Wednesday, 15 October 2008
Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008; Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008; Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008; Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008
Debate resumed from 24 September, on motion by Senator Ludwig:
That these bills be now read a second time.
I rise to speak on the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and associated bills. This legislation is of great importance and interest to the people in Western Australia and of course to the whole nation. But I really do say, coming from Western Australia, that Western Australia has been the engine room of the economy for the past 10-odd years. As you would know, Mr Acting Deputy President Parry, on anything to do with mining or resources, we proudly boast that WA leads the rest of the nation, but this legislation is of great importance to us all.
The purpose of this legislation is to establish a new range of offshore titles to provide for the movement of carbon dioxide and other greenhouse gases to be injected and stored underground in geological formations in Australia’s waters. The legislation will allow for the creation of a legal and regulatory industry framework to operate, whereby carbon and other greenhouse gases may be captured and stored below the surface of the ground under the sea in Commonwealth waters. The bills will also create an environment in which industry can invest in carbon capture and storage projects with confidence and will encourage further development and commercialisation of technologies which can help reduce global greenhouse gas emissions in the future.
An area of importance is along the north-west coast of my home state of Western Australia—which is also the home state of Senator Adams, who would be very familiar with that great part of the world and how much opportunity there is for carbon capture and storage off the North West Shelf and with the new gas ventures coming on line. Also, there is opportunity around the Browse Basin, let alone what is happening down Onslow way. There are massive reserves of natural gas up there.
I will take this opportunity to boast that I was at a dinner a couple of weeks ago with the Taiwanese, who were proud to announce that they had just signed with one of our North West Shelf partners, Woodside, a $20 billion 20-year contract to supply gas to Taiwan. That is absolutely wonderful for Western Australia and for Australia.
These reserves often already contain large components of carbon dioxide in varying levels. These bills provide for the collection and transportation of carbon dioxide and other greenhouse gases and for these gases to be pumped under pressure back down under the surface of the earth, where they can be safely stored in massive volumes for many, many years. The proposed legislation also preserves the pre-existing rights of the petroleum industry, where possible, to minimise the risk to existing titleholders’ investment in Australia and their resources and the potential resources being extracted from those leases. The legislation also provides assurance to the community that the carbon dioxide can and will be stored in a safe and secure manner.
Carbon capture and storage technology is a technology that can be replicated many times wherever we find massive emissions of CO2 which we wish to remove from the atmosphere. These bills allow for a legislative and regulatory framework to be established, ensuring that these operations are safe and do eventually protect the environment.
The Rudd Labor government is committed to comprehensive action to tackle climate change. That was very relevant through the last federal election. One of the pillars of our election was certainly climate change and the removal of greenhouse gases. It was amazing to see the sceptics from the other side who would not accept the fact that we have got problems with greenhouse gas emissions. So I do thank senators opposite for having had their heads in the sand during the last election campaign whenever we wanted to discuss Australia’s future around greenhouse gas emissions, while recognising also the importance of supporting Australian jobs and the community, which are dear to all our hearts—every senator in this place and the members in the other place and the people that we represent in this great nation.
Carbon capture and storage holds great potential as an important contributor amongst several strategies for avoiding the damaging effects of the emission of carbon dioxide and other greenhouse gases into the atmosphere. If successfully developed, carbon capture and storage has the potential to significantly reduce Australia’s greenhouse gas emissions while allowing for the continued use of fossil fuel. As a result of the further development of these technologies and in the geosequestration process itself, there is a significant capacity for a future growth in jobs, which is also very important, as well as the economy. All of that will go a long way to assisting Australia achieve its emissions targets.
The Rudd Labor government’s vision and strategy for carbon capture and storage is also reflected in the government’s recent announcement of $100 million into the establishment of a global carbon capture institute as well as $100 million of ongoing funding towards that facility. That is $200 million—not a bad start. There is a long way to go, but at least it is a start. The Rudd Labor government has started it and we are determined to continue. The Sydney Morning Herald on 19 September 2008 reported that the British Prime Minister, Gordon Brown, has welcomed the vision, scale and ambition of the institute and strongly endorsed the government’s actions—and it is always very rewarding to hear other governments praising what we are doing here in Australia. The Sydney Morning Herald also reported that the resources industry in Australia is also very supportive and enthusiastic about the Rudd government’s action towards carbon capture and addressing climate change. It is a humongous—if I can use that word—endorsement when we hear the resources industry in Australia supporting the Rudd government’s carbon capture policies and actions. In the same article the Chief Executive of the Minerals Council of Australia, Mr Mitch Hooke, said this of the Rudd government’s initiative in setting up the carbon capture institute:
This is the missing link in the suite of policies needed for a balanced, comprehensive and measured approach to a low emissions global economy.
So not only is the resource industry coming out in full support and endorsing the Rudd Labor government’s actions but so is its peak body, the Minerals Council of Australia.
This is further evidence of the support for and recognition of Australia’s actions in tackling climate change and leading the world in this area. That is a big call—we are leading the world in this area. The government has set a goal of a reduction of 60 per cent in the 2000 levels of emissions by 2050. The most efficient method of reducing these emissions is a carbon pollution reduction scheme. Most forecasts of Australian and global energy production and consumption predict heavy fossil fuel use continuing for many years to come, and we are very well aware of that. The Stern review forecast that fossil fuels would still account for a majority of global energy production in 2050. We cannot fool ourselves; we know that that is definitely the case and will continue to be the case. This means that it is essential that we minimise carbon pollution and the release of carbon from fossil fuel based energy production. Carbon capture and storage technologies are a very important element in achieving this. Carbon capture and storage can reduce emissions from fossil fuel use by 80 to 85 per cent.
As I was saying earlier, the Australian Labor Party took to the last election a commitment to establish a $500 million clean coal technology fund. The Rudd government has established two new bodies to drive the deployment of low-emission coal technologies in Australia. One is the National Low Emissions Coal Council and the other is the Carbon Storage Taskforce. In addition to that, industry and state governments are committing no less than $1 billion. That is wonderful. It is tripartite: we have the federal Rudd Labor government doing their bit, we have the states doing their bit and we have industry on board doing their bit. They all want to achieve the same goal.
Curtin university in Western Australia—and I have been to Curtin university; I did a removal there in 1980-something!—is developing a carbon capture and sequestration centre of excellence. All senators in this place should be proud, as us Labor senators are, of Minister Wong’s green paper on the Carbon Pollution Reduction Scheme. This places further emphasis on industry and power generators to invest in, develop and use low-emissions technologies. The cost imperatives involved will place pressure on these industries to reduce their emissions. There is a cost, but it will be a real cost. The scheme will establish a forward price for carbon within the Australian economy. Placing a cost on carbon will encourage industry to develop and deploy low-emission technologies over time. Whilst Australia is the world leader in coal exports, and it is a very important part of our economy at present, we are not the world leader in developing technologies for clean coal—not yet. But we are going to get there and we are going to strive to get there as quickly as we can. If we are going to maintain our trade position, we need to have a hand-in-hand approach to the development of that technology itself. The Carbon Pollution Reduction Scheme will be the incentive to establish mechanisms to ensure that these new coal abatement schemes are developed in this country. This is an area where we can be a world leader. These steps are evidence that this government is serious about climate change and serious about making low-emission coal a reality, as well as securing Australia’s future energy needs.
Low-cost coal supports the high standard of living that we as Australians enjoy. The success of carbon capture technology will guarantee the long-term future of the coal power industry in Australia as well as jobs for Australians. That is very important—we must maintain and keep jobs for Australians. The users of clean coal in Australia and overseas must take account of the importance of maintaining adequate and reliable energy by making coal and other fossil fuels cleaner.
We have a responsibility to help our major export markets of China and India to also adopt cleaner methods and invest in cleaner energy technologies. The government recognises that new clean energy technologies, including both fossil fuels and renewable energy sources, are the key to a sustainable climate change solution. The Rudd government is providing that leadership and policies that reduce or eliminate greenhouse gas emissions while at the same time ensuring that we continue to prosper from our abundant energy resources. I cannot stress enough the abundant resources we have around this country. Other countries are envious, and so they should be. We have years and years and years of resources, but we must look after those resources and we must look after the jobs in that resource sector. Carbon capture is a very important first step.
These bills will not have any financial impact on the Australian government budget. This is very important: no impact on our budget. The Department of Resources, Energy and Tourism, and Geoscience Australia, have been provided funding for the development and implementation of this regulatory regime, and no additional funding is sought. Fees will be charged for greenhouse gas titles, to recover the costs of day-to-day administration.
I would like to acknowledge Western Australian opposition senators and members who have given support to these bills and who have spoken to them in this place and in the other place. In fact, I would like to expand on a few points made in the member for Kalgoorlie’s contribution in the other place. The member for Kalgoorlie said on 17 September in the other place: ‘First of all, as a parliament we need to pass this legislation because it is important for Australia.’ It is, however, interesting to further examine the contribution of the member for Kalgoorlie. He also said:
supports a number of aspects of the bill. It supports the introduction of the legislation generally to accommodate greenhouse gas storage activities. It also supports the regime being included in the Offshore Petroleum Act …
The member for Kalgoorlie then goes on to say that Woodside:
… strongly supports the adoption of the proposed legislative model by states and territories to ensure a nationally consistent framework in both offshore and onshore areas to minimise the regulatory burden.
The member for Kalgoorlie then went on to highlight a few concerns that Woodside has to any new LNG developments. Before I go any further I will sing the praises of Woodside. I have said that in this chamber on a previous occasion. Western Australia is open for business. It is an absolutely wonderful place to do business! Woodside employs a lot of Western Australians. Woodside employs a lot of Australians. Woodside employs non-Australians. It is a wonderful company. And Woodside wants to spend more money by developing the Pluto gas field, which they are doing. I have had the fortune of visiting the Pluto site; it is wonderful. I look forward also to when Woodside develops their Browse Basin sites. As I was saying, Western Australia is a wonderful place to do business, and so it should be.
The member for Kalgoorlie also refers several times to the Australian Taxation Office and the Rudd government. I think he quoted us as being a thief in the night and accused us of stealing $2½ billion over four years. I am not going to go down that path, but for the context I want to quote the words of the member for Kalgoorlie.
It is wonderful, Senator Cormann—Senator Cormann from Western Australia. But I would ask: who is the member for Kalgoorlie here to represent? Is it the constituents of Kalgoorlie, which I think is the largest electorate in the world?