Bruce Scott (Maranoa, National Party) Share this | Hansard source

I rise this morning to address the Australian Energy Market Amendment (Gas Legislation) Bill 2006. The purpose of the bill is to bring about an agreement of all Australian jurisdictions committed to bringing the regulation of the electricity and gas markets under a new national governance arrangement. This is important because the national gas laws will reduce the regulatory burden on industry. It will improve service provisions, it will bring about certainty and it will protect the long-term interests of consumers. That is extremely important.

This national governance arrangement will be important to the energy industry. It will be particularly important in my electorate because of the jobs that are associated with the gas industry; the generation of electricity from gas is an important job generator in my electorate.

One of the important aspects of this legislation is that it recognises the fact that gas, like electricity, is not just confined to a market within a state. Energy now flows across borders—both electricity and gas—to provide an energy source in other states. That is never more apparent than in the south-west corner of my electorate in the Cooper Basin, where there is a Santos investment at the Ballera gas field which flows to Moomba in South Australia. Santos also provides a gas pipeline to New South Wales. That gas also flows through a network of pipelines to Brisbane, Mount Isa and Gladstone. This is a clear demonstration of how the gas that comes out of the Cooper Basin in Queensland is transported through those pipelines into other states and into those energy markets.

This bill will give great confidence to companies that invest in exploration in the gas industry and will also aid in the development of markets flowing from the gas that they find. It also will ensure that there is national competition in the marketplace—which we all want to see. I know consumers will benefit from that. It gives certainty to those investment companies and their shareholders that there is a competitive market out there. This bill will give them the confidence of knowing that there is a market and that there is regime that will encourage competition and further exploration.

The Surat Basin is an underdeveloped coal basin in my electorate. It has great potential, not only for the extraction of coal but also in the production of coal seam methane. Coal seam methane is a very clean form of energy. It is a technology that, in the last 10 to 15 years, has been refined and developed largely by Australian companies. I think we are going to see more and more coal seam methane extracted from coal fields. This is important in that, should those coal seams one day be exploited, they will be a safer mine to operate, because the coal seam methane has been extracted from the coal bed, making it a less dangerous environment in which to operate underground coal extraction.

Origin Energy is the company in my electorate that is involved in the extraction of coal seam methane. It plans to build two power stations at the site where it is extracting this coal seam methane. One will be at Spring Gully. I hoped the company would put in a second one there, but there is some debate at the moment about whether that will proceed or whether it will be located at what is known as the Braemar interconnection site for the electricity grid that is being established in these fields to feed electricity into the national electricity market.

I recently had a briefing in my home town of Roma, and Santos, BHP, General Electric and Energex have been the recipients of some $75 million from the Commonwealth government to bring together a range of technologies that will see them build a 100-megawatt power station utilising coal seam methane as its energy source. The $75 million is important because it will assist in the construction of that power station, a zero emissions power station.

With the debate about climate change and emissions, not only here in Australia but also world wide, it is important that we are able to prove and to see proven these known technologies, and it will be this power station at Fairview, north-east of Injune in my electorate, that will be the first in the world to bring together all those known technologies with the support of government money to build that power station. Importantly, the power that is generated from that power station will then be fed into a power link grid to take it into the national power grid, which then obviously feeds into the national electricity market. It is a very important project, once again demonstrating this federal government’s commitment to investing in new and clean technologies that reduce emissions. In this case, it is the generation of power from coal seam methane gas, and it is another example of the federal government’s commitment to addressing the issue of emissions within Australia.

The investment will see the coal seam methane extracted and used to generate electricity, but the carbon dioxide that is produced when that coal seam methane is burnt in those turbines will be extracted at the exhaust level and then returned underground, whence it came. This coal seam methane area is something like 700 to 800 metres below the ground, and when the carbon dioxide is returned to the coal bed it actually attaches to the coal. Unlike the methane before it is extracted, which is quite volatile and mobile, the carbon dioxide that is returned to the coal bed actually attaches to the coal. It actually makes the coal seam much safer should it ever be extracted. Being such a deep deposit, it is probably unlikely that we will see it extracted in our lifetime. But we should never say never in life. Should it ever be extracted at some time in the future, it will be a much safer deposit because it will not be as volatile as it currently is with the coal seam methane in the coal bed.

The other important thing is that the water that is extracted as part of the process of extracting coal seam methane will be used for the cooling of the power station. So we will have a power plant, in situ, that is using coal seam methane technology to generate power and the water that comes up with the coal seam methane will be used to cool the power plant. That is a tremendous step forward, given that water is such a valuable commodity in Australia today. We know just how valuable it is wherever we live in Australia—whether it is in the outback or in an urban situation. The water that is currently in many of these extraction sites is evaporating into the atmosphere and will now be used in a productive way to cool the power plant, rather than evaporating into the atmosphere and being wasted. The power generated feeds into the national grid, which provides an opportunity for the investment company to sell power into the national power market, thereby creating an enormous number of jobs.

I am quite excited about this project because it is the very first not only in Australia but also in the world. This project uses the known technology of extraction of coal seam methane. It generates power at the site, strips off the water and uses it for cooling the power plant. But, importantly, the carbon dioxide created by the power that is generated will not be emitted into the atmosphere as the emissions are pumped back down the hole and will ultimately rest in a carbon sink. Once this technology is further developed it will afford the opportunity for other power plants, such as coal-fired power plants, to utilise it and bury the carbon dioxide that they would otherwise emit into the atmosphere. I am not quite sure whether that will come about. We have to prove the first step of the technology and get it to work. We will then have an opportunity to return the carbon dioxide which comes from coal-fired power stations to the coal bed and have zero emission power stations. It is a win all round. This amendment bill will, I am sure, bring about greater security for the generation of power in Australia and will give security and confidence not only to companies that invest in the exploration of gas but also to the investors who invest in pipelines across Australia. The regulatory regime is constant across state borders and I believe that will help to further develop the industry. I support the legislation.

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