Graham Perrett (Moreton, Australian Labor Party) Share this | Hansard source

I rise to speak to the committee report Down under: greenhouse gas storage—review of the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill. The Minister for Resources and Energy referred this inquiry to the committee in May because it is groundbreaking legislation—no pun intended—and it is very important that we get it right. This recommendation does not happen very often, I am informed. Even though as a new member of parliament I have limited experience of committees, I understand this sort of referral does not happen very often, especially to a committee that was comprised of Labor, Liberal, National and Independent members. It shows how significant this project was for Minister Ferguson.

This legislation will enable carbon dioxide to be stored safely and securely in geological storage deep under the seabed in areas controlled by the Commonwealth. It would also be a guide, wherever possible, for the state legislatures considering the same problem. As a member of the Standing Committee on Primary Industries and Resources I was very pleased to have been part of this inquiry and appreciated the opportunity to delve into an industry that could be a part of the solution to reducing Australia’s greenhouse gas emissions.

As the Rudd government faces up to the harsh realities of climate change and the catastrophic impact that human-made CO2 emissions are having on our environment, we are exploring ways to reduce carbon emissions and also to remediate existing emissions through carbon capture and storage. Geosequestration, a word that rolls more and more easily off the tongue, is basically permanently storing captured CO2 under the seabed. This is a solution that complements the existing offshore petroleum industry.

New industries are driven by innovators, developers, entrepreneurs and consumers. Unfortunately, it is usually the case that governments play catch-up when it comes to regulating emerging industries and balancing the rights of existing industries. A good example of this is the internet. By 1997 there were three million internet users in Australia but, unfortunately, there was no Commonwealth legislation concerning matters such as copyright or privacy for this new media. Imagine three million road users who did not have any road rules. As the number of internet users grew and the technologies developed through the late 1990s, the internet became a breeding ground for music and video piracy. By the year 2000 nearly four million households had internet access, but it took ages for the government to introduce legislation to regulate what happens on the internet.

However, when it comes to offshore greenhouse gas storage, the Rudd government is getting on the front foot early. In fact, Australia is one of the first countries in the world to establish a framework that will support such geosequestration. To use an old mining analogy, the Rudd government is the canary in the mine shaft. This inquiry included a broad consultation process and received 32 submissions from governments around Australia, from industry stakeholders of various sizes, from environmental groups and even from individuals. These groups represented a range of interests, including petroleum titleholders and greenhouse gas storage proponents. In my view, it was a very interesting manifestation of a truly consultative government prepared to receive a broad range of views. The committee’s inquiry learned that one of the most significant challenges for this legislation was to effectively balance the rights and interactions between greenhouse gas storage and pre-existing petroleum titleholders.

The value of oil and gas produced in Australia in 2007-08 is estimated to be in excess of $27 billion, with exports valued at around $16 billion. Total production of crude oil in 2006-07 was 28,844 million litres, or 504,000 barrels per day, while total production of natural gas was 39.4 billion cubic metres. The industry in Australia consists of more than 200 small, medium and large companies and employs about 15,000 people, so it is a very significant industry. This financial year the industry will pay about $3.6 billion in resource taxation to the Australian government. I am sure Mr Swan would agree that it is a very, very significant industry. With more undiscovered petroleum reserves offshore, the industry has a bright future in Australia—which is why the inquiry concluded that minor improvements could be made to the bill to strike an appropriate balance between the two industries, between the petroleum and gas industry and geosequestration.

The inquiry’s most significant recommendation was that the minister be given power to direct parties to negotiate in good faith where there are potential or actual overlapping greenhouse gas storage and petroleum titles. This agreement process is modelled on legislation in Queensland, the Mineral Resources Act, which has been used to successfully mediate between the interests of coal and coal seam gas industries in Queensland. This agreement process was put forward by Anglo Coal and the joint submission of the Australian Coal Association and the Minerals Council of Australia. The ACA and MCA submission stated:

The key features of the Queensland CSG—

coal seam gas—

regime are that parties with competing natural resource interests are required, firstly, to exchange relevant information and, secondly, consult or negotiate with each other with a view to achieving the best resource management outcome, including safety management arrangements.

Before being elected to parliament, I was a policy adviser to the Queensland Resources Council and, before that, I worked as a mines and native title adviser to the Queensland government, so I have seen the Queensland Mineral Resources Act in action. I have seen how the parties, when confronted with a minister making a decision, can, surprisingly, come together and reach an agreement where they are happy—or less unhappy, perhaps.

The ACA/MCA also recommended that the minister be granted circuit-breaker power in the event that parties cannot reach an agreement. So we will have the Minister for Resources and Energy, Mr Ferguson, being like Solomon, I guess—making a decision with the public interest test in mind.

Greenhouse gas storage is an expensive endeavour and obviously will be much more viable in a carbon tax environment. With this in mind the committee made a number of recommendations to help stimulate investment. These included the recommendation that existing petroleum operators be offered a one-off opportunity to incorporate a greenhouse gas assessment permit over their exploration or production licence. Petroleum operators are best placed to develop storage sites, in terms of their knowledge and expertise. The committee also recommended that investors who can demonstrate a readily available CO2 stream for geosequestration be given preferential consideration. Obviously, they have the inside running if they have the greenhouse gas ready to go. The committee also recommended financial incentives for the earliest movers in this new industry. These are very common-sense approaches.

The committee is confident that the legislation introduced by the Minister for Resources and Energy will provide a solid base on which to cultivate this very important new industry. It will also serve as an example to the rest of the world on how we can reduce our greenhouse gas emissions.

This week we have heard a lot of comment from those opposite about greenhouse gas, about climate change. I am embarrassed to say this, but I was in the Senate last night and I heard a new Liberal senator talking about climate change. It is a line that I seem to have heard over and over from those opposite: we produce less than two per cent of the world’s CO2 emissions and it is not that much. But this is a fundamental error in thinking. We must be a bit more visionary. We must make more of a commitment to the collective future of the planet, rather than just holding on to that tenet of Liberal Party beliefs of looking after the individual. This is not the time for individual beliefs; this is the time to realise that we are part of a planet, and there will be significant consequences if we do not.

I commend the chair of the committee, Dick Adams, the member for Lyons; the deputy chair, Alby Schultz; and the rest of the committee, some of whom are here today, for their great work on this. I commend the report to the House.

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