Dick Adams (Lyons, Australian Labor Party) Share this | Hansard source

On behalf of the Standing Committee on Primary Industries and Resources, I present the committee’s report entitled Down Under: greenhouse gas storage—review of the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill, together with the minutes of proceedings.

Ordered that the report be made a parliamentary paper.

On behalf of the Standing Committee on Primary Industries and Resources, I have the pleasure of presenting our report entitled Down Under: greenhouse gas storage—review of the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill. This report assesses the proposed legislation introduced into the parliament by the Minister for Resources, Energy and Tourism, the Hon. Martin Ferguson MP, on 18 June 2008. The bill provides for the storage of greenhouse gas substances in offshore Commonwealth waters. Through the titles and rights established by the bill, proponents will set up commercial operations to permanently store captured carbon dioxide, and as such abate a proportion of Australia’s emissions.

The committee have reviewed the proposed legislation and largely find in favour of it. With the recommendations we suggest, the committee believe that it will be important, successful legislation. It will provide a much-needed mitigation option for Australia’s carbon dioxide emissions while also allowing for the continued exploitation of our coal reserves—so important to our energy security.

The proposed management of interactions between greenhouse gas storage proponents and pre-existing petroleum titleholders was of particular interest to the committee during its deliberations. The potential for conflict between these two parties was identified, especially with regard to the protection afforded pre-existing petroleum titleholders, which could potentially frustrate the establishment of greenhouse gas storage activities in some areas. It was felt that, while the bill largely strikes an appropriate balance between these two key parties, further improvements could be made. As such, the committee recommends in this report that the best solution would be for the legislation to include a clause to provide the responsible Commonwealth minister with the power to direct both parties to come to commercial agreements in good faith.

The cost of establishing greenhouse gas storage operations is likely to be vast. It will require new technology, specialist expertise and significant time frames in order to become effective. As such, the committee has recommended financial incentives from the government to both promote investment in and encourage uptake of this important new industry. Also, to encourage the early injection of carbon dioxide, the committee recommends in this report that those proponents who can demonstrate an available carbon dioxide stream be favoured for acreage release.

Through its inquiry process the committee also identified the large and possibly vital role the petroleum industry is likely to play in the uptake of greenhouse gas storage in offshore Commonwealth waters. The petroleum companies currently hold most of the technical knowledge and expertise required for the establishment of greenhouse gas storage. They are also current tenement holders in offshore Commonwealth waters. Therefore the committee has recommended that petroleum titleholders be offered a chance to combine a greenhouse gas storage title with their production or exploration permits.

The issue of long-term liability was also identified by the committee as highly significant. Due to the extensive time frames over which the carbon dioxide is to be stored, the question of liability is particularly complex. The bill as it stands is silent on liability, leaving it entirely to common law. The committee recommend in our report that long-term liability be transferred from the operator to the government after site closure conditions have been met, as this is likely to act as an incentive for greenhouse gas storage proponents to maintain high management standards as well as create greater investment certainty.

The committee congratulates the minister for this pioneering legislation and acknowledges that it sets the scene for Australia to lead the world in this new technology, which has great potential to make deep cuts in carbon dioxide emissions while continuing to support our energy security. The committee supports the proposed legislation and believes that it provides an appropriate groundwork for the establishment of a national greenhouse gas storage industry in Australia.

I would like to express, on behalf of the committee, our gratitude to all those who participated in the inquiry; to the staff of the secretariat who were involved in preparing the report Bill Pender, John Miller and Sophia Nicolle; and to you, Mr Deputy Speaker Sidebottom, the member for Braddon, for your involvement and commitment to getting this good work done. To my deputy chair, the member for Hume, I thank you for all the work you did as well, during a difficult time for you. On behalf of the committee I commend the report to the House.

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