Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Australia ' s success in the offshore petroleum investment market is underpinned by its comprehensive and well-established regulatory framework. Central to this framework is the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), a national regulator with the experience and technical capacity to effectively regulate in relation to matters of occupational health and safety, structural integrity, and environmental management.

In F ebruary 2014, the Commonwealth g overnment announced a new streamlined approach for environmental approvals for offshore petroleum activities. The approach makes NOPSEMA the sole environmental regulator for these activities in Commonwealth waters.

Streamlining has significantly increased regulatory efficiency in respect of petroleum activities in Commonwealth waters, as well as delivering clarity and certainty for industry participants.

Recognising these significant gains, the Commonwealth g overnment is seeking to streamline regulatory arrangements in respect of all offshore petroleum activities. As part of this process, the s tates and the Northern Territory are being encouraged to confer occupational health and safety, structural integrity and environmental management functions and powers upon NOPSEMA under their respective legislation in respect of those waters of the sea within their jurisdictional reach.

This would permit the s tates and the Northern Territory to benefit from the expertise and experience of an established national regulator, and increase the efficiency of the administrative process by minimising the number of regulatory agencies with whom industry participants must deal.

However, the Offshore Petroleum and Greenhouse Gas Storage Act in its present iteration includes a number of legislative impediments to conferral. For example, there is a requirement to conclude an intergovernmental agreement before conferral is permitted in respect of certain areas of the sea. In relation to others, conferral is not permitted at all.

The amendments in this b ill seek to remove these impediments, thereby permitting conferral across as wide a geographic area as possible.

This represents an important step towards the establishment of a single national regulator for all safety, structural integrity and environmental management matters in the offshore petroleum sector. Moreove r, it underscores this g overnment ' s ongoing commitment to the maintenance and improvement of a strong and effective regulatory framework, and to a cooperative approach to the regulation of offshore petroleum activities.

The b ill further makes a number of technical amendments to the administrative framework relating to the taking of particular voluntary actions under the Act and regulations by multiple registered holders of a single petroleum title.

Due to the high cost of offshore petroleum operations, petroleum titles are often held by a consortium of companies. The a ct at present provides a mandatory process by which titleholders may take an action, such as submission of an application or nomination, that is permitted, but not required, to be taken under the a ct or regulations, where there is more than one registered holder of the relevant title. Such an action is defined under the a ct as an ' eligible voluntary action ' . The process requires the holders of the title to nominate one of them to take eligible voluntary actions on behalf of the group, and only the nominated person can take an eligible voluntary action.

However, application of the process in practice has created some confusion among titleholders, particularly in relation to the mandatory nature of the process, and also identified several unintended consequences.

The amendments in this b ill seek to clarify the operation of the process relating to the taking of eligible voluntary actions and, importantly, provide an alternative process for the taking of eligible voluntary actions that titleholders may elect to use instead of the current nomination process. The alternative process would require all of the registered holders of the title to take the action jointly, such as by all signing the relevant application or nomination. The current nomination process will also still be available for use where a group of titleholders prefer this option. I commend this b ill to the House.

I would now like to take the opportunity to foreshadow another significant amendment to the act. As all present are no doubt aware, Australia's exploration and mining success is underpinned by its highly prospective geology, up-to-date geoscience data and comprehensive information systems. The custodian of Australia's geographic and geological data is the national geoscience agency, Geoscience Australia. As part of its core functions, Geoscience Australia has an ongoing responsibility to define the limits of Australia's maritime jurisdiction. Most recently, this work has resulted in a change to the boundary separating Commonwealth waters from the coastal waters of Western Australia. These changes, centred on the North Scott and Seringapatam Reefs, took effect from May this year. The revised boundaries around these reefs intersect three existing Commonwealth titles: one retention lease operated by Woodside Petroleum on behalf of the Browse joint venture, and two exploration permits operated by ConocoPhillips on behalf of the Poseidon joint venture. The maritime boundary changes mean that certain blocks previously falling within the jurisdiction of the Commonwealth now fall within that of Western Australia.

Our department is working closely with the Western Australian government to ensure the stable progression of the Browse and Poseidon joint ventures and to ensure the seamless and efficient transition of affected blocks from Commonwealth to Western Australian waters. This work has uncovered a gap within the Commonwealth offshore petroleum regime administered under the OPGGS Act. The gap will be of particular concern should a change to maritime boundaries in future cause an area presently within the jurisdiction of a state or the Northern Territory to fall within Commonwealth waters.

At present, there is no legislative mechanism enabling titles over affected blocks to transfer, with continuity of tenure, from the jurisdiction of the states or the Northern Territory to that of the Commonwealth following a boundary change. Instead, affected blocks become vacant acreage in Commonwealth waters and existing titleholders will lose title over those blocks. These titleholders may have already spent considerable sums of money and effort undertaking exploration activities under their title, and therefore titleholders should have continuity of tenure in the event of a boundary change.

While this will not impact current efforts in Western Australia, it is necessary to amend the act to anticipate those circumstances in which a future boundary change results in a gain of Commonwealth jurisdiction over the blocks. Given the ongoing nature of Geoscience Australia's effort to define Australia's maritime border, changes of this type are a realistic prospect. The proposed amendment will provide for the automatic grant of a Commonwealth title over affected blocks to the existing holders of a state or Northern Territory title at the time at which the state or Northern Territory title ceases to be in force.

The amendment is generic in nature and it is intended that it will provide a workable model for other jurisdictions to adopt. This will allow for consistency across Australia's offshore petroleum legislative framework, eliminate the sovereign risk created by future boundary changes, and ensure continuity of tenure for existing titleholders. I commend the bill to the House.

Debate adjourned.