of the opportunities for offshore greenhouse gas storage to ensure that industries in my region and across the nation can take up alternative arrangements whilst we go about creating new opportunities from new industries. Victoria is very well placed to take advantage of this legislation. We have a very substantial gas industry, particularly off the Bass Strait, and I think there are significant opportunities for Victoria to play a role. I certainly wish the industry in Victoria and across this nation all the best in responding to these particular challenges. I commend these bills to the House.

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

I rise to speak in relation to the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009, which seeks to correct omissions in the act that came into effect last year and make a number of technical corrections.

The bill has been in development since 2005, under the previous coalition government, and has enjoyed bipartisan support. The act authorises the transportation by pipeline and injection and storage of greenhouse gas substances in deep geological formations under the seabed. I have spoken previously to offer my general support for this legislation and the process it seeks to facilitate, which is the sequestration of greenhouse gases, primarily carbon dioxide. In doing so, I made the point that the Gippsland Basin—and the member for Corangamite touched on this as well—is likely to play a critical role in the development of these new technologies.

For those who are unfamiliar with the Gippsland Basin, it is a major contributor to our nation, and the legislation has particular relevance to my region. The Longford gas plant, which is located about 10 kilometres from the city of Sale, is responsible for supplying most of Victoria’s gas requirements and about 20 per cent of Australia’s oil and gas supplies. I grew up in the city of Sale and I well remember the impact of the oil and gas industry when it came to my home town.

This year marks the 40th anniversary of the joint venture partners Esso-BHP and their work in Bass Strait. There was a function quite recently—on 29 April this year, as I recall—which was attended by the Minister for Resources and Energy and the shadow minister, to commemorate this occasion. It really was an auspicious occasion for the Gippsland region—the former member for Gippsland, the Hon. Peter Nixon, was in attendance, and I wish him well—because it marked a critical date in our community’s development.

It is hard to imagine the Gippsland region today without the discovery of oil and gas in the early sixties, such has been the profound contribution of the industry to the economy of the region and to the cultural and social life of the Gippsland community. Esso has been a longstanding benefactor of the community, with a range of donations to community and sporting activities, perhaps most notably the Wellington Entertainment Centre in Sale, which has been completed in the last few years.

I do not seek to give the House a comprehensive history lesson on the Bass Strait oil and gas fields, but it is important in the context of this debate. The offshore drilling began in 1960, when BHP was granted petroleum exploration permits. In 1967 Kingfish 1 was drilled and encountered Australia’s largest oilfield, with 1.2 billion barrels recoverable. By the end of 1969, 11 fields had been discovered and the first five were in production. After this initial phase of very high success rates, the new Esso-BHP discoveries were limited throughout the early 1970s to Cobia, Sunfish and Hapuku.

There have been many more wells drilled. Notably, though, West Tuna in 1984 was the last of the giant oil discoveries by the Esso-BHP joint venture partners. There have been several smaller discoveries since, and there are now 24 offshore platforms and installations in Bass Strait, which feed a network of about 600 kilometres of underwater pipelines and keep the oil and gas flowing 24 hours a day. While production will continue for many years to come, the depleted sections of the basin are of particular interest for carbon storage, the subject of the legislation before the House today.

I make these points to highlight my view that, when it comes to dealing with the complex issues and claimed impacts of climate change and when it comes to the government’s Carbon Pollution Reduction Scheme, Gippslanders have a very keen interest in the outcome. We are very much at the pointy end of this debate. They are our jobs that will be directly affected in the oil and gas industry, in agriculture and, most significantly, in the power industry in the Latrobe Valley.

As I indicated in my maiden speech, if we are prepared to give the planet the benefit of the doubt and we accept that climate change is real then we are going to need a strong and sustainable economy to deal with the challenges it presents. In my region there are forecasts of storm surges and sea level rises. While I may personally doubt the extent and veracity of some of those claims, if those scenarios are accurate it will cost billions of dollars to relocate public infrastructure and mitigate the damage in low-lying coastal towns.

I liken the issue to household insurance: I do not expect my house to burn down but I will take out insurance every year just in case. In relation to the climate change forecasts, I have some serious doubts about some of the claims but I am not prepared to rule them out completely and I am prepared to take action that is proportionate to the threat. My insurance in this regard is to support practical and sustainable action which is good for the environment, but I am not prepared to sacrifice our economic future in the process. We need to tackle these challenges from a position of economic strength, which draws into sharp perspective the reckless spending spree of the Rudd government. I fear the government’s debt and deficit binge has left the cupboard bare.

In relation to the legislation before the House, Gippsland will need to be at the forefront of research and development to successfully capture and store carbon in the future. As the technology is developed on an industrial scale, it is likely that Gippsland and the Latrobe Valley will be key players. Studies have shown that the Gippsland Basin has the capacity to store very large volumes of carbon dioxide. In the context of the brown coal industry, there are obviously enormous gains to be made in the future, but it will take time; it is not going to happen overnight.

What concerns me is the enormous rush with which the government is trying to ram through its flawed CPRS legislation. I do not believe there has been enough time to explain the potential impacts on regional communities. As I have said before in this place, carbon capture and storage may be the big ticket item which provides the answer to the issues facing the brown coal power generators but we are several years away from achieving the desired result. I agree with the previous speaker, the member for Corangamite, when he said it is not a silver bullet. I believe there will be a suite of solutions. I am very confident in the capacity of engineers and scientists at work on finding technology-based solutions for many of the challenges we are facing from climate change.

I do not believe it is in anyone’s interest to jeopardise the economic viability of the power generators in Latrobe Valley by moving too fast or by placing too heavy a burden on their operations. I note the presence of the Minister for Resources and Energy in the room. It was great to see the minister in Longford for the commemoration of the 40th anniversary of the Esso-BHP joint venture partners’ activities. I have met with the power generators in Latrobe Valley and I understand the government has too, but was anyone actually listening on the government’s side of the table? Was anyone actually listening to the concerns that were being raised by the generators?

Let me set the scene for House about the importance of the power industry in Latrobe Valley. It is the most important industry in the region, bar none. Latrobe City commissioned an independent report into the economic importance of the Latrobe Valley coal and electricity industry. It reported back in August last year and it makes quite compelling reading. As a local member, I fully understand the significance of the following figures. It is estimated that the value added in Latrobe City from the coal and electricity industry sectors is $802 million per year, or 21.2 per cent of the gross regional product. There are 125 people employed in the coal mining sector and 1,705 people employed in the electricity supply sector. The flow-on impacts of such a major industry is obviously very significant to the entire region in terms of the training opportunities it provides to young people and the contracting opportunities for the private sector. It is just a critically important industry for the future of our region.

We have a vast reserve of brown coal in Latrobe Valley and it has underpinned the economic growth of Victoria. We are proud of the contribution the Latrobe Valley has made to the wealth of this nation and it is vital that it is allowed to continue in the future. One of the frustrating aspects of the debate on climate change is that the pride in our achievements in providing a base load power supply to the community over many decades has now been eroded to some extent. The media coverage of Latrobe Valley smokestacks on a nightly basis is actually quite disappointing for the people who live in the community. They are very proud of the contribution they have made to making Australia the great nation it is today through the supply of a cheap and reliable form of energy. I continue to encourage my community to be proud of their achievements in the past and to also look forward with confidence in the future. It is a cautionary note for the government, I believe, in how it handles the issue of climate change in the communities which I believe are being portrayed unfairly as the villains in the whole debate.

The shadow minister touched on the many of the issues that have been raised by the Energy Supply Association of Australia in its negotiations with the government regarding the issue of the CPRS and the legislation before the House. The association says there are four critical issues which are not adequately addressed in the current CPRS design. I will not go through them all in complete detail but the essence of their arguments relates to that need for certainty in the ongoing financial viability of the existing assets. In an environment where there is global economic uncertainty and the generators are seeking to refinance billions of dollars to continue their operation, there needs to be sufficient information for investors to commit to long-lived capital assets.

The industry is trying to engage with the government and so is the opposition. We do have time to get this right and the government must take the time to fully inform the community about the impact of this legislation. For example, the CEO of Loy Yang Power, Ian Nethercote, has cautioned that previous reports could be seriously underestimating the real impact on electricity prices. There is a lot riding on these very complex issues around the CPRS and the legislation before the House today. We must not get ahead of ourselves and place Australian jobs at risk.

Just last month we had the release of one of the most alarming reports yet about the impact on jobs. The report, Securing SMEs in Australia’s low carbon future, should be ringing alarm bells across the nation, particularly in regional areas. I am concerned that we have not had a single word of caution from those opposite, particularly from the regional MPs. The member for Charlton, and now the Minister Assisting the Minister for Climate Change, Mr Greg Combet, seems to have undergone a complete transformation. Once the great champion of working families, now he stands in this place and very rarely mentions the impact of the CPRS on jobs, particularly in his own community.

I am concerned that regional Labor MPs in the coalmining seats are silent on this issue. There is not a peep out of them. It is the silence of the lambs. It is as if some of them are told: ‘Come here, turn up, sit down, shut up and vote when we tell you to.’ I am very disappointed that some of them are not prepared to at least raise the concerns that their regional constituents are putting to them. I have a completely different view about my role as a representative of a community which has a strong dependence on the coal industry and brown coal fired power generators. You cannot come here and be the Marcel Marceau of government. You need to get up and speak out on behalf of your constituents.

If we rush down the path of the Rudd government’s model, we run the risk of sending our jobs overseas to countries which do not have an emissions trading scheme, and our economic circumstances will deteriorate. We must stand up for jobs in our regions. We need to be in a position of financial strength to mitigate any impacts of a changing climate. I fear that under this government’s current approach we will be sending jobs overseas and there will be an increase in total global emissions at the same time. We will be poorly placed to undertake mitigation measures if they are ever required.

I will go back to the report on the CPRS and its impact on small and medium sized businesses. This report is independent. It was released by the Australian Chamber of Commerce and Industry. As I said, the findings are alarming. I will quote a couple of the key results. The report states:

Our findings show that the CPRS will generate additional costs that would erode firm profitability at marked levels of between 4 to 7 percent on average. In some cases, we found that the impact of additional carbon costs could erode firm profitability entirely. Erosion of firm profitability at these average levels could be significant enough to change investment incentives.

It further says:

Over time, relatively higher domestic transport and freight costs will stimulate a geographic realignment towards increased urbanisation and reduced rural and regional economic activity.

…       …            …

The anticipated geographic realignment may create second- and third-order effects that increase the economic impact from covering transport fuels in the CPRS. For instance, structural unemployment is likely to rise due to a draining of economic activity from more remote regions.

As I said, there are some alarm bells in these comments from the ACCI. The reflection on increased urbanisation touches on an issue that I believe is probably an unintended consequence of the government’s handling of the CPRS. But it basically warns that we risk a depopulation of regional Australia. I, for one, would hate to see that happen. Judging by the actions of some Labor governments at state level and the federal government’s handling of issues such as the water buybacks, I fear that the view is that it is much easier to manage a population if they are not living in rural and regional locations. It is a real concern for all MPs from regional localities.

I will now reflect on a report that came directly to this place through the Senate Select Committee on Climate Policy. The recommendations enclosed within its report also reflect heavily on the legislation we have before the House and the opportunity we have to take the time to get this right. Among its recommendations, the Senate committee on climate policy’s report makes the point very clearly that there is a need to accurately model the impact of the CPRS in the context of the changed global financial circumstances and the impact they will have on individual regions. The committee says:

The committee considers the modelling undertaken by Treasury to be inadequate and recommends that the Government direct Treasury to undertake further modelling.

It lists a whole range of areas where modelling is required. It goes on to say:

The committee recommends that the CPRS legislation not be passed in its current form.

Obviously, that was prior to the CPRS legislation being knocked back, in the previous sitting weeks. But I think it is still relevant when we look at what is going to happen in the next few months. We are looking at what technology or opportunity is there for climate change mitigation. We also need to look at how this is going to play out in the world scheme of things. Do we wait until we get some indication from the global community in relation to where it is prepared to move on total global emissions? I would certainly suggest that we should be waiting and taking the time to get it right.

I call on the government to commission the modelling on the impact on individual regions that is referred to by the Senate committee report. I fear that without that modelling we are flying blind. I also fear that we are misleading our communities by not telling them what the true impacts are. There is a general consensus in the community that there is an issue with climate variability. Call it climate change or call it what you like, but there is a general acceptance in the community that looking after the environment is a very important initiative and something that we are all very conscious of. But I do not believe that we have ever actually come clean with the community and told them what the costs are going to be or what the real impacts are going to be for some of the regional communities. As I said earlier, the Gippsland and Latrobe Valley region is very much at the pointy end of any decisions that are made about our agricultural industries, the oil and gas sector and the power sector.

I believe we need to keep a very firm sense of perspective in this debate regarding these issues of energy security and, in the case of the legislation before the House, regarding carbon capture and storage technology. Given that our nation’s contribution to global greenhouse gas emissions is less than two per cent, we need to be extremely mindful of the international effort. How far is the international community prepared to go in partnership with Australia? I believe that any policy which results in job losses in my region will have an adverse impact on every part of community life. The government must take time to accurately model the likely impacts and come clean with the Australian public. We need to be telling Australians what the costs will be in terms of potential job losses, energy prices, fuel prices and the overall cost of living.

I am concerned that the Prime Minister stands in this place and talks about saving Kakadu and the Great Barrier Reef, but he never talks about the cost. It is a ridiculous proposition in any case. As if Australia acting alone can actually achieve anything that will come remotely close to saving Kakadu or the Great Barrier Reef given our total contribution of less than two per cent to total global emissions. It is farcical for the Prime Minister to stand in this place and make those claims. We cannot act alone if we are serious about trying to save these icons, if indeed they are even jeopardised—and that is a whole different argument we can have.

The community accepts that we need to take action, but acting alone and ahead of the world without any global commitment to the reduction of emissions is a farcical situation. I call on the Prime Minister to start being more honest with the Australian community about what can really be achieved by Australia taking action in this manner and what the costs will really be. It may be sacrilege for those opposite but there are many people who have a more pragmatic and practical approach to this issue and they do not blindly extol some of the virtues of the extreme green religion. They are prepared to act prudently and not sacrifice Australian jobs in the process. I would rather see this debate focus on the issues which all Australians can support rather than this juvenile typecasting of being either sceptics or true believers.

There is overwhelming sentiment and goodwill in the community for action to protect and sustain the environment for future generations to enjoy some of these great attractions that we have across our nation. There is no question that Gippslanders are no different from other Australians in this regard. We are passionate about our local environment. We have magnificent beaches, forests and local waterways. We are very practical people and we have thousands of people involved as volunteers in groups like Landcare who are getting their hands dirty and doing the practical environmental work that is required despite the cuts in funding by the Rudd government. It was amazing to listen to the Minister for Agriculture, Fisheries and Forestry in this place yesterday shamelessly promoting the 20-year anniversary of Landcare, yet not even referring to the massive cuts in the number of Landcare facilitators across Victoria which have occurred on his watch.

As I mentioned in my previous contribution to the House, the real practical environmentalists are in our regional communities. Farmers and landholders are investing in whole-of-farm plans to reduce nutrient run-off into local streams and undertaking a range of practical works. We have many industries that are interested in technology to clean up their operations. I think the brown coal power industry will obviously be partners in anything that comes out of the legislation before the House today. But there is still a great deal of confusion about climate change and the government’s proposed response with the emissions trading scheme. We do need a proper debate and a fair, open and honest debate in language that people can understand exactly what we are talking about.

I refer to the contributions of other members in relation to this legislation, particularly the member for Werriwa, who pointed out that there will not be just one approach to these very complex issues. I agree wholeheartedly. To use country parlance, I suggest that there is more than one way to skin a cat. There will be a suite of measures required in terms of carbon capture and storage, storing more carbon in the soil and developing all the renewable energy forms, which have general support of the House given the passage of the RET legislation quite recently. Just like the member for Flinders who spoke extensively about a range of other options for sustainably managing the environment, I believe there are many options which need to be fully explored in addition to this carbon capture and storage legislation. We need to be acting responsibly, and in my mind that includes protecting our energy security and our baseload power supply from the Gippsland-Latrobe Valley region and acting in a way that protects jobs in the future for the Gippsland community. I commend the previous speakers and the minister for his interest in the legislation. His attendance in Gippsland earlier this year was much appreciated by the community. I also commend the former minister for the work that he has done in this area. I thank the House.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

The honourable member for Gippsland made a speech here and there, not facing up to some of the real problems. I would just like to point out to him that, whereas the Howard government did not do anything, this government has put $2 billion on the table to try to find some solutions. He talked about his own electorate and the significance of his own electorate, but there was nothing about helping to protect and look into the future for the coal and gas industry.

The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009 propose to amend the Offshore Petroleum Greenhouse Gas Storage Act 2006 and the Offshore Petroleum Greenhouse Gas Storage (Safety Levies) Act 2003. They have been introduced as a result of recommendations from the House of Representatives Standing Committee on Primary Industries and Resources report entitled Down under: Greenhouse gas storage, which was on the review of the draft of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill. I commend the minister, who is with us, for giving the committee the opportunity to do that work. I think the parliament and the country are well off for that look at the legislation occurring. It is a shame that more of the legislation that comes before the parliament does not get to the committee system. I think we would have better legislation if it did.

During the inquiry the committee looked to ascertain whether the bill established legal certainty for access and property rights for the injection and long-term storage of greenhouse gases in offshore Commonwealth waters, which of course is pretty significant for the Gippsland electorate and the offshore areas of it. I commend the honourable member for Gippsland for taking an interest, but I think he should get totally behind these bills and totally behind the issue of solving the problems of greenhouse gas storage. Eighty per cent of the energy of Australia comes from coal, and we need to make sure that we have the solutions and can take advantage of the opportunities that coal presents our country.

The legislation seeks to provide a regulatory framework and regime that will enable management of GHG injection and storage activities in a manner which will respond to community and industry concerns. It will provide a predictable and transparent scheme to manage the interaction between GHG injection and storage operators with pre-existing and co-existing rights including, but not limited to, those of petroleum and fishing operators, should these come into conflict. It will also provide certainty for investment in injection and storage activities as well as establish a legal framework that provides a model that can be adopted nationally.

The amendments are technical, with some policy changes which streamline requirements, provide clarification or reduce the overall regulatory burden on industry. These changes result from three reviews of different aspects of the offshore petroleum regulatory system which have been conducted by the Department of Resources, Energy and Tourism over the past two years. I must say that I am impressed with the minister’s grasp of the technical side of these bills. It is an area that is very complex.

A number of the changes relate to altered arrangements for pipelines—which, I understand, commence on 1 January 2010. These arrangements will be set out in revised regulations to come into effect next year. They will see pipelines being treated on the same basis as other facilities under the safety regulations. This will see the removal of the pipeline management plans and pipeline safety management plans from regulations. As such, the pipeline safety management plan levy will become a safety case levy. This change in levy arrangements is set out in these bills, with amendments to both the Offshore Petroleum Greenhouse Gas Storage Act 2006 and the Offshore Petroleum Greenhouse Gas Storage (Safety Levies) Act 2003. The removal of consent to operate a pipeline is part of these overall changes and will also take effect from 1 January 2010.

There are several other changes such as providing an expedited consultation process on the granting of access authorities and making the joint authority the decision maker in relation to the declaration of locations and the granting of scientific investigation consents. These are designed to streamline current arrangements. Moving the power to vary coordinates based on the current datum, from regulations into the act, is also to streamline regulatory processes. This should not slow down the decision-making process by making decisions on the nomination of blocks and declaration of location joint authority matters. These amendments create a consistent and agreed approach on what is a key matter in the development of a petroleum title. I understand from discussions that the ‘datum’ consists of the coordinates of the title and they move in a very slow, small way. But over time, and some of these leases go for decades if not more, then the boundaries of the leases change, thus these amendments deal with these changes.

The changes to the greenhouse gas storage provisions of the act are to remove several inconsistencies and ambiguities arising from amendments made in the Senate. These changes are purely technical and make no policy changes to greenhouse gas storage related operations. I believe these particular changes came about after the Senate made some amendments in the legislation’s passage through that place and, in the interests of bipartisanship, amendment (13) just tidies up the language to make the provisions operate more properly. So the change to penalty provisions in schedule 3 of the act is to make sure that offences can be successfully prosecuted. As they stand, the provisions may mean that intent needs to be proved in order for a prosecution to be successful. This is a difficult task for health and safety provisions. The amendments will remove the need to prove intent. Removal of data management plans and changes to the timing notification of a petroleum discovery reduce some of the regulatory burden on industry.

A few of the other amendments are to make processes clearer or provide national consistency. These include ensuring that any occupational health and safety offences that occurred from 1 January 2005 until the act came into force on 1 July 2008 are covered by transitional provisions, that Western Australian petroleum legislation is included in schedule 3 of the Administrative Decisions (Judicial Review) Act 1977 Act and that the maps in the act are updated to show Australia’s new offshore boundaries.

This legislation sets the groundwork for the establishment of a national GHG storage industry in Australia. If these go through successfully with the amendments that tidy the whole thing up, it will allow us to lead the world in the implementation and development of the CCS. A GHG storage industry can only be successful, both commercially and in the mitigation of CO2 emissions, if the technology to capture CO2 is implemented widely. Since the majority of our emissions derive from the coal fired energy generation sector, it is important that this sector begins to make faster headway with regard to capture. It may mean that industries reliant on carbon-intensive energy sources will only remain viable in the long term if they invest in CCS technology. I also think that some of these amendments will help the minister with initiating independent inquiries into operational issues such as the blow-outs that occur within the sector, such as the problem that is occurring in the East Timor Sea with the West Atlas rig, which has had a blow-out. I commend the minister for his efforts to resolve that issue and for his efforts to make sure the environment is affected in the least possible way. I certainly hope that this legislation brings us to a position where we can make sure that we have the powers to investigate and look at the reasons why these issues occur. I believe this legislation will take us into a whole new area of greenhouse gas storage and will encourage investment in the new technology. I commend the bills to the House.

Bill Shorten (Maribyrnong, Australian Labor Party, Parliamentary Secretary for Disabilities and Children's Services) Share this | Link to this | Hansard source

I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and a related bill, and in particular on the amendments that the government plans to introduce to allow quick and independent inquiries into operational incidents which occur in offshore petroleum facilities. These incidents can lead to disruptions in the supply of energy, to environmental damage and, most significantly for me, to injuries and deaths amongst offshore workers. These amendments will enable thorough investigation of incidents and allow governments, regulators and the oil and gas industry to learn why they happened and how they can be prevented.

This government has done more to deal with issues in terms of offshore petroleum health and safety than its predecessor. My old organisation, the Australian Workers Union, has been involved in the forefront of the fight for health and safety for their members, along with the right to a fair wage and the right to negotiate collectively. Its members, including current national secretary Paul Howes, Victorian secretary Cesar Melhem, Rod Currie, Terry Lee, John Clarence, Dave Healy, ‘Red’ Turner, George Parker, Dennis ‘Thomo’ Thomson, Yossi Berger, Colin Fisher and Tony McDonald have all spent many years promoting the issues that are being partly dealt with in these amendments.

I have seen the devastation and the irreplaceable loss that happens when a person in the prime of life does not return from a day at work. The grief of their family is endless. They will never let a day pass without asking, ‘What if?’ or ‘How could this be allowed to happen nowadays?’ Too often we have seen the technology and the expertise to create safer workplaces but what is lacking is the will. The fight to ensure that workers return home from their shifts on a rig with their health intact is one which relies on strong regulation and cooperation across all parts of the industry. I believe this bill will establish inquiries that will save lives. In Australia in recent times we have seen two incidents at least, the Varanus Island gas explosion in 2008 and the Montara oil field leak, that will require this kind of investigation. The recent joint executive inquiry into the Varanus Island gas explosion continues to be held up, I believe, by legal action. It is clear that the current model does not let us get a complete picture of the matters surrounding this incident.

The Varanus Island explosion thankfully did not cause loss of life but it did cause huge disruptions to the supply of gas in Western Australia. However, we only need to look overseas to see the potential dangers of incidents at offshore facilities. Just after 9 pm on 6 July 1988 in the British North Sea, offshore and onshore health and safety changed forever. After the Piper Alpha disaster, no-one could any longer say that they did not know that productivity too often pushed safety matters into the background. One hundred and sixty-seven offshore workers were killed by a series of explosions that ripped through oil production platforms in the northern sector of the British North Sea. The death toll was aggravated by ineptitude, complacency and a lack of leadership. Emergency lighting failed. Hardly any torches were available to the crew. Each of the lifeboats was located in the same section of the platform which also happened to be inaccessible, and no provision had been made for an alternative escape route to the sea. Most people on that platform gathered at the emergency muster point, the accommodation module, which due to its location above the gas compression module also happened to be one of the areas of the platform most exposed to fire and explosion. The accommodation module, constructed from wood and fibreglass, quickly began to burn. The water deluge system, the platform’s main defence against fire, failed. Two life rafts failed to inflate. The standby safety vessel, a converted fishing boat, had no medical supplies to treat survivors that were pulled from the sea, and the Tharos, Occidental’s state-of-the-art floating fire engine, could not muster sufficient water pressure to reach the flames. Those who ignored the company’s emergency procedures and management instructions and sought their own escape routes actually improved their chances of survival.

Occidental’s senior management had been warned by their own consultants that the platform would not withstand prolonged exposure to high-intensity fire. It was a warning that they chose to ignore after conducting a cost-benefit analysis. Managements on the other platforms connected by the same pipeline chain, the Tartan and the Claymore, declined to shut down production until they had approval for a costly closure of the pipeline from senior management onshore. As a result, the blaze was fed with oil until the order for closure belatedly arrived. The lessons of this tragedy were still not learnt or, if learnt, not acted upon when, in 2005, an incident at the BP Texas City refinery killed 15 workers.

Offshore platforms are intrinsically vulnerable workplaces, and we must never forget that. Minimally, every platform manager ought to be compelled to have a good knowledge of such catastrophes or they simply will be repeated. Each platform must have an effective health and safety committee and a good number of highly trained OH&S trained workers’ representatives on each shift. We need everything we can get if we are to stop another catastrophe.

The recent incidents in Australia have demonstrated that existing investigatory powers are not sufficient. An inquiry for the purposes of determining the operational, human and regulatory factors that contribute to serious incidents or ‘near misses’ would inform regulators and operators. I sincerely hope—and I support the work that is being done at NOPSA—that the age of our offshore helicopter fleet, which services the rigs and carries workforces to and from them, remains uppermost in the minds of our safety regulators. Helicopters, in my experience, are repeat killers in offshore tragedies. The Rudd government intends that the findings of any such commission of inquiry will be made public, subject to the disclosure and privacy provisions of other legislation. This will enable the lessons learnt from the incidents to be considered and understood by as many organisations as possible, both in Australia and overseas.

Following the Beaconsfield tragedy, there was a study of 12 royal commissions into workplace disasters, including offshore disasters, and the research demonstrated that the royal commission findings and commissions of inquiry findings were consistently the same—the problem is that we simply forgot the lessons. So the struggle for safer workplaces is one that never ends. We also need to act to shore up the gains made in the past and improve safety in the future. As I have said, it is often a struggle of memory against forgetting—remembering the lessons learnt and the lives lost. It is a struggle against the slow spread of complacency and the temptation to take shortcuts in this most important and wonderful of industries. I believe that, in a world where we can beam pictures back to earth from the surface of Mars, create machines scarcely bigger than atoms and unlock the mysteries of the DNA code, it should not be too much of a challenge to improve safety in the offshore hydrocarbon industry.

This bill and the amendments being proposed, with the ongoing proactive leadership of our Minister for Resources and Energy, are a step towards a more sensible and effective way of responding to offshore incidents, and I commend it to the House.

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

in reply—Firstly, I would like to express my appreciation of members on both sides of the House for their constructive contributions to the debate on this bill, the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009, which is highly technical in nature. As members have detailed to the House, the bill seeks to make minor policy and technical amendments and, importantly, reduce the regulatory burden on the offshore petroleum industry—a key sector of the Australian economy—as well as streamline and clarify administrative processes. The amendments also remove ambiguities and make some minor technical corrections. Before going to some of these issues, I would like to touch on a range of issues discussed by members during their contributions to the debate.

In this House, unlike the other house, there is broad support for carbon capture and storage. That is because I think it is appreciated that, whilst there are differences between the government and the opposition on how we put a price on carbon in place, it is understood that technology created the problem and it will be technology that provides the solution. Carbon capture and storage is the intent of the legislation before the House. It clearly represents a major challenge in the same way in which other parts of the government’s clean energy strategy represent a major challenge.

The government is not putting all its eggs in one basket. We have to invest in a wide-ranging basket of technological breakthroughs for the purposes of moving to a low-emission economy. Central to that is not only carbon capture and storage, which is part of our broad-ranging clean energy strategy, but also, for example, our Solar Flagships program aimed at achieving potentially the biggest investment in solar energy in the world. Clearly, our objective through that program and also the introduction of a renewable energy target side by side with our renewable energy program is to make a breakthrough on what is best described as reliable baseload energy. That effectively means, in the renewables sector: solar thermal, potentially geothermal, perhaps biomass in some areas or, alternatively, a breakthrough on wave power.

So I simply say that from the Australian government’s point of view we understand that there is a huge challenge ahead of the Australian community, but it is also our responsibility as a well-endowed community to invest in solving not only our own problems but also the problems of the global community because we are a major exporter of coal. I therefore complement the Prime Minister for the establishment of the Global Carbon Capture and Storage Institute, which is well supported by a range of nations and, importantly, well supported by industry.

The bill before the House to which I will seek to move amendments is about putting in place a regulatory framework that creates an opportunity for investment in carbon capture and storage in Australia. There was some criticism from the opposition about the cost of these programs and that potentially more money is required. Of course we would all love to be able to devote more money to technological change, but I remind the House that we are in the middle of a global financial crisis. Whilst the clean energy strategy and the potential investment in technology is part of our response to that, so was our requirement to assist in stimulating the economy through support for people on fixed incomes and families and our requirement to invest in infrastructure, including schools programs and road and rail networks around Australia. At least I can say that there is now a real financial contribution by government, in association with the private sector, with respect to the need to take this technology debate forward.

Putting that aside, I acknowledge the good support for the bill and the amendments, which I have discussed with the member for Groom, from the opposition’s perspective, as the opposition’s shadow minister. I also note the supporting remarks by the member for Hasluck and the support for the government’s action in releasing a retention lease discussion paper, which is underlined by the concept of ‘use it or lose it’, which gives a very strong message to some international petroleum companies that we are not going to have our resources warehoused whilst they develop resources in other places throughout the global community.

The member for O’Connor interestingly raised a question going to the safety provisions concerning negligence and their reference to ‘absolute liability’. Can I say in response to the member for O’Connor, who has always had a detailed interest in the petroleum industry, that the bill provides that the fault element that applies to the conduct and result elements of these offence provisions is negligence. Further, these provisions provide a regulatory regime that is enforceable and is consistent with fault elements of the Occupational Health and Safety Act 1991. The penalties set out for these offences do not change under these amendments and are themselves consistent with the Occupational Health and Safety Act and other Commonwealth legislation such as the Therapeutic Goods Act 1989. I ask him to consider that response because he did raise a genuine issue.

There was good support for the thrust of the legislation from the members for Werriwa, Flinders, Solomon, Canning and Corangamite. I also acknowledge the support for the bill from the member for Gippsland. I had the opportunity recently to attend the 40th anniversary of the petroleum industry in the Latrobe Valley, a highly successful industry with a terrific safety record.

In terms of the Latrobe Valley, if we make the necessary breakthrough in the development of CCS from a technological point of view—and I know this is an issue of concern to the community at the moment—the Latrobe Valley could potentially have a very, very bright future. The reason is that considering the issue of carbon capture and storage—and the government recently released potential leases for storage offshore in the Bass Strait—goes to the proximity of the Latrobe Valley to those storage areas offshore and the shorter distances for the purposes of the construction of the necessary pipeline infrastructure. One should remember that, in terms of potential storage, you also need to put in place necessary investment in pipeline infrastructure. The Latrobe Valley, whilst it represents a significant opportunity from a brown coal point of view, is also well placed in its proximity to storage areas to have a very bright future, provided that we make the necessary breakthrough on carbon capture and storage, and I am confident that we will.

I also listened with interest to the support for the legislation of the member for Lyons, who is Chair of the House of Representatives Standing Committee on Primary Industries and Resources. Not only do I appreciate his support; I also well understand his desire from a committee point of view for ministers to refer further bills to the House committee structure for proper consideration and amendment. I have a view that all too often the House has deferred to the Senate in the consideration of legislation. It is time that we again seize our responsibilities in terms of real work through our own committee structure not only on the legislation that is currently before the House but also on a range of other legislative proposals.

The member for Maribyrnong correctly raised a detailed consideration of the importance of occupational health and safety in this industry not only in Australia but also internationally. I am pleased to say that historically we have had an extremely good health and safety regime in Australia, but one can never be complacent. That will take me in due course to some amendments to this bill before the House later today.

I also give notice that during the committee stage I will be introducing government amendments to the bill which will address recently identified oversights in the greenhouse gas storage provisions of the act. The purpose of the amendments is to correct an oversight in the provisions establishing a process for enabling the responsible Commonwealth minister to give a direction to the designated authority with respect to the exercise of the designated authority’s powers to approve and register transfers of and dealings in petroleum titles.

I also give notice that during the committee stage—and I must say that I have discussed these with the shadow minister for resources and energy, the member for Groom, and I appreciate the opposition’s support—I will be introducing government amendments to the bill which will provide for a standing power enabling the responsible minister to appoint a commissioner to undertake a commission of inquiry into the operational, human and regulatory matters specific or incidental to a significant offshore petroleum or greenhouse gas storage incident. This power is limited to where a significant offshore petroleum or greenhouse gas incident has occurred and where it would be appropriate to consider operational, human and/or regulatory issues related to the incident.

The purpose of these amendments is to correct an administrative gap in the provisions of the act for the investigation of these matters. Recent incidents involving uncontrolled release of hydrocarbons jeopardising human and environmental health and essential infrastructure have demonstrated that the existing investigatory powers are insufficient. An inquiry for the purpose of determining operational, human and regulatory factors would inform regulators and operators of causal factors contributing to significant incidents relating to offshore oil and gas exploration, development, production, greenhouse gas storage and/or decommissioning. This power will enable the government and industry to learn from incidents and be better prepared to prevent similar incidents occurring in the future.

I thank members for their support and their thoughtful contributions to what is a complex debate. In doing so, I commend this bill to the House.

Question agreed to.

Bill read a second time.