Alby Schultz (Hume, Liberal Party) Share this | Hansard source

I rise in support of the Chair of the Standing Com-mittee on Primary Industries and Resources to speak on the review of the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008. The committee’s report, entitled Down Under: greenhouse gas storage, has made some recommendations to the draft legislation to promote the legislation’s effectiveness. Recommendations include refinements to: ensure that the extraction of petroleum and the storage of carbon do not preclude other activity occurring nearby; provide the minister with the power to insist that, where respective titles overlap, the parties negotiate in good faith; ensure that all regulations and guidelines under this proposed legislation are released to industry and the public as a matter of urgency well before the legislation is passed; and establish a process for the transfer of long-term liability from a greenhouse gas operator to the government, after strict site closure criteria are met, in order to create business and investment certainty.

This bill will establish a new range of offshore titles providing for the transportation by pipeline, and injection and storage in geological formations, of carbon dioxide and potentially other greenhouse gases. The Offshore Petroleum Act 2006, as amended by the bill, will continue to apply only in the Commonwealth offshore jurisdiction. The new titles will therefore be located in the area between the outer limits of the state and Northern Territory coastal waters and the outer limit of the Australian continental shelf. A licence will authorise the injection and storage of a ‘greenhouse gas substance’. This will initially mean carbon dioxide, together with any substances incidentally derived from the capture or injection and storage processes, including added chemical detection agents to assist the tracing of the injected substance. There is a power by regulation to extend the meaning of ‘greenhouse gas substance’ to include other substances. This regulation-making power is not expected to be used until such time as the protocol to the London dumping convention is amended to permit geological storage of those other substances.

Under the proposed legislative model, the Australian government will be primarily responsible for administering the regulation in Commonwealth waters, rather than the current joint authority arrangements applying to the petroleum industry. The responsible Commonwealth minister will have ultimate regulatory responsibility. This approach is consistent with industry’s preference for a consistent and harmonised national approach and will improve the efficiency of project approvals and minimise administrative duplication.

The bill establishes three categories of ‘storage formation’, with increasingly specific descriptors that correspond to the titleholder’s improving level of knowledge about the formation: (a) a ‘potential greenhouse gas storage formation’, (b) an ‘eligible greenhouse gas storage formation’ and (c) an ‘identified greenhouse gas storage formation’, which is an ‘eligible greenhouse gas storage formation’ that is declared by the minister to be an ‘identified greenhouse gas storage formation’. An injection licence authorises the injection and storage of a substance into an ‘identified greenhouse gas storage formation’.

Once injection operations cease permanently in an injection licence area, the licensee must apply for a site-closing certificate. This triggers the commencement of the site-closing period, during which the injection licensee will be required to carry out a work program corresponding to a petroleum decommissioning process, but potentially with additional requirements. The application must be accompanied by a written report setting out the licensee’s modelling of the behaviour of the GHG and relevant information and analysis; the licensee’s assessment of the expected migration pathways and short- and long-term consequences of the migration; and the licensee’s suggestions for post site-closing monitoring and verification.

These processes may take months or years. As is the case with petroleum decommissioning, the injection licensee will be required to plug wells, repair damage to the seabed and remove or otherwise deal with property and equipment. The minister may refuse to give a certificate if the substance is not behaving as predicted or there is a significant risk of a significant adverse impact on other potential resources.

Mr Deputy Speaker Sidebottom, I support this acknowledgement and thank all of the people involved in putting this report together, including your considerable learned contribution. (Time expired)

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