Senate debates

Monday, 23 August 2021


Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021, Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2021; Second Reading

11:51 am

Photo of Rex PatrickRex Patrick (SA, Independent) Share this | | Hansard source

I rise to speak on the proposed legislation, which amends the Offshore Petroleum and Greenhouse Gas Storage Act. I note that this amending legislation, the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2021, basically deals with a number of different problems that have been created by the conduct of a number of oil and gas companies.

I want to start by saying that we have a really big problem in this country, and that is that we are having our resources produced, extracted and, in the case of LNG, turned into liquefied form and shipped off overseas and we are getting almost no return. We know that, in 2018-19, $62 billion of oil and gas was exported from this country, and the Australian taxpayer, the owner of the resources, got $1 billion in petroleum resource rent tax in return. Of the $62 billion of taxpayers' resource that was shifted off overseas, the taxpayer got $1 billion—that's it. Now, if people don't recognise that that is a problem, then we are beyond help.

That is the situation with all of our oil and gas wealth. If we were to look at how others, particularly places like Norway and Qatar, have done in relation to the oil and gas that they extract from their economic exclusion zones or their territories, they have done substantially better than us. Norway have over a trillion dollars in their sovereign wealth fund, and most of that has come from the return that they get from the extraction from underneath the North Sea of the resources of the citizens of Norway.

We have done a really poor job. In fact, a committee that's looking into oil and gas and whether or not we're maximising the benefit for Australians found that it's likely that, on the numbers, the return to the taxpayer on our oil and gas is minus 36 per cent. We actually lose money by extracting oil and gas, because we end up subsidising the oil and gas industry through tax write offs and other such support. The oil and gas industry, who are mostly multinationals, then take the resource and send it off overseas. Exxon Mobil, according to its tax transparency data, had $42 billion of revenue over the last five or so years, and they've paid not a cent in corporate tax. If anyone doesn't see that there's a problem with this—and I'm sure the Greens will stand up, quite rightly, and say that as well as not getting any money for it, as well as having to subsidise the industry, of course all of that oil and gas then goes off overseas to be consumed and used and producing carbon emissions. There might be some argument if the Australian population were getting huge benefits from this and had been getting huge benefits from this, but there is basically no reason whatsoever for us to want to, in any way, produce oil and gas in this country because nothing comes back to the taxpayer. It's a fundamental problem.

My understanding of the nature of this bill is it seeks to close off a loophole in relation to stranded assets. A good example of where this has been a problem is in the case of the Northern Endeavour. The NorthernEndeavour was owned by a company related to Woodside, and a few years ago they sold the tenement—in fact, legally correctly, they sold the company that owned the tenement. Had they sought to sell the tenement, that would have invoked a whole range of analysis by NOPTA to make sure that the company that was taking it over was financially sound, but, instead, it was just a change of shareholding at the company level. Low and behold, we ended up with a company called NOGA, Northern Oil & Gas Australia, owning the asset NorthernEndeavour and, indeed, the tenement, and the allegation is that they didn't have the capital to actually operate the field. What we saw happen was, in 2019, NOPSEMA issued a prohibition notice against the company after a component fell onto the deck, so it was a safety issue—and I genuinely understand it was a safety issue—but the company basically then was put in a position where it didn't have any cash flow because it wasn't producing oil and it didn't really have a pathway out of the prohibition notice. For three or four months the company operated, trying to remedy the situation. What happened was the company ended up having to go into administration. The story thus far: Woodside sells an ageing asset to a company at a peppercorn price, that company operates to a point where they get a prohibition notice and that drives them into liquidation. The interesting thing here is I had a conversation with NOPSEMA at estimates back in, I think it was, October of 2019, saying, 'If you don't help this company come out of the prohibition that it's in, if you don't lay out on the table what they need to fix with the platform, then what will happen is the company will go into administration and the taxpayer will end up carrying the can, having to deal with an asset and all of the different structures on the sea bed, and that would cost hundreds of millions of dollars.' And the head of NOPSEMA, Mr Smith, said to me, 'No, that won't happen, Senator.' You know what? A month later it did! It did happen, and the company went into administration, and, of course, we ended up with a situation where the taxpayer has had to take over the operation of the NorthernEndeavour. So, right now, in the Timor Sea, we have a vessel, an FPSO, that is being operated by the Australian taxpayer in lighthouse mode, costing something in the order of $10 million a month—it might be somewhere between $5 million and $10 million. That's an astounding fact. I think, at the last count, it was $80 million of taxpayers' money that had been spent operating a vessel in lighthouse mode, and that does not include the cost to remedy the vessel, to remove the vessel and to return the sea floor back to its original state. That's likely to run into a billion dollars. Of course, the government has announced that it's going to try and claw that back from the industry. But I can tell you that the events that took place with the Northern Endeavour, which are the driving factor behind this bill, were known before the Northern Endeavour situation occurred. So it's quite unexplainable how we got into this mess and how the taxpayer has borne the cost of all this.

Whilst I will be supporting this bill, I can't not mention the total failure of government in terms of dealing with this whole circumstance. I say that this vessel, with a bit of help—far less than the money that had been spent—could have been kept in production, could have kept employing Australians and could have kept contributing to our fuel security situation because of the storage that was on the Northern Endeavour as a vessel. Unfortunately, this has just been a big sink for the Australian taxpayer. It's not a good situation. So, in the end, I'll be supporting this bill, but I foreshadow that, in the committee stage, I will be moving an amendment that looks at transparency. I'll talk to that amendment when the time comes, but, to give you a bit of a tip, it simply deals with things like production data, with requiring a company to basically say: 'This is how much I am producing. This is how much is left in the tenement'—useful information to shareholders and useful information to Australian taxpayers, who actually are the owners of the resource. I know that some on the other side may say, 'Whoa—that's company information.' But you know what? When you come along and you talk to the Australian government and you say, 'I'd like to extract some resource from your EEZ,' there's a cost to that in terms of your transparency with the Australian public. When we get to that point in the committee stage, I'll certainly be drawing out the findings of ACIL Allen in relation to whether or not this information should be held secret.

Anyway, I won't delay the chamber any further. I will be supporting the bill, but I will also be moving amendments to it.

12:02 pm

Photo of Ben SmallBen Small (WA, Liberal Party) Share this | | Hansard source

I acknowledge at the outset that I am a former Woodside employee. That's a matter of public record, but it is important to be transparent with the chamber. I also acknowledge the decency and integrity of Senator Whish-Wilson, who, in a wide-ranging assessment of the bill—an assessment that I mostly disagree with—did have the honesty to acknowledge that Woodside, a company that features very relevantly in this conversation, has been a very significant Australian taxpayer—indeed, contributing $4.9 billion in income tax and royalties in the five years from 2013 to 2018 and then, more recently, $493 million in 2018, $583 million in 2019 and $707 million in 2020. I think that is important context as we consider the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021, which makes the necessary legislative changes to the act to implement some aspects of the department's enhanced decommissioning framework and the relevant recommendations from the independent Review of the Circumstances That Led to the Administration of the Northern Oil & Gas Australia (NOGA) Group of Companies, otherwise known as the Walker review.

As part of the Morrison government, I do support these very important steps in the right direction, but, as a Western Australian, as someone who was part of the industry and as a taxpayer, I am concerned that the conversation can't stop here. Decommissioning is a very significant issue for the nation, and, indeed, we must take steps to ensure that Australian taxpayers and Australians derive the maximum benefit from the exploitation of these resources. On that, I totally agree with Senator Patrick. I suspect we might disagree on the mechanisms.

What have we got so far? We've got a bill that provides a trailing liability by expanding the remedial directions and provisions in the act. That requires any former titleholder or related person, which is a broadening of the definition, to carry out decommissioning if the current or immediate former titleholder is unable to do so. Whilst that is a measure of last resort where all other regulatory options have been exhausted, it does aim to ensure that the risks and liabilities of petroleum exploitation remain the responsibility of those who have been involved in the project. The bill increases regulatory oversight and scrutiny by providing for specific decision-making criteria to ensure that the entities are and, importantly, remain suitable to undertake petroleum project activities. So, in all, this bill is very sensible in taking those steps towards ensuring that the situation we've seen with NOGA and the Northern Endeavour is not repeated. However, in light of my comments that this is just the beginning, let me outline some of the important facts.

The decommissioning liability in Australia has been modelled at more than $60 billion of expenditure over the next 30 years. Assets in the North West Shelf and Bass Strait comprise the vast majority, some 73 per cent, of that estimated $60 billion liability. There is an opportunity to materially reduce this cost with smart regulation, industry cooperation and the adoption of best practice here in Australia. Australian legislation, in my view, does not provide adequate guidance on the decommissioning options that are most in tune with international best practice, and I fear that the impact is to Australian taxpayers if we don't amend the current statute position on the mandatory removal of all infrastructure, which I do acknowledge is worked around by NOPSEMA, which uses regulatory processes to appropriately approve alternative arrangements.

In her last contribution on this bill, Senator Brown, on behalf of the Labor Party, did clearly articulate how little they understand of the resources industry and how their concern is partisan politics on this issue and not being wedged by the Greens. Their interests are not acting on behalf of Australian taxpayers, who potentially fundamentally forgo 58c in the dollar where decommissioning spend is deductible against both company income tax and PRRT, meaning that a significant proportion of decommissioning costs—as much as $17.8 billion in the next 10 years alone—is borne by Australian taxpayers through taxation relief, perfectly lawfully and perfectly legitimately. That's a massive number: $17.8 billion in the next 10 years. The economic benefit, when you consider that liability, is premised on the regulatory default of full removal of all infrastructure, particularly as it relates to the removal of long-distance export pipelines and interfield pipelines—we're talking about steel and concrete here—where clear alternatives exist internationally. Limiting decommissioning activities to the preparation, disconnection, cleaning and site remediation to leave all export and interfield pipelines in place would save some $9 billion on the overall liability alone. These are pipelines that have existed on the sea floor for some 40 years, in some cases, and they have formed natural habitats. They not only attract industry through enhanced fish stocks but are important to local communities in regional Australia in supporting the community recreation that's associated with those areas.

That is the magnitude of what we're talking about here: billions of dollars of forgone tax revenue, an impact to the environment that makes no sense whatsoever and an impact to our regional Australian communities. Implementing alternative arrangements for pipelines alone would save the taxpayer some $5.2 billion. We must also talk in terms of the environmental impact because, at the end of the day, everyone that comes to this place enjoys Australia's pristine ocean environment. As a Western Australian who's visited Exmouth and Coral Bay on the site of the world-famous Ningaloo reef, I associate with that deeply. But the oil and gas infrastructure we're talking about is often under water for decades and is covered in marine life. Requiring operators to fully remove that infrastructure doesn't always make environmental sense.

Few studies of the environmental impact of leaving the infrastructure offshore in situ in Australia have been completed and that's a problem. However, studies from comparable international environments are already available. Under controlled guidelines, there is reasonable evidence already available which shows that, in some circumstances, leaving offshore infrastructure in situ or partially removing it is not only sufficient but, in fact, better for the ocean environment as compared to complete removal. There are multiple factors which need to be weighed, and that makes decommissioning a complex matter. It shouldn't be a partisan political football because of the impact to Australians.

Some examples of those environmental benefits include: attracting fish at all stages, whether adult, larval or juvenile fish, including commercially significant species; providing a spawning habitat for marine life; and introducing hard surfaces, which allow for greater marine biodiversity. Marine life that thrives at varying depths often settles along vertical infrastructure in locations that would not normally be available due to the prevailing water depth. Infrastructure can provide shelter, protection from fisheries and a natural protection, thereby enhancing production levels of commercially significant fish species within a region. Creating those artificial reefs also provides fishing, tourism and community amenity in regional Australia.

The concern that any proposed change to the act permitting in-situ decommissioning is inconsistent with our obligations as a signatory to the London convention is, frankly, rubbish. Indeed, the United Kingdom has world best practice legislation to deal with decommissioning liabilities and they are, of course, where the London protocol was signed. In fact, the UK's decommissioning legislation, which requires that a consideration and advice on alternatives to abandoning or decommissioning where it comes to the installation or pipelines, such as reusing or preserving it, is enshrined in the United Kingdom's legislation. That's what we are talking about here—other jurisdictions who have already taken steps to recognise not only the environmental but the economic, community and social factors that this issue raises.

Considering that the United Kingdom is not alone in this, with the United States, Norway and Japan already employing these best practices, the Australian oil and gas industry is in need of further legislative reform. Those other nations are slightly ahead of Australia's industry because their oil and gas assets are slightly older; therefore, they are further advanced in the decommissioning phase of their infrastructure life cycle, but they are tangible examples that show that these improved methods can be sustainably implemented. It's noteworthy that not only the United Kingdom but also Norway, the United States and Japan are fellow signatories to the London protocol.

So whilst I understand that this bill is an important and positive step to developing a solution to preventing recurrence of the Northern Endeavour situation, it's important in my view that the research and advice to the department be pulled together, along with consultation with industry experts and stakeholders, and should be considered, invested in. It warrants further consideration. This legislation is a step in the right direction, but it is not the destination in which Australian taxpayers need us to go. When you consider the looming task of a maturing offshore oil and gas industry, assets and the related financial liabilities associated, these growing demands do require our attention quite urgently. That number of $17.8 billion of taxation revenue foregone in the next 10 years sticks very clearly in my mind when it comes to paying for the sorts of services and investments that Australia needs as we move beyond the COVID-19 pandemic.

I welcome this legislation and I am here to advocate that we further consider in a more holistic way the needs of decommissioning so that it is balancing environmental, economic, social and community factors in what is a complex and nuanced area of Australian legislation. I commend this bill to the Senate.

12:14 pm

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party) Share this | | Hansard source

I have no declaration of having worked for any of the big oil or mining companies across this country. I'm just a humble teacher and a lecturer in education from the Central Coast, with a small-business family background. But, nonetheless, I understand what it means when you come into government to have a really good look at what's going on, get in the race early, not wait until the last minute, see what's going on and prevent the situation that we are coming in here to correct today. And make no mistake: this is a correction of a failure of government to see what was going on and to bring in a timely bill a long, long time before this day to prevent the matter that it's seeking to use as a historical moment for a change going forward.

There are lots of concerns about retrospective legislation. You can understand why there's pressure against that. But the only reason there would be pressure for this to be retrospective is that the government weren't on the job. Anything that really matters they don't do until it's too late, and then they do it in the most untidy way. So let's just have a look at this bill which does seek to do something good finally but is once again too little too late by a government who are obsessed with announcements over actually doing the day job of showing up properly, planning and delivering legislation in a timely way to benefit the people of Australia. The cost to the Australian people of this delay is $200 million. So it costs when you don't show up. It costs when you don't get to the starting line. It costs when you don't do your day job and you're the government.

So I rise today to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021. It is, as I said, a reform in dealing with offshore equipment and infrastructure that helps prevent companies from dodging their corporate responsibility and to do what every kid learns even at preschool, to clean up after yourself, after they have extracted the nation's resource wealth. Even Senator Small in his contribution spoke about Australia being behind not just because our assets are a little younger than the assets of the UK, Norway, the US and Japan but because this government doesn't think it needs to do stuff to protect Australia. It thinks it just needs to show up, be in power, give itself a few little pockets of money that it can rort and send out and that will do. It thinks that's good enough. Well, it is not good enough.

This piece of legislation is particularly relevant when we consider the recent debacle surrounding the Northern Endeavour. This was an oil vessel that was anchored in the Timor Sea, a beautiful part of the country. But it's going to cost the taxpayers $200 million to clean up after its inexperienced owner purchased the platform from Woodside. That owner, Northern Oil & Gas Australia Pty Ltd, was then forced to close after the national offshore environment authority, known as NOPSEMA, found that there were a lot of significant environmental and safety concerns that were associated with the Northern Endeavour. What were those concerns? One was corrosion. Another was the ability to respond to an oil spill. Another was a faulty fire suppression system and a significant risk of a major incident occurring. Remember where this is. It's in the Timor Sea. You don't have to be a mining executive to have some sense of value not just of what's under the seabed but of the sea itself and its amazing environmental asset base.

The decision, unfortunately, forces the taxpayer to fund the cost of decommissioning and the environmental clean-up and it leads to calls for a change to the regime by which titles are transferred. So, essentially, the company, Woodside, that owned it and could have paid for a clean-up got rid of it just in the nick of time, according to its calculations, before it went to a smaller company that was unable to do the maintenance and the clean-up. What's the impact? Unfortunately, it forces the taxpayer to fund the cost of decommissioning and the environmental clean-up and it leads to calls to change the regime by which a title can be transferred from a big, smart company with a whole lot of lawyers and an awful lot of money to a smaller company with fewer assets and perhaps a lot of innovation, desire and enterprise but less capacity to do the job of cleaning up. And it's clear, retrospectively, that NOGA didn't have the experience or the capital necessary to effectively manage the title.

Clearly, the current legislative framework is totally insufficient, and sensible reform is needed. The bill establishes four key reforms to the current regime. It provides for oversight of changes that occur in control of titles, and now includes offshore projects being transferred by the sale of shares—so somebody is going to be watching. The bill also includes electronic lodgement of applications and provides for expanded information-gathering powers to assess the suitability of entities wishing to enter the title regime—so somebody is going to be watching; previously they weren't. Finally, and most importantly, it expands existing powers to recall previous titleholders and decommission infrastructure and remediate the marine environment if the current titleholder is unable to do so. So if you were responsible for it and somebody else gets it and it starts to fall apart you don't just hand over your responsibility; that's really what's going on with one of the core parts of this bill.

I'm hopeful that the last reform I mentioned there will change the industry attitude by increasing the due diligence that is required of companies when they decide that they are going to offload the title; they can't just dump the problem on the next person and run away with the profits. There is nothing wrong with profit-making from investment in oil and gas; there is innovation there, and there are resource needs in our communities. But people who are in those responsible roles as the leaders of these big companies, which too frequently are multinational companies not Australian owned companies, cannot 'cut and run' and leave the Australian people with a tax bill. We can't afford to be spending money to clean up for these big companies; they should be doing it themselves.

I also note that the federal government has proposed a levy on the industry to fund the decommissioning of the Northern Endeavour. This policy debacle that we are discussing here has led to a new tax on the industry due to the gap in the previous legislation and the fact that the government didn't show up to do its day job around this issue of protecting our environment from leaky assets that are past their use-by date.

The new legislation means that those industry players who are doing the right thing, who play by the rules, are not unnecessarily penalised by the short-sighted actions of the few—at least, that's the plan. According to the explanatory memorandum, the new regime will ensure trailing liability across the entire life of the lease and expands the remedial directions provision in the OPGGS Act to require any former titleholder or related person of a current or former titleholder to carry out decommissioning if the current or immediate former titleholder is unable to do so. Trailing liability will be a measure of last resort where all other regulatory options have been exhausted. It aims to ensure that the risks and liabilities of petroleum activities remain the responsibility of those who held title, or have the ability to influence operations under the title, and to change industry behaviour by increasing the due diligence undertaking by companies in regard to who they sell the assets to. I think it's altogether fair and reasonable for companies that have profited from the extraction of our petroleum wealth to make their contribution to remediating the site. In the case of Northern Endeavour, it extracted 200 million barrels of oil, nearly $15 billion of oil in today's prices. It's obscene that, after that lucrative cargo is collected, ordinary Australian families should have to fork out $200 million in taxes to remediate that site.

APPEA, the industry's peak body, believes that rehabilitating all former oil rigs in Australia would cost, as Senator Small indicated, about $60 billion by 2040. So we've got to get this right and it's got to be fixed quickly. This is in fact a ticking time bomb for Australian taxpayers. And this legislation goes only some way—not all the way—to ensuring that this burden doesn't fall on everyday Australians but, rather, on the entity responsible for the infrastructure and the associated works required for rehabilitation. Without effective action, we could potentially see the phenomenon I've just been discussing of the Northern Endeavour proliferating right across the sector—as many mining companies have done—where oil giants dump soon-to-be-decommissioned assets onto dollar companies and then abdicate all responsibility for remediation of sites, leaving taxpayers footing multimillion dollar invoices. In my home state of New South Wales alone, the Audit Office of New South Wales found in 2017 that security deposits of the state's 450 mines 'do not include sufficient contingency, given the substantial risks and uncertainties associated with mine rehabilitation and closure' to fill in their voids or maintain vegetation when operations cease. Current practices support endeavour, entrepreneurship and jobs, but when you've made your money and the clean-up needs to be done, it is entirely unreasonable to ask someone else to do the job unless you pay them to do so.

Labor will be supporting this bill, as tardily as it has arrived. We support it because we believe in corporate responsibility and we absolutely believe in the health of the marine environment. I want to shout out to people back home on the Central Coast, where I haven't been now for six weeks. I'm missing my community and I'm missing seeing that beautiful ocean, the great Pacific Ocean, every single day. One of the most wonderful things about Australia is our abundant flora and fauna both on the land and in the sea. An oil spill off the coast would absolutely jeopardise our beloved, pristine maritime and marine environment, as well as thousands of tourist jobs.

Fear of an oil spill is why my local community on the Central Coast is so afraid of the development of the PEP 11 exploration permit, which they fear will blot the landscape as well as put us at risk of an environmental disaster on the Central Coast, not far from Newcastle and Sydney. After years of delay, the local member for Robertson, Ms Wicks, and Mr Morrison finally got the message from the community and put a message out via the media that they personally oppose PEP 11. But the gap between what this government says and what it then actually does widens by the day. It's more of a chasm, really, than a gap. I do note, however, that neither Mr Morrison nor Ms Wicks have responsibility for making an announcement about PEP 11. That goes to Minister Pitt.

Minister Pitt's deafening silence on the matter of PEP 11 licence extensions is very troubling to the people of the Central Coast. As a true Central Coast resident, I call on Minister Pitt to come clean, issue a public statement and, once and for all, rule out PEP 11. The Central Coast needs to have this sword of Damocles removed from over our heads. Keep our breaches pristine and unpolluted. Tell the truth, Minister Pitt; put it on the record. Put it in writing so that the community can actually be confident that there's no gap between the weasel words of the Prime Minister and Ms Wicks and the action of the government that Mr Morrison leads.

Despite the PM's impressionistic effort to look like he's with the Central Coast community, this failure to direct Minister Pitt to end the PEP 11 oil threat is real. Minister Pitt has the power to cut PEP 11 out of our lives, out of our environment, out of our pristine coastal waters and out of our community. Like a cancer, PEP 11 needs to be cut out right now, no mucking about, no ifs, no buts, no hints, no maybes—just gone.

Once again, with the Morrison government it's a minute late and a dollar short. As always with this government, their lack of leadership, their poor management, always has a cost.

The Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 should not have been triggered by a potential catastrophe in the Timor Sea. But we do have this legislation. We do have it before us at last. Thankfully, the government—perhaps having listened to wise public servants, who they so often seem to ignore—have come to the table in an effort to prevent future disasters. It's still going to cost the Australian people $200 million to fix up the Northern Endeavour problem that happened on the watch of this government. Well, it was supposed to be on the watch of this government; they actually weren't watching.

I commend the bill to the floor of the house, but in doing so, I note that there was an announcement of an industry-wide levy of 48c a barrel, which I referred to in my previous remarks. To the best of my knowledge, there is no bill, which would be a Treasury bill, that has been brought to the parliament to actually do the next vital step of the parliament— (Time expired)

12:29 pm

Photo of Larissa WatersLarissa Waters (Queensland, Australian Greens) Share this | | Hansard source

[by video link] I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2021. These bills strengthen Australia's offshore oil and gas regulatory regime by ensuring that the decommissioning of oil rigs is managed effectively and the cost—the immense cost—of that decommissioning doesn't fall to the taxpayer. It also clarifies the application of levies in relation to cross-boundary greenhouse gas titles.

These bills came about after the owner of the Northern Endeavour, Northern Oil & Gas, went into liquidation in February last year after being shut down the previous year by the offshore oil and gas regulator, after it had found corrosion issues that could have led to a major accident causing multiple fatalities and environmental damage. The facility was previously owned by Woodside, which had sold the Northern Endeavour to Northern Oil & Gas as a late-in-life asset just three years prior to the shutdown. This bill is really only part of the fix, with APPEA's position being that the cost liability in our offshore waters runs to some $60 billion over the next 30 years, so Woodside is once again getting off lightly. It has spread its liabilities right across the entire gas industry. The Greens will support this legislation because extracting any tax from the gas industry is like getting blood from a stone, particularly when the Australian Taxation Office has called the gas industry systemic non-payers of tax. There are billions in subsidies to the gas industry and freebies to avoid paying the petroleum resource rent tax. What a dud deal the gas industry is for the Australian taxpayer, not to mention the climate.

Whilst we'll be supporting this bill, we're not going to gloss over what Woodside is getting away with here. It donates at least $110,000 each year to each major party year in and year out. Over the last decade $2.1 million has been handed over by Woodside to the Liberal, National and Labor parties. That's quite a lot of influence.

Remember when the Howard government planted a bug in the cabinet room of East Timor's cabinet? It was for the commercial advantage of Woodside. The foreign minister at the time, Alexander Downer, went to work for Woodside after leaving parliament. Australia spied on a vulnerable foreign government to advance the interests of this gas company, and the only ones that are now paying for the price for that are, of course, witness K and Bernard Collaery, who exposed it. This government then scrapped the carbon price, which Woodside, as Australia's ninth-biggest polluter, had to pay, saving the company millions a year. Now this bill will save Woodside a bucketload yet again. We're in this mess because Woodside offloaded an old rig, the Northern Endeavour, to a fly-by-nighter—who went bankrupt within a very short time of acquiring the assets—so Woodside could conveniently avoid the decommissioning costs. Woodside has privatised the profits and socialised the losses, as so often happens in the mining industry. Any sense of justice says that they should pay the full costs, but a long-term levy on the industry for decommissioning is the next best solution.

There are so many gaps in the government's knowledge. We need a forensic audit of orphan wells and temporary plugs because the government doesn't know where they all are. Who's responsible for those? How many more of these assets are there going to be for future generations to decommission? There are hundreds of production platforms around this country, including in Bass Strait off the coast of Tasmania, and even Victoria's iconic Twelve Apostles are now under assault. The Victoria Labor government is on the brink of allowing new gas drilling on Keerray Woorroong country in the Port Campbell National Park, right near the Twelve Apostles, which comes just weeks after the federal Liberal government opened up vast areas for drilling just six kilometres from the Twelve Apostles. The Victorian state government should immediately withdraw support for new gas drilling in our pristine oceans and on land, including at the Twelve Apostles National Park. The Victorian government should reject the application by Beach Energy to begin gas production in Victorian waters on the doorstep of the Twelve Apostles. It should retract its support for the Liberal government's plans to drill for gas in the Commonwealth waters surrounding the Twelve Apostles Marine National Park, and, frankly, it should reinstate the moratorium on onshore gas drilling, to protect farms and bushland and the climate from new gas.

On that mention of climate, I foreshadow that I will be moving the second reading amendment standing in my name to the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 which adds to the end of the motion:

", but having regard to the role emissions from offshore petroleum projects play in atmospheric warming, the Senate:

(a) notes the recent report of the Intergovernmental Panel on Climate Change (IPCC) that the planet is warming at the fastest rate in at least 2000 years, rapidly approaching 1.5 degrees above pre-industrial levels;

(b) notes the recent statement by the International Energy Agency (IEA) that new coal, oil and gas projects, including offshore petroleum projects, must cease by 2021 if we hope to limit global temperature rise to 1.5 degrees; and

(c) calls on the Government to act urgently on the IPCC's and IEA's warnings".

I will be moving that second reading moment once we get to that stage. I understand there is already a second reading amendment before the chair.

The IEA don't issue those sorts of warnings lightly. They are a fairly conservative agency, and that is a clear call by them to get out of coal, oil and gas and to not have any new coal, oil and gas by the end of this year. And the IPCC report which was released a fortnight or so ago is, again, a clear, stark warning—after a long series of warnings—and it is just absolutely terrifying. It shows that the world is heating faster than scientists previously thought, sea level rise is increasing faster in Australia than in the rest of the world and the world is hotter now than it has been in the last 125,000 years. The IPCC report shows that we're on track for more frequent and more intense heatwaves, floods, fires and droughts. Australia has the most to lose, but our government is doing the least to stop it.

The Paris Agreement says that we should aim to limit global warming to 1½ degrees, but the IPCC report warns that we might hit that 1½ degrees within a decade, much sooner than previously projected. At 1½ degrees, those extreme drought events become twice as likely to occur. The most extreme heatwaves, the ones that we only used to see once or twice a century, would happen almost every five years. And at 1½ degrees we will lose most of what's left of the Great Barrier Reef, after having already lost 50 per cent of its coral cover with three successive bleaching events over the last six years.

The IPCC report makes it clear that, if we don't have huge cuts to pollution soon—and that means by 2030, not by a fictitious 2050—1½ degrees or even two degrees could be out of reach. We're risking a world where climate change could become unstoppable and the world could become uninhabitable. The tipping points are fast approaching—the collapse of the ice sheets at our poles, the dieback of the Amazon and arboreal forests, the shutdown of ocean currents, the melting of the Arctic permafrost. The warning is perfectly clear, and, after that IPCC report, coming on the heels of the IEA's strong call for no new oil and gas, the failure to have 2030 targets, on the opposition side, and the failure to lift our pathetic existing 2030 targets, on the government side, is criminal negligence.

Mr Morrison is failing to protect Australians from the climate crisis and he is putting lives at risk. Mr Morrison's 2030 targets are a death sentence, and the so-called opposition is letting him off the hook by continuing to not have 2030 targets at all. Twenty thirty is the deadline for the climate, and, if we haven't done enough by then, then I fear it will be too late. Australia has already warmed by 1.4 degrees, and we are more vulnerable than other countries to extreme weather. Mr Morrison should be out leading the charge for global action, but instead he is fibbing and spinning about his own failure to act, and the world knows it. It's 'I don't hold a hose' writ large.

Last month, in the middle of the G7 meeting, which was mostly focused on tackling climate action, the Prime Minister nipped out of that global meeting and video linked into the Perth conference of APPEA, the Petroleum Production and Exploration Association—the gas lobby—and announced 80,000 square kilometres of new ocean permits for the fossil fuel industry to be burnt, to produce carbon dioxide and to add to global warming in a climate emergency, when the rest of the world was in a meeting focused on taking action on the climate. That was our Prime Minister; this is our government. So there is a long way to go before we see determined and realistic action from the Morrison government when it comes to climate change. I suspect it will take a fresh government and the Greens in the balance of power for any semblance of science based climate policy to be delivered.

The Greens are pleased that the introduction of these bills is finally taking a step in the right direction, albeit a tiny and belated one, and we stand ready to work with both parties to address the climate crisis, as always. This isn't going away, and what we see is a legacy of bad behaviour by the fossil fuel industry, who don't pay their fair share of tax and who get a whole lot of handouts from taxpayers by this government after making very generous donations to both sides of politics. It is a quintessential example of regulatory capture and, in fact, it is a plutocracy. The mining companies have been effectively running the parliament for decades, and it is about time we ended those donations from that dirty sector, transitioned out of fossil fuels, embraced the fantastic economic opportunity of a fast and deep transition to renewable energy—with all the jobs and economic stimulus that that could provide—and finally heed the science on the climate crisis to save what's left of this precious and beautiful planet that we all share, not only for future generations but for the other species that we share it with but also for the people who are already experiencing the effects of climate change now. The food-producing land of our northern neighbours is becoming too saline to produce food. This is not some future problem. This is not 2030's problem; this is now's problem. It is certainly not 2050's problem, as this government would have us believe.

The Greens welcome that we have a skerrick of action taken on the offshore oil and gas industry cleaning up their own mess. Frankly, it is laughable that we even need legislation. They should have been cleaning up their own mess for decades without the need for this legislature to tell them to do so, but here we are. We will welcome and support these bills. As I foreshadowed, we will be moving a second reading amendment which calls for meaningful action on the climate crisis if we are to have any hope of a liveable future. I hope and implore the parties in the chamber to support that.

12:43 pm

Photo of David VanDavid Van (Victoria, Liberal Party) Share this | | Hansard source

I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2021. The Australian offshore oil and gas industry is subject to some of the world's most stringent and rigorous environmental regulation. The industry is committed to adhering to these regulations and to operating in an environmentally safe manner. As I have worked with many energy companies across my career, both upstream and downstream, I have seen firsthand how hard those companies work to ensure that the environment is protected throughout their operations. The industry currently applies some of the most extensive environmental management strategies to ensure its operations are conducted safely and responsibly. It is clear that the industry works to the highest standards and has a long history of world-class responsible environmental management.

It is important to recognise that Australia's offshore oil and gas industry has supported Australia's energy security and economic activity for over 50 years. Our economy has benefited from the export earnings, investment and employment opportunities that it has delivered for Australians. In my home state of Victoria, there are 23 offshore platforms and installations in the Bass Strait. This includes the new Marlon B platform and the Kipper subsea wells, which feed a network of around 600 kilometres of underwater pipelines.

These projects will provide Australians and Victorians with good jobs and economic support for Australia for decades to come, just as the creation of natural gas production and distribution in Victoria in the late 1960s along with cheap electricity from coal in those basins made the state a manufacturing powerhouse. With the moratoriums that have been in place in Victoria over recent years, the state is being brought to its knees on energy supply, and we need to correct that. But we need to do it with proper environmental regulation. If we are to properly support our resources sector, we must have the right regulatory framework in place. This will allow the sector to operate efficiently and to the safest standards possible. Having the right regulatory framework in place also ensures that best practice is followed through the entire life cycle of a project. As Australia's offshore petroleum industry continues to mature, there will be an increased focus on management of mid- to late-life assets. This includes managing declining production while preparing to decommission offshore facilities, wells and pipelines. This is sensible foresight by the government to deal with normal and expected changes occurring in the industry. There are particular points of the life cycle of any industry when regulatory frameworks and practices need to adapt to the changing circumstances. As the times change, the conditions in which we operate change, and we must change with those changing conditions. For the offshore oil and gas industry, that time is now and, as a government, we are responding accordingly. We must be prepared to deal with the future challenges that we will face as this industry begins to mature to ensure that the taxpayer, the shareholders, the workers and the natural environment are protected. These are all important considerations which these bills will address.

It is important that we strike the right balance between investment and managing an industry that is steadily maturing. This government wants to see that an industry that has benefited the nation so greatly is not left out in the cold with outdated regulations, and we don't want to see the taxpayer or the environment left holding the bag either. These bills will strengthen Australia's offshore oil and gas regulatory regime to ensure that emerging decommissioning works facing the industry are able to be managed effectively and the costs of decommissioning and offshore project remain with those who are responsible for carrying out the project. This regime will importantly ensure that the cost does not fall to the Australian taxpayer at the end of a project's life cycle. In the coming decades there will be a number of offshore projects which have exhausted their reserves and require decommissioning. This is a normal part of the resource development life cycle and, if properly managed, the decommissioning of these projects will not provide the government, or most importantly the taxpayer, with any unforeseen burdens. Fundamentally, that is what these bills intend to do to manage our resources and related infrastructure effectively. Thankfully, we will see the development of new projects, such as the Scarborough, Browse and Barossa gas projects, which will continue to support our economy and energy security in the coming decades. However, those projects that are in the latter part of their life cycle need the correct regulatory framework in place to ensure that their decommissioning is handled correctly. As the industry continues to mature, large companies may move to divest their mature assets to focus on new areas of production potential. Australia can expect to see as new entrants to the industry smaller companies with joint ventures that bring a fresh perspective and a different risk profile.

This bill implements aspects of the government's enhanced offshore oil and gas decommissioning framework and the relevant recommendations from the independent review into the circumstances leading to the administration and liquidation of Northern Oil & Gas Australia. By amending the act to enhance regulatory oversight of activities the companies may undertake during the mid- to late-life of a project, including decommissioning, this bill reduces the risk of another Northern Oil & Gas Australia-like incident occurring again.

For those of you who are unaware of the Northern Oil & Gas Australia incident, in February 2020 this group went into liquidation, leaving the Northern Endeavour floating production storage and offtake facility without an operator. This was an unfortunate incident that left the government responsible for ensuring the safety of the facility and conducting critical maintenance work. How the government responded to this incident, and the implementation of these bills, sends a strong signal to the world that Australia will maintain its global reputation as a safe, reliable and responsible country for offshore oil and gas development.

These bills ensure that companies operating in Australia's offshore oil and gas regulatory regime are capable, competent and responsible in managing their offshore projects by ensuring that when projects are decommissioned they are managed effectively and that the associated costs of decommissioning, importantly, remain with the entity involved. We want to ensure that we have the best oversight framework and that the offshore oil and gas industry manages the current and future decommissioning challenges to ensure that our world-class offshore oil and gas industry remains exactly that: world-class.

The first bill, the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021, provides government oversight of transactions involving a change in the control of a petroleum or greenhouse gas titleholder. The sale of an offshore gas project is intended to be captured as a transfer of the title under the act. However, offshore projects can also be transferred by the sale of the shares in a company that owns and operates the project. These transactions are not currently captured by the act, because there is no transfer of interests in the petroleum title or titles. This is essential to ensure that mature assets are transferred in line with government regulation while maintaining an environment that encourages investment. If regulatory approval is not obtained for this type of corporate transaction, significant civil penalties may be imposed. In addition, the title can also be cancelled. This approach is consistent with similar regimes across the Commonwealth.

It is also important that regulations provide for trailing liability, and this is what this bill encompasses. Through the expansion of the remedial directions provisions in the act, any former titleholder can be called upon to carry out decommissioning if the current or immediate former titleholder is unable to do so. This, of course, is intended to be a measure of last resort where all other options have been exhausted. However, the Northern Oil & Gas Australia incident reinforced the fact that we as a government must be prepared for all scenarios. As the act stands now, only an immediate former titleholder can be directed to decommission and remediate an area. This reduces the environmental, health and safety risks associated with the potential abandonment of assets and infrastructure and ensures that risks and liabilities of petroleum activities remain the responsibility of those who have been involved in the development of the project and not the government or taxpayers. This will set the expectation that sellers will undertake appropriate due diligence before selling assets, titles and infrastructure.

In this bill, amendments are provided to improve the administration of petroleum and greenhouse gas titles. We want to ensure that, while best practice is being followed, assets can be transferred in the most effective manner possible. As I mentioned earlier, as the industry begins to mature, we expect to see new entrants to the industry who bring a different risk profile. By improving the administration of petroleum and greenhouse gas titles, we can ensure that the transfer of these assets is done without fault and in line with government regulation.

The Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2021 amends the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003 to enable NOPSEMA, the National Offshore Petroleum Safety and Environmental Management Authority, to expand existing cost recovery mechanisms to former titleholders or related persons when issued a direction. Again, this will ensure that what occurred in the Northern Oil & Gas Australia incident will not occur again.

The government has been actively working with key stakeholders in the offshore oil and gas industry to seek advice on reforms to make sure the circumstances surrounding the Northern Endeavour do not happen again. We have a world-class offshore oil and gas industry, and we intend to keep it that way. Our oceans represent some of the most diverse and pristine ecosystems in the world, and this government is committed to ensuring that they are protected. These bills are one layer to the many components we're putting in place to achieve this. Recently, the National Plastic Plan was announced with the aim of reducing the amount of plastics that can impact our environment. In April this year, the Prime Minister announced an additional $100 million investment to ensure that we remain a world leader in marine park management.

Our oceans are the lifeblood of the Australian economy. They not only supply thousands of jobs around Australia but play a vital role in maintaining a healthy planet. It is our duty to ensure that those who rely on the ocean and interact with it, whether for enjoyment or for commercial reasons, do so in a responsible manner.

Our resources sector is absolutely vital to our economy and our energy security. Importantly, this government is committed to ensuring that this critical industry has proper regulations around it so it can continue to operate in an environmentally safe manner.

12:55 pm

Photo of Pauline HansonPauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

[by video link] I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021. The purpose of this bill is to stop offshore petroleum companies entering transactions where their dominant purpose is the avoidance of the decommissioning and remediation costs of end-of-life assets. The proposed legislation is a regulatory response to Woodside's plan to avoid liabilities in the Timor Sea, which ends with the Australian taxpayer being on the hook for $1.6 billion.

The story behind this legislation needs to be put on the record, because it's more than a story of incompetence by the regulators and incompetence by a parade of government ministers drawn from the National Party. It is also the story of a government which prefers the interests of its foreign-owned petroleum companies over the interests of Australian citizens. So, let us begin the story.

In September 2015 Woodside Petroleum entered into an agreement to dispose of its majority interest in the Laminaria and Coralina joint venture, which included the Northern Endeavour, a floating oil production storage and offloading facility. The Laminaria and Coralina oil leases are located 550 kilometres off Darwin under 340 metres of water in the Timor Sea. By 2014, these oil fields had produced 100 per cent of their expected production, and Woodside decided these petroleum assets had reached the end of their life. Woodside's Timor Sea petroleum assets were unsellable because the liabilities far outweighed any asset value. Woodside considered decommissioning these oil assets but instead came up with a less costly plan—they decided to transfer the assets and liabilities to a small company which would eventually go bust, leaving the Australian taxpayer with the clean-up costs. Entering a transaction where the dominant purpose was the avoidance of a billion-dollar clean-up cost made sense; there were no anti-avoidance provisions in the Offshore Petroleum and Greenhouse Gas Storage Act 2006, so what they planned to do was legal. In 2015, Woodside paid a small group of companies $24 million to take over their Timor Sea assets and liabilities—the first act of this tragedy had been written. A handful of foreign-owned transnational companies, which operate in Australia's offshore waters, knew Woodside was offloading its liabilities, initially to a small company but later to the Australian taxpayers. It seems only the regulators and the minister did not understand what was happening. In any case, the industry watched to see if Woodside would get away with their plan. If they did, it meant it would be okay for them to do the same. The industry did not have to wait long to see if Woodside's sting would work.

The second act of this tragedy began when, in July 2019, the National Offshore Petroleum Safety and Environmental Management Authority, NOPSEMA, issued a prohibition notice on the Northern Endeavour. The owners of the Northern Endeavour pleaded for the prohibition notice to be replaced by an improvement notice, which would have given them time to generate funds and undertake repairs. The owners of the Northern Endeavour showed good faith by spending millions of dollars on repairs, but, without any road map back to production, the business went into administration, then liquidation. Two hundred and fifty Australians lost their jobs.

In February 2020, the Australian government became liable for up to $1 billion or more of maintenance and clean-up costs. This event is without precedent. The Northern Endeavour Taskforce was established to manage the Northern Endeavour. To date, $200 million has been spent on weekly maintenance costs of this oil ship—$200 million. I understand a further $382 million will be spent between now and mid-2023, when the Northern Endeavour is expected to be towed away. This additional cost is based on the current weekly maintenance cost of $4 million, for a further 96 weeks. So far, we can see the taxpayer on the hook for $582 million, enough to build a 300-bed hospital in regional Queensland.

In March 2020, Steve Walker was asked to review the circumstances leading up to the government taking over Timor Sea assets previously owned by Woodside Petroleum. In June 2020, the Walker review was published. It was made public in September 2020, after a freedom-of-information request. The report, largely written by NOPSEMA, exonerates NOPSEMA and is a whitewash. NOPSEMA initially said health and environmental concerns were the reasons for the July 2019 prohibition notice on the Northern Endeavour, but on 18 May 2021 they told me health and safety were their concerns. What happened to their environmental concerns? Those environmental concerns disappeared after the government commissioned Woodside to report on the environmental problems arising from the decommissioning of the Northern Endeavour. We will never know what is in that $8.8 million report, because it is marked 'cabinet-in-confidence'. What are they hiding? If NOPSEMA had commissioned the Woodside report before they issued a prohibition notice to stop production on the Northern Endeavour, then it is reasonable to assume 250 Australians might not have lost their jobs and taxpayers would not have lost $600 million that cannot be recovered.

The bill we are debating today makes no provision for Woodside to pay for cleaning up the Northern Endeavour. That is the reason why I have proposed an amendment to make the legislation retrospective to 1 January 2015. If the legislation operates from 1 January 2015, then Woodside would pay for the costs it has avoided. If my Woodside amendment were supported, there would be no need for the proposed industry-wide levy announced in the May 2021 budget. The levy of 48c per barrel means the whole industry, not Woodside, will pay to clean up the Northern Endeavour and its associated oilfields. I think it's entirely understandable that the industry is resisting this levy. The government is still trying to persuade the offshore petroleum industry to pay for Woodside's liabilities, and that is the reason why, after 12 months, there is no legislation before the Senate. There is no reason to believe an industry-wide levy will be introduced. Woodside Petroleum's gift of its liabilities to a small Australian company was like the bottom-of-the-harbour tax schemes, which sent companies into liquidation, leaving the tax commissioner as the only creditor. The government closed these schemes by making it a criminal offence to enter into them, but this time there are no consequences for Woodside.

To understand why the government is willing to let the Australian taxpayer fork out up to a billion dollars in place of Woodside, we need to look at the relationship between Woodside Petroleum and National Party ministers. Woodside is a corporate member of the National Party. This means Woodside Petroleum pays $55,000 a year for special access to National Party ministers, who, in a coalition government, traditionally hold the portfolio for offshore petroleum. Woodside Petroleum is not the only petroleum company to be a corporate member of the National Party. The conflict of interest, apparent or real, is obvious. Why does the Prime Minister allow this conflict of interest to continue? The government knows much more than it's telling. But its decision not to make this legislation retrospective to catch the Woodside avoidance transaction makes no sense if you genuinely represent the interests of Australians. The Woodside sting means they were able to recently enter into an agreement with BHP with a billion dollars more in assets than they would otherwise have had. It's a lot of money and enough to grease a few palms.

Labor intend to support the government to pass this legislation without making it retrospective, and they are doing that because something is better than nothing with an estimated industry liability of $60 billion in cleaning up end-of-life petroleum assets. The government and Labor could get together to make the legislation retrospective and save the taxpayer a couple of billion dollars but they fear the power of petroleum companies with deep pockets so close to the next federal election.

These stories will never be told by the two big parties because too often they put their future over the interests of Australians. But we all know One Nation never puts its interests before the people of Australia. I am constantly calling for accountability. At Senate estimates a few years ago I questioned the then minister for resources, Senator Matt Canavan, with regard to the Northern Endeavour. He was evasive and didn't particularly want to answer my direct questions. Something stinks to high heaven with regard to the Northern Endeavour, and you will never convince me otherwise.

I will not support the legislation unless my amendment calling for Woodside and not the taxpayers to pay for the costs is supported. If the Labor Party oppose my amendment, they will also have to tell the Australian taxpayers why. I have questioned for years our oil and gas resources—about the profits and about the taxes that multinationals should be paying but don't. That's only because the government is not pursuing it. There have been a lot of cover-ups that have happened, and this is the biggest cover-up that I've ever seen. Woodside is responsible and should pay for these costs, not the Australian taxpayer to the tune of billions of dollars.

As I've said, where is the legislation that is going to impose this levy? We haven't seen it. It's not before us. So it's all smoke and mirrors. It's all talk. Who is going to end up paying this bill? It is going to be you, the taxpayer, and me, out of our taxes. We have to stand up to this. I'm calling on the Labor Party, I'm calling on the crossbenchers and I'm calling on the Greens party: let common sense prevail here. A company has done the wrong thing. They got rid of their assets to get out of the clean-up costs. That is the guts of this whole issue that I'm talking about now. We have to make sure that they pay for it. The Australian government expects any other Australian to pay for what they are responsible for, and that's all I'm asking for. So I hope that the Labor Party does come on board with me on this and I hope that the coalition government sees the common sense in this—that Woodside should be paying for it—because otherwise I will continue to ask: why is Woodside in cooperation with the National Party? Why are they paying $55,000 a year to have access to National Party ministers who deal with petroleum, oil and gas? Is it a conflict of interest? It certainly is. Anyway, the public will judge them, as I'm judging them. Like I said, I think it stinks to high heaven.

1:09 pm

Photo of Malcolm RobertsMalcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

[by video link] As a servant to the people of Queensland and Australia, I note that, while the government's bill, the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill, has some merit, it raises far more questions than it answers.

Before explaining that, I would like to note that I'm in quarantine. I appreciate very much my staff and the staff at 2020 in Canberra for their patience in setting up the remote parliament for me, despite my lag in technology. Nonetheless, I dislike this set-up. It is a mockery. I would much prefer travelling to Canberra, where I can see eyeballs and read faces. What we are going through in our country is a nonsense. It is a complete nonsense. There is a risk, but it is not being managed.

We see the same mismanagement in oil and gas as well. On 20 September 2019, a group of companies called the Northern Oil & Gas Australia Pty Ltd—NOGA as it was called—went into voluntary administration and subsequently, on 7 February 2020, into liquidation. As a consequence of the Northern Oil & Gas Australia liquidation, the Commonwealth government set up the Northern Endeavour Temporary Operations Program, taking control of the Northern Endeavourand, I take it, Australian taxpayers took on the costs—until a longer term solution could be agreed to. As usual, this parliament is looking after big corporate mates at the cost of taxpayers. Australian taxpayers should not be made to pay to the clean-up bills of multinational companies who make huge profits, pay no Australian company taxes and leave us to fix the mess they leave behind.

We support a bill that provides for changes to enable the oversight and scrutiny of transactions involving a change of ownership or control of a petroleum or gas titleholder through a merger or takeover. The amendment expands existing powers to call back previous titleholders to decommission infrastructure, and to remediate the marine environment in the title area where the current or immediate former titleholder is unable to do so. We support the intention of ensuring that an entity should not transfer its assets to avoid the cost of cleaning up at the end of a profitable project and leaving the cost behind to be paid by taxpayers.

The lessons learnt from the Northern Endeavour have shown that the current regulatory framework is vulnerable. None of the regulatory controls anticipated the circumstances of a titleholder liquidation. This is a serious concern. As such, events could be repeated as Australia's offshore industry matures and late-life assets are likely to be passed from established major oil companies to smaller less substantial titleholders. The concept of trailing liability, whereby a titleholder would be continually liable for the decommissioning and removal of its offshore assets, even after selling its assets and its interest in a title, ensures that someone other than the taxpayer is responsible for the liability—and that's exactly as it should be. With an estimated $60 billion in anticipated decommissioning liabilities falling due over the next 30 years, this government and this parliament must ensure it can call upon former titleholders to decommission and to remediate the title area in the unlikely event that the current titleholder is unable to do so.

We are the world's largest exporter of energy, the largest exporter of liquefied natural gas and the second-largest exporter of coal, yet we have the world's highest domestic gas prices, and our electricity prices are three times that of countries who use our coal to generate electricity. Now, why is that? Why can't we use more of our own gas domestically? Who made the deals that cut Australians out? This parliament made those deals over many decades. Why can't we build a transnational pipeline to bring North West Shelf gas to the east and convert it to produce liquid fuels like petrol and diesel? This gas is suitable for that. Why can't we use the gas itself to power cars now?

Liberal-Labor-Nationals are clearly in election mode, promoting policies and changes that they think will win them votes. The reality is none of them have real plans and real solutions to get us out of COVID over the next year, or to make the economy safe. This amendment—increasing the responsibility of petroleum gas producers—is an easy vote winner. But where are the hard questions being answered? Liberal-Labor-Nationals lack the will to listen and the courage to do something novel and appropriate for the people of Australia in our national interest. We Australians need alternative leadership that we can trust, and One Nation stand ready to address the big issues and to take a position that puts everyday Australians first. We can be sure that China and our Asian neighbours will continue using hydrocarbon fuels like gas, coal and oil for decades to come—our natural gas and our coal for decades to come. What's more, China exploits labour, sacrifices the environment and sacrifices worker safety, and yet we still buy their products. And Liberal-Labor-Nationals ignore calls for local manufacturing and industry development, as well as calls to support small business.

There are other facts that need consideration. The government—indeed, the parliament—repeatedly bets on technology that is unproven, does not provide jobs to replace those lost in coal powered generators, and is very expensive. At the moment hydrogen, the latest energy fad, costs $6 a kilo to produce. The government's dream, this parliament's dream, is to bring it down to $2 per kilo. Even at that price, far-fetched though it is, it would produce electricity at $200 per megawatt hour—four times the current cost of coal fired electricity. With solar, we have a dependence on China for the installation, the components and the generators. The cost is high, and the reliability of solar electricity is atrocious; the stability is just not there. And we lose jobs. For every job created by solar and wind, we lose 2.2 jobs in the real economy. As for wind, again, like solar, there's a dependence on China, with exorbitantly high costs, low reliability and poor stability. It's unstable and, again, results in the loss of jobs. We have an abundance of clean gas and coal. We should be an energy power, as we were when international investors flocked to the Hunter Valley, Central Queensland and Victoria to build aluminium refineries. These jobs are now gone, and, under current Liberal-Labor-Nationals policies, manufacturing industry jobs are doomed.

Turning to this amendment again, it's a soft policy for the voters. Why is the government not legislating to protect us from the huge cost of cleaning up site pollution caused by renewable energy generators? These sites are not forever. They last 10 to 15 years. That's it. Then they're redundant; they're gone. Actually, the assets are not gone, the eyesores are not gone and the pollution is not gone, but their productive capacity is finished. Eventually, like any machine, these generators will need to be repaired and replaced, and their components are expensive and highly toxic—for example, boron, gallium arsenide and cadmium telluride, which could cause serious or permanent injury such as nausea, skin problems, hypertension, weakness, kidney and liver disorders, heart palpitations, anxiety, depression and cancers.

Australians deserve far better. We all deserve to know the facts and the real risks and costs of these fad energies, these parasitic malinvestments. Australians need to be shown the agreements and protections that renewable energy providers have signed up for, and the generators need to be committed to complementary legislation protections to this amendment. The current legislation must be replicated to capture these energy generators, such as solar and wind power. Remember: we're paying huge government subsidies to them, and yet they're not committed to the long-term protection of our environment. They're a parasitic threat to our precious natural environment.

These changes require complementary legislation in the legislation governing renewables to ensure that they do not pollute our land, waterways, children's playgrounds, agricultural crops and the water we drink. The taxpayer should not be left with the clean-up bill. Fair is fair. None of us would want to see a farmer given back land after it had been used for a solar or wind generation only to find that the toxic waste on it is a safety risk to us all, a desert memorial to renewables.

This legislation is a bandaid. If Liberal-Labor-Nationals were serious, then we would have a level playing field for all energy sources, with all being judged equally on their quality, reliability and cost. This bill does not go far enough. The National Party's mates intended to leave the clean-up of the Northern Endeavour to the taxpayer, and the Nationals and Liberals were very quick to agree. That seems to be a pattern. One Nation aims to close this loophole. Senator Hanson has circulated a retrospective amendment to ensure that the company that made the vast profits from this project pays for the clean-up. Any party who does not support this amendment will be supporting an increase in pollution—and that's real pollution—and an increase in the bill for taxpayers. This government, and Labor, must show us it is serious about Northern Endeavour. The government must also go further and present similar legislation to protect us from toxic pollution from renewables.

Australia needs alternative leadership that Australians can trust, and we stand ready to address the big issues and to take a position that puts everyday Australians first. One Nation supports the government's amendment, provided our retrospective amendment is adopted. We support cutting all subsidies to renewables and letting them compete in a free-market economy against hydrocarbon fuels to generate cheap, clean, affordable, reliable electricity for Australian businesses and homes.

I want to address some comments made by Senator Waters in her address earlier this morning. All of her comments with regard to climate were based on the United Nations Intergovernmental Panel on Climate Change and its lies and propaganda that the Greens wallow in and parade and push, with no consequences and no thought for Australians. No UN catastrophic climate forecast has ever come true—not one. There is no basis for any of these UNIPCC claims that the Greens peddle. Never has the United Nations Intergovernmental Panel on Climate Change provided the empirical scientific evidence—within a framework, proving cause and effect—that carbon dioxide from human activity will affect the climate and needs to be cut. We will be dealing with this on a date fairly soon. Until then we will continue to expose the government.

We note that today is day 714 since I challenged the Greens—Senator Di Natale, who was the leader at the time, and Senator Waters—to a debate on the empirical scientific evidence that shows carbon dioxide from human activity affects climate and needs to be cut and a debate on the corruption of climate science by the United Nations and other organisations. It's been 11 years since I first challenged Senator Waters in a public forum where we were both speaking. Every time, she has run from me. That's because there is no evidence. Now we have a toxic legacy that we will need to clean up in the future from this mess. But, in the meantime, coming back to this legislation, we support the bill, provided that it includes our amendment to make it retrospective so that the perpetrators of the Northern Oil & Gas Australia disaster are held accountable.

1:22 pm

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Minister for Families and Social Services) Share this | | Hansard source

The Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to strengthen Australia's offshore oil and gas regulatory regime. The bill strikes an appropriate balance between implementing regulatory safeguards for Australian taxpayers, managing the impost on industry and encouraging continued investment in oil and gas development. I thank senators for the contribution they have made to this bill, and I commend the bill to the chamber.

Photo of Claire ChandlerClaire Chandler (Tasmania, Liberal Party) Share this | | Hansard source

The question is that the second reading amendment moved by Senator Brown be agreed to.

Question negatived.

An Australian Greens amendment was foreshadowed by Senator Waters in her contribution. Senator Hanson-Young, would you be able to move that second reading amendment on Senator Waters's behalf?

1:23 pm

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

At the request of Senator Waters, I move:

At the end of the motion, add ", but having regard to the role emissions from offshore petroleum projects play in atmospheric warming, the Senate:

(a) notes the recent report of the Intergovernmental Panel on Climate Change (IPCC) that the planet is warming at the fastest rate in at least 2000 years, rapidly approaching 1.5 degrees above pre-industrial levels;

(b) notes the recent statement by the International Energy Agency (IEA) that new coal, oil and gas projects, including offshore petroleum projects, must cease by 2021 if we hope to limit global temperature rise to 1.5 degrees; and

(c) calls on the Government to act urgently on the IPCC's and IEA's warnings".

Question negatived.

We will not call a division, given the numbers and the difficulties today, but I would like the Australian Greens to be recorded as supporting the amendment. If other parties could put their positions, that would be helpful. Otherwise, I will call a division.

1:24 pm

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Minister for Families and Social Services) Share this | | Hansard source

The government opposes the amendment as put forward on sheet 1386. I also note, in the absence of Senator Patrick from the chamber, that my understanding is that he supports your amendment.

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) Share this | | Hansard source

Labor also opposes the Greens amendment on sheet 1386.

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Minister for Families and Social Services) Share this | | Hansard source

by leave—In addition to that, my understanding is that Senator Hanson and Senator Roberts, who obviously can speak for themselves, and Senator Griff have indicated that they oppose this amendment.

Photo of Claire ChandlerClaire Chandler (Tasmania, Liberal Party) Share this | | Hansard source

The question now is that the bills be read a second time.

Question agreed to.

Bills read a second time.