Tuesday, 11 February 2020
Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019, Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures) Bill 2019; Second Reading
This is a highly technical bill but an important bill. The opposition will be supporting it, but I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House notes the Government's failure to adequately promote the development and commercialisation of carbon reducing technologies".
We know, if we're being honest, that often second reading amendments are designed to launch an attack on the government or highlight a failing. That's not my intention on this occasion. My intention is really to lament that more is not being done on the technology side of the equation to deal with the very serious challenges we have in climate change and the challenge of reducing our greenhouse gas emissions.
I don't propose to repeat the details of this bill. The minister in his second reading speech has laid out the intentions, objectives and details of the bill. Suffice it to say that this bill removes impediments to and facilitates the storage of greenhouse gas emissions offshore, largely by dealing with a number of state-Commonwealth jurisdictional issues and other legislative impediments. On that basis we support the bill, and I acknowledge the work being done by the Commonwealth and Victorian governments to further the important cause of offshore storage of greenhouse gas emissions. It is very, very important. Alone, of course, it is very small. I lament the fact that we're not doing more as a country in the area of technology in our efforts to reduce greenhouse gas emissions.
It is interesting that, given that we spend so much time in this place, both here and in the Senate, in our various media interviews et cetera talking about the challenge of the changing climate and the need to act meaningfully in making our contribution to global efforts, we spend very little time talking about it in this chamber. That is somewhat strange. It should change. If we're going to identify it as such a significant challenge, and it is, and as such an important challenge, and it is, and a challenge so in need of a response, then we should be talking about it more in this place. We should be talking more on an economy-wide basis. We should be talking more about mitigation on an economy-wide basis.
At the moment, we don't really have a carbon constraint. We have a safeguards mechanism, which is very soft and very ineffective. Since the government gave up on any form of a NEG, then that's it in this country. On electric cars, we're way behind the rest of the world. Carbon capture and storage has had its funding cut by this government and is behind the eight ball. In forestry we could be doing more on abatement, if the government would only change the water rule and allow investment to flow further into plantations. There is so much more, such as in hydrogen. I know we've had the Finkel report, and I know the government is doing some things to further progress the opportunities the hydrogen sector presents to us, but, still, we are moving at a snail's pace.
I thought that, if there were an issue that called upon bipartisanship, it would be this one. We've been in climate wars for almost all of the time I've been here, and that's a long, long time—for at least two decades. The community is crying out for us to do something collectively, and I think it's pastime we put those wars behind us and found some bipartisanship, a political sentiment, on this issue and acted meaningfully. I think that we would be well rewarded in all sorts of ways by the Australian community, including in the area of our own credibility in our community.
We need economy-wide action. We need at least as much focus on technology as we have on mitigation. We need more focus on abatement. We need to be spending as much time on abatement as we spend on mitigation. There are opportunities here. We extend together a hand of bipartisanship here. Let's not be so reliant on the mitigation side, as important as that is. Let's continue to work on the adaptation side. Let us get focused on the wonderful opportunities we have in the technological area. Sadly, in the past we've seen this government attempt to abolish the Clean Energy Finance Corporation and abolish ARENA. I've said they've cut the funding to the carbon capture and storage program. I think it's time for the government to rethink its approach and get some money flowing into these programs—the sort of money we need to make them successful and to allow us to strut the stage as a small country, sure, but as a country that's leading the world on climate change action.
The original question was that this bill be now read a second time. To this the honourable member for Hunter has moved as an amendment that all words after 'that' be omitted, with a view to substituting other words. The immediate question is that the amendment be agreed to. Is the amendment seconded?
I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-Boundary Greenhouse Gas Titles and Other Measures) Bill 2019 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures) Bill 2019, with mind to the fact that the world is moving towards a carbon-neutral future and we, in Australia, need to be on the front foot to lead the way in new technology to get there quicker.
There are two parts to these bills. The first is that the Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-Boundary Greenhouse Gas Titles and Other Measures) Bill 2019 amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006, OPGGS Act to enable title administration and regulation of a greenhouse gas storage formation that straddles the boundary between state and Northern Territory coastal waters and Commonwealth waters. It is bills like this that will help Australia lower emissions and facilitate carbon capture and storage that will benefit the environment and create jobs. This is economically sound climate action.
The world economy is transitioning to a carbon-neutral future in a bid to protect future generations from the effects of climate change. Most countries with the strongest ambitions for a carbon-neutral future rely on more renewables and other technologies, such as hydrogen and other technologies, to get there. As a smart country with willing citizenry, we are poised to identify new economic opportunities for Australia, particularly for technologies providing storage and backup to the electricity, industry and transport sectors. Last year the Morrison government led the National Hydrogen Strategy and increased our commitment to $500 million to support the development of this new industry, to ensure a sustainable, competitive and commercial hydrogen industry that will benefit all Australians and will be a major global player by 2030. The Chief Scientist, Alan Finkel, calls it 'shipping sunshine in a bottle'. The second half of this legislation ensures greater powers for the National Offshore Petroleum Safety Environmental Management Authority to respond fully during any oil spill emergency. Australia's natural resources mean it could become one of the first countries to create a hydrogen export market. This means jobs, especially in my home state of Victoria in the Latrobe Valley, which desperately is in need of more good, well-paying jobs.
To lead the way in hydrogen and carbon capture and storage we need to facilitate new technology projects being investigated and the feasibility being understood. These bills seek to allow for cross-boundary single gas titles, particularly from state and territory coastal waters to Commonwealth waters. This will unify two greenhouse gas titles where a titleholder has reasonable grounds to suspect that there is a geological formation that sits on either side of two title areas. The bills seek to simplify and enable cross-boundary titles and allow the Commonwealth to facilitate this. I thank the member for Hunter for his comments endorsing this. Upon passage of these bills, the title area will become Commonwealth waters for the purpose of the Offshore Petroleum and Greenhouse Gas Storage Act. This will put the responsibility of any greenhouse gas titles in the hands of the Commonwealth, meaning a simpler process when seeking to begin a project, such as CarbonNet or another resource project.
Greenhouse gas storage, also known as carbon capture and storage, is the process of capturing carbon dioxide from industrial processes and then transporting and injecting that CO2 into a secure geological formation for long-term underground storage. This is about carbon abatement. This prevents large amounts of CO2 from being released into the atmosphere. This aids in reducing greenhouse gas emissions, which contribute to climate change. Currently there are four active greenhouse gas assessment permits in Commonwealth offshore waters. All four permits are located in Victorian offshore waters.
The CarbonNet project is related to another project—the Hydrogen Energy Supply Chain project. This project in the Latrobe Valley in Victoria is described as a world-first trial to demonstrate hydrogen production from brown coal and the safe and efficient transport of liquefied hydrogen to Japan. Hydrogen has many potential uses, including heating buildings and powering vehicles. Many countries, including Australia, are investing in and supporting hydrogen due to its potential for decarbonising our energy systems. Hydrogen can be produced in a number of ways. Clean or green hydrogen is produced using renewable energy or by using carbon capture and storage.
The Morrison government has released the National Hydrogen Strategy. This will help to unleash the opportunities of clean hydrogen exports. Investment in hydrogen will be even more cost-effective if, as expected, gas infrastructure can be modified for hydrogen usage in the future. In fact, town gas is the old form of hydrogen and gas together and it used the same infrastructure. Grasping early potential trade opportunities with both hands, Australia has already signed the Joint Statement on Cooperation on Hydrogen and Fuel Cells during the recent Australia-Japan Ministerial Economic Dialogue in Melbourne in January this year.
The National Offshore Petroleum Safety Environmental Management Authority advises that there have been two greenhouse gas acreage release rounds by the Australian government for offshore greenhouse gas storage exploration—one in 2009 and the other in 2014. Currently there are four active greenhouse gas assessment permits in Commonwealth offshore waters. The four Victorian permits are related to the CarbonNet project. The network would involve multiple carbon capture storage projects transporting CO2 via a shared pipeline and injecting it underground. The amendments relating to the creation and administration of cross-boundary greenhouse gas titles will enable projects like the CarbonNet project to proceed with its proposed site in the Gippsland Basin, in offshore Victoria. The project could also facilitate a future commercial-scale hydrogen energy supply chain project, which will produce hydrogen from brown coal resources. This is investment in new technology to help us to get to a carbon-neutral future.
The second half of this bill will also strengthen and clarify the monitoring, inspection and enforcement powers of the National Offshore Petroleum Safety and Environmental Management Authority so that, during any oil pollution emergency that originates in Commonwealth waters, things can happen quickly. It's so incredibly important to make sure that the authority can enter or inspect the site of any pollution emergency without a warrant. This will seek to mitigate time wasted obtaining a warrant in the event of an oil spill emergency and allow clean-up to begin very quickly. During an offshore incident, inspectors need access to real-time information, including monitoring of enforcing compliance across premises, and the ability to take enforcement action in the event of noncompliance.
In conclusion, this bill supports the Morrison government's ongoing commitment to the maintenance and continuous improvement of a strong and effective regulatory framework for offshore petroleum and greenhouse gas storage but also the government's continued commitment to exploring and enabling ways to lower emissions. It is worth keeping an open mind when it comes to developing opportunities for future energy generation and storage. After all, this space is moving rapidly, and we wouldn't want to miss any opportunity to lead the energy technology revolution in the world's bid for a carbon-neutral future.
I stand to speak not only on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-Boundary Greenhouse Gas Titles and Other Measures) Bill 2019 but also on the amendment that was moved by the member for Hunter earlier. This is important legislation because, as the member for Hunter observed earlier, it's one of the few pieces of legislation that actually goes to dealing with some of the issues that we're confronting in this nation and globally in respect of climate change, and it also provides a great opportunity for economic efficiency in the management of these issues.
This legislation follows on from some legislation that we dealt with not that long ago in respect of carbon capture and storage and its regulation through the Offshore Petroleum and Greenhouse Gas Storage legislation. In particular it deals with an important issue that comes up time and time again in respect of the oil and gas industry: titles that cross over that very critical three-kilometre mark that delineates state and Commonwealth waters. This legislation will create a unified title opportunity to be administered through the Commonwealth, through this legislation, so that there is a singular point of regulation for greenhouse gas capture and storage operators in this country. That's very important. It's important that we have regulators that are able to do this job properly. It's important that we have regulators that are empowered with all the powers they need not only to make sure that these projects are done in an environmentally responsible way but also to make sure that the workplace health and safety requirements, which ensure that our Australian workers are protected in the workplace, are correctly and strongly enforced and that we have a regulator that is able to go in and enforce the regulations.
There are obviously powers that will come, under this legislation, with respect to the use of warrants to get access to sites—not just the offshore sites and the head offices but also the suppliers and contractors and the documents. Mandatory-provision-of-document powers are also included in this legislation. It is important to make sure that a regulator is able to get access to all the information they need when things go wrong, to make sure that we protect the environment, to make sure that we protect workers and to make sure that, where things do go wrong, people don't get off scot-free and companies don't get off scot-free. It's also important to make sure that we get these things right in the first place. That's what this legislation is critically about.
We will have a unified regulator and we'll have this Commonwealth title that will apply across state and Commonwealth boundaries. This is particularly important, as I mentioned, to that critical three-kilometre line of state waters and Commonwealth waters. A particularly pertinent example where this will apply is in Bass Strait, off Victoria, where the Victorian CarbonNet and Hydrogen Energy Supply Chain projects will be operating.
This is particularly important because this project is not only about the sequestration of CO2 being emitted from Latrobe Valley power stations but also about the future opportunity for a future hydrogen industry. A zero carbon emission fuel—the export opportunity of that fuel around the world is a great opportunity for Australia and something we need to continue to explore, and this legislation will allow that to be pursued. It is important that we have all options on the table when it comes to looking at ways in which we can reduce our carbon emissions and manage, in an economically responsible way, a movement towards low-carbon and no-carbon energy sources. It's great to see the opportunity of a hydrogen project—joined with the sequestration of carbon—coming from our existing coal-fired power plants.
But it's crucial that we also acknowledge the context within which this legislation sits. It's great that we are spending a minuscule of time debating this legislation here and that we are spending time debating some legislation that will actually help us address issues of climate change in this nation and for the world. But it sits within a vacuum from this government—a government that is completely without policy and bereft of opportunity when it comes to dealing with climate change. Climate change is an issue that is of such great importance, not just here in Australia and not just for a segment of voters but around the globe.
And when we look at the context of a lack of policy—I should point out there were some policies from this government in this area. They tried to abolish ARENA. Then there was the CEFC. There was the cutting of funding of $500 million for ARENA, and, crucially—when we look at the context of this legislation—a removal of $400 million that was to assist with carbon-sequestration projects. The consequence of all of this is Australia—a country that is bathed in sun, with numerous areas of strong wind—has continued to slip back and back and back when it comes to critical investment in renewable-energy opportunities.
There are funds that have been established in Australia by Australians that are wanting to invest capital in renewable-energy opportunities, that have had to go offshore to find those renewable-energy investment options because they haven't been available here in Australia. So when the government talks about wanting to be economically responsible, you would think it might consider how it can capture its own capital—Australian capital—to invest in those projects here. This legislation will actually help with that. But we need to be doing so much more.
As we have now for so long, the Labor Party joins with the government in a bipartisan way to support this legislation, because it is going the right way. It is, at least, a small step in the right direction, but it cannot be ignored at all that the context within which this legislation is being presented today is one of absolute failure—that is, absolute failure by this government when it comes to dealing with carbon abatement, absolute failure when it comes to dealing with the issue of climate change and absolute failure when it comes to properly dealing with a long-term, sustainable, reliable energy future for this country.
The Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019 amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006, the OPGGS Act, to enable title administration and regulation of a greenhouse gas storage formation that straddles the boundary between state and Northern Territory coastal waters and Commonwealth waters. It also amends the OPGGS Act to enhance the National Offshore Petroleum Safety and Environmental Management Authority's, NOPSEMA's, ability to respond fully during an oil spill emergency.
The recently announced National Hydrogen Strategy highlights the economic opportunity the hydrogen export industry has for Australia. Australia's abundant natural resources mean it could be one of the first countries to create a hydrogen export industry, helping to generate a significant number of Australian jobs and lay the foundations for a new hydrogen industry. This bill aims to help realise this opportunity for Australia. The Hydrogen Energy Supply Chain project relies on suitable carbon capture and storage, that the CarbonNet project will provide. This is the cheapest way to produce clean hydrogen.
The CarbonNet project is investigating the feasibility for a commercial-scale multiuser carbon capture and storage network in Gippsland, Victoria. The proposed storage site under CarbonNet's project is one such site that straddles the boundary between Commonwealth waters and state and Northern Territory coastal waters. The Australian government has invested heavily in both the CarbonNet and hydrogen energy supply chain, providing total funding of almost $150 million. The two projects are highly independent.
To kickstart our new hydrogen industry, the bill will improve the current regulatory framework by amending the OPGGS Act to provide for single greenhouse gas titles that are partially located in Commonwealth waters and partially located in state and Northern Territory coastal waters. These amendments will further realise the benefits of Australia's resources sector and unlock the development of future resource projects that identify potential storage formations that straddle the jurisdictional boundary. Once these amendments have passed, together with supporting state and Northern Territory legislation, a cross-boundary regulatory regime will be ready to be triggered. This regulatory regime starts with the creation of a cross-boundary authority consisting of the responsible Commonwealth minister and the relevant state or Northern Territory resources minister. This is similar to current joint authority arrangements for petroleum titles in Commonwealth waters.
The cross-boundary authority will make decisions by consensus about the granting of cross-boundary greenhouse gas titles. Upon the granting of the cross-boundary title, the title area becomes Commonwealth waters for all purposes of the OPGGS Act. The title area will be regulated under the act in the same way as other greenhouse gas titles located in Commonwealth waters. NOPSEMA will have regulatory responsibility for environmental management, safety and well integrity. Titles administration will be undertaken by the National Offshore Petroleum Titles Administrator. The existing protections for pre-commencement petroleum titles and existing petroleum production licences, in both Commonwealth and state and Northern Territory waters, will be maintained. The amendments will also enable the unification of adjacent Commonwealth greenhouse gas titles where a titleholder has reasonable grounds to suspect that there is a geological formation that straddles the two title areas.
Through its other key measure, the bill will also strengthen and clarify the monitoring, inspection and enforcement powers of NOPSEMA within state and Northern Territory jurisdictions during an oil pollution emergency originating in Commonwealth waters. The OPGGS Act currently does not provide adequate monitoring, inspection and enforcement powers within state and Northern Territory jurisdictions for NOPSEMA to ensure compliance by a titleholder with its environmental management obligations. The extension of NOPSEMA's powers in the bill is confined to the event of an oil pollution emergency originating from operations in Commonwealth waters.
The bill amends the OPGGS Act to enable NOPSEMA inspectors to enter premises used for the implementation of oil spill response obligations without a warrant in the event of an oil pollution emergency arising from operations in Commonwealth waters; 'premises' also includes an aircraft or vessel. NOPSEMA will be able to enter premises whether they are located in Commonwealth, state or Northern Territory jurisdictions. The delay caused by obtaining a warrant or consent can significantly impede compliance monitoring in such emergency situations. During an offshore incident, NOPSEMA inspectors need real-time regulatory intelligence in dynamic situations, including monitoring and enforcing compliance across premises.
The warrant-free oil pollution environmental inspection powers will be exercisable only if the CEO of NOPSEMA is satisfied that there is an emergency that has resulted in or may result in oil pollution and declares an oil pollution emergency. NOPSEMA must publish a copy of the declaration on its website as soon as practicable after the declaration is made and must give a copy to the relevant titleholder. When the CEO of NOPSEMA is satisfied that the emergency no longer exists, the CEO must revoke the declaration and publish a copy of the instrument of revocation on NOPSEMA's website as soon as possible after making it. A copy of the revocation will also be provided to the relevant titleholder.
The amendments will enable NOPSEMA to monitor whether a titleholder is in compliance with its oil spill response obligations and take enforcement action in the event of noncompliance. The bill will also amend the OPGGS Act to extend the operation of polluter-pays obligations and the application of significant incident directions that may be given by NOPSEMA to areas of state and Northern Territory jurisdiction.
Finally, the bill makes minor technical amendments to improve the operation of the OPGGS Act. Overall, the bill underscores this government's ongoing commitment to the maintenance and continuous improvement of a strong, effective regulatory framework for offshore petroleum and greenhouse gas storage. Further, the bill ensures the regulatory framework's alignment with international best practice and aims to attract investment in new technologies and industries for Australia.
I acknowledge the recommendation made in the Senate Economics Legislation Committee's report on this bill to address issues raised by the Australian Petroleum Production and Exploration Association in its submission. These matters are appropriately dealt with in guidance rather than legislation. The guidance and protocols will ensure clarity and procedural certainty in the unlikely event that the provisions need to be activated.
I commend this bill without amendment to the chamber.
The original question was that this bill be read a second time. To this, the honourable member for Hunter has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. So the immediate question is that the amendment moved by the member for Hunter be agreed to.