Wednesday, 4 March 2015
Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Matters) Bill 2015, Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Matters) Bill 2015; Second Reading
I present the explanatory memoranda and I move:
That these bills be now read a second time.
I seek leave to have the second reading speeches incorporated in Hansard.
The speeches read as follows—
1. To ensure certainty and security of titleholders ' tenure in Commonwealth waters in circumstances where the boundary between Commonwealth and State/ Territory coastal waters changes;
2. To clarify arrangements whereby the National Offshore Petroleum Safety and Environmental Management Authority is able to effectively perform regulatory functions as conferred under State or Northern Territory legislation; and
3. To make minor technical amendments to clarify and improve the operation of the Act.
The first and most significant measure is a response to recently identified coastal water boundary changes around Australia ' s coastline.
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. Last year, this work 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 2014.
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.
My Department has been working and continues to work 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. This 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 coastal water boundary change. Instead, affected blocks become vacant acreage in Commonwealth waters, and existing titleholders will lose title over those blocks. It is acknowledged that titleholders may have already spent considerable sums of money and effort undertaking exploration activities under their title, and therefore the Commonwealth Government believes that it is critical that titleholders should have continuity of tenure in the event of a boundary change.
While this will not impact current efforts in Western Australia where there is a movement of blocks out of Commonwealth waters into those of Western Australia, it is necessary to amend the OPGGS Act to anticipate and account for those circumstances in which a future boundary change results in a gain of Commonwealth jurisdiction over blocks. Given the ongoing nature of Geoscience Australia ' s effort to define Australia ' s maritime border, future changes of this type are a realistic prospect.
The proposed amendments will therefore provide for the automatic grant of an equivalent Commonwealth title over affected blocks to the existing holder(s) of a State or Northern Territory title at the time at which the State or Northern Territory title ceases to be in force.
This set of amendments is generic in nature, and it is intended that it will provide a comprehensive model for other jurisdictions to adopt in their own coastal waters petroleum legislation. Such a mirroring exercise will allow for consistency across Australia ' s offshore petroleum legislative framework, eliminate the sovereign risk created by future boundary changes, and ensure equitable treatment and continuity of tenure for all titleholders, whether located in Commonwealth or State/ Territory waters.
Turning to the other measures in this Bill, it goes without saying that Australia ' s success in the offshore petroleum investment market is underpinned by its comprehensive and well-established regulatory framework.
In February 2014, the Commonwealth Government announced a new streamlined approach for environmental approvals for offshore petroleum activities, completing a bipartisan initiative commenced under the former government to reduce the regulatory overlap for the offshore petroleum sector. This made the National Offshore Petroleum Safety and Environmental Management Authority 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 Government is seeking to further streamline regulatory arrangements in respect of all offshore petroleum activities. To this end, the States and the Northern Territory are being encouraged to confer occupational health and safety, structural integrity and environmental management functions and powers upon the National Offshore Petroleum Safety and Environmental Management Authority under their respective legislation in respect of those waters of the sea within their jurisdictional reach.
A conferral of these powers and functions on the National Offshore Petroleum Safety and Environmental Management Authority would permit the States and the Northern Territory to benefit from the expertise and experience of an established national regulator, as well as reducing regulatory burden by both providing a consistent regulatory framework across both Commonwealth and State/ Territory waters, as well as minimising the number of regulatory agencies with which offshore petroleum industry participants must engage.
In December last year I introduced a Bill which contains amendments to permit conferral across as wide a geographic area as possible. The current Bill further clarifies conditions associated with a conferral including distinguishing between petroleum and greenhouse gas storage regulatory oversight and underpinning effective cost recovery arrangements for the National Offshore Petroleum Safety and Environmental Management Authority.
Finally, the Bill makes a number of technical amendments to the administrative framework to clarify and improve the operation of the OPGGS Act in relation to suspension of a condition and associated extension of the term of a title, and the consistent treatment of locations leading to the progression through types of title to underpin timely development of Australia ' s resources.
This collection of measures underscores this Government ' 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.
OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE (REGULATORY LEVIES) AMENDMENT (MISCELLANEOUS MATTERS) BILL 2015
This Bill makes a consequential amendment to the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003 (Levies Act) that is made necessary by amendments contained in the Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Matters) Bill 2015. That Bill implements new arrangements in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to provide for the automatic grant of an equivalent Commonwealth title over affected blocks to the existing holder(s) of a State or Northern Territory title at the time at which the State or Northern Territory title ceases to be in force as the result of a coastal water boundary change. This automatic grant of title is provided with a specific name when it is an exploration permit to both reflect how it is brought into existence in Commonwealth waters and to distinguish it from other types of existing exploration permits.
The National Offshore Petroleum Titles Administrator (NOPTA) operates on a fully cost-recovered basis through levies payable by the offshore petroleum industry. The Levies Act at present facilitates NOPTA ' s cost recovery by imposing annual titles administration levies in relation to Commonwealth titles. To this end, the cross-boundary exploration permit title must be added to the definition of Commonwealth title in order to ensure NOPTA is able to cost recover for its oversight of these titles.
Ordered that further consideration of the second reading of these bills be adjourned to 12 May 2015, in accordance with standing order 111.