James Bidgood (Dawson, Australian Labor Party) Share this | Hansard source

I rise to speak in full support of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and cognate bills. This bill will establish a new range of offshore titles providing for the transportation by pipeline and injection and storage in geological formations of CO2 and, potentially, other greenhouse gases. The Offshore Petroleum Act 2006—otherwise known as OPA—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 states and the Northern Territory—three nautical miles of coastal waters—and the outer limit of the Australian continental shelf. Under the proposed greenhouse gas legislative model, the Australian government will be primarily responsible for administering the regulation in Commonwealth waters, rather than the current joint authority of state, Northern Territory and Commonwealth government arrangements applying to the petroleum industry.

The responsible Commonwealth minister, known as RCM, will have ultimate regulatory responsibility. This approach is consistent with the industry’s preference for a consistent and harmonised national approach and will improve the efficiency of project approvals and minimise administrative duplication. The government referred this bill to the House of Representatives Standing Committee on Primary Industries and Resources, of which I am a member, for inquiry and report on 19 May 2008. The committee’s bipartisan report, Downunder: greenhouse gas storage, was tabled on 1 September and strongly endorsed the government’s CCS framework.

With 80 per cent of Australia’s electricity generated from coal, no serious response to climate change can ignore the need to clean up coal. The establishment of a carbon capture and geological storage framework represents a major step towards making low-emissions coal a reality. CCS is essential for the long-term sustainability of coal-fired electricity generation and to realise the potential of new industries such as coal-to-liquids, which could improve Australia’s liquid transportation fuel security.

The coal industry is highly significant not only to my electorate of Dawson and Australia’s economic prosperity but also to the world’s current and forecast energy supply. Coal currently provides almost 80 per cent of Australia’s electricity generation capacity, and also some 40 per cent of world electricity needs. While coal’s share of future power generation in Australia will decline in favour of renewable energy and less greenhouse intensive fossil fuels, such as gas, coal will continue to provide much of Australia’s electricity generation requirements well into the future. This view is supported by the International Energy Agency. This monitors and forecasts global energy supply and demand. The IEA estimates that the world’s future energy needs will be met primarily by fossil fuels, forecasting that coal will provide around 44 per cent of world electricity needs in 2030—an increase on its current share. It is therefore vitally important that domestic and international greenhouse gas abatement solutions include policies that support the development and deployment of low-emissions coal technologies. Against this reality, it would be irresponsible for the Australian government to close down Australia’s coal industry and forsake the economic opportunity that the global demand for coal represents for all Australians.

Coal is Australia’s largest export commodity, generating some $24 billion in export income in the years 2005 and 2006. This is to the nation’s economic bottom line. According to the Queensland Resource Council, it generated some $18 billion in income in 2007 for the Queensland economy alone. Just this morning, we were honoured with the presence of the Prime Minister talking to this bill. He informed the House of the latest figures, which say that our exports will be worth $43 billion in the year 2008-09. Australia truly is the world’s largest exporter of coal. The coal industry is also the lifeblood of many of our rural and regional communities, and this is especially the case in my seat of Dawson. The industry employs some 30,000 people and one in four of those jobs are in the Bowen Basin. Low-cost coal supports Australia’s high living standards and is the foundation for Australia’s energy intensive industries. The success of CCS technology will guarantee the long-term future of the coal power industry and the job security for power industry workers.

If Australia were to stop exporting coal, countries like China and India would simply find other suppliers to meet their demand. Therefore, any response to climate change pressures must also take into account the need to maintain adequate and reliable energy supplies by making fossil fuel use cleaner. The government recognises that new clean energy technologies, including both fossil fuels and renewable energy sources, are the key to a sustainable climate change solution. The Rudd government is providing leadership and policies that reduce or eliminate greenhouse gas emissions, while at the same time ensuring that we continue to prosper from our abundant energy resources. In this context, and as a fossil fuel dependent economy, the Australian government has a pivotal role to play in driving technology outcomes that reduce or eliminate greenhouse gas emissions. A key part of this effort is the need to establish a framework to allow for the capture and geological storage of greenhouse gases emitted from fossil fuel use, both domestically and in countries which purchase Australian coal.

The centrepiece of the government’s climate change policy is its commitment to establish the Carbon Pollution Reduction Scheme, known as CPRS, in 2010. The scheme will establish a forward price for carbon within the Australian economy. Placing a cost on carbon will encourage industry to develop and deploy low-emission technologies over time. In addition, the government has established the $500 million National Low Emissions Coal Fund to support the National Low Emissions Coal Initiative and deliver breakthroughs in clean coal technologies, of which CCS is a key part. The NLECI is being matched by the coal industry’s COAL21 initiative. The industry has set up a $1 billion fund to support clean coal projects, to combat climate change and to reduce our emissions. This initiative will showcase practical ways to reduce emissions from coal use to our key major trading partners, such as China.

The government’s legislation will establish access and property rights for the safe and secure injection and storage of greenhouse gases into stable subsurface geological reservoirs in Commonwealth waters more than three nautical miles offshore. The legislation aims to provide project developers with the certainty required to commit to major low-emission energy projects involving CCS. It also allows for the establishment of an effective regulatory framework to ensure that projects meet health, safety and environmental requirements. The legislation will create an environment in which industry can invest in CCS projects with confidence and will encourage the commercialisation of technologies which have the potential to play a vital role in reducing global greenhouse gas emissions in the future. The legislation provides for appropriate consultation and multiple use rights with other marine users, including the fishing and petroleum industries, and ensures pre-existing property and use rights are properly preserved.

The government’s framework comprises four bills which were introduced into the House on 18 June 2008: the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, which is the principal bill to establish the Commonwealth’s CCS framework; the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008; the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008; and the Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008. The bills 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 legislation deals primarily with the provision of access and property rights for greenhouse gas injection and storage activities in Commonwealth offshore waters and provides a management system for ensuring that storage is safe and secure while balancing the rights of this new industry with the petroleum industry in a manner that encourages investment in both industries. The proposed legislation recognises the need to (a) provide greenhouse gas injection and storage proponents with the certainty needed to bring forward investment, (b) preserve pre-existing rights of the petroleum industry as far as is practicable to minimise sovereign risk to existing titleholders’ investment in Australia’s offshore resources and (c) provide assurance to the community that CO2 is stored in a safe and secure manner.

In his second reading speech introducing the legislation, the Minister for Resources and Energy, Minister Martin Ferguson, noted the need for urgent action in addressing climate change and the significant role that these amendments may play in developing one of the available methods for reducing greenhouse gas emissions. The minister also noted that several large-scale projects have been considering their requirements for geological storage for some years. The proponents are eager to gain access to areas so that they can commence detailed assessment of storage formations. In conclusion, Minister Martin Ferguson, who has visited my electorate on two occasions and has seen firsthand the service industries that have developed to support the coal industry, noted that this bill provides proponents with access to potential storage formations and ‘will play a key role’ in accelerating the development of the carbon capture and storage industry. In doing so, this bill provides a significant opportunity to tackle climate change in a way which protects jobs in Dawson and maintains our economic prosperity. Indeed, it will add to the nation’s bottom line in this economy. We have the potential in this House today to be world leaders, not followers. We have the potential to show to the world the way of new technologies and new research, and we should go forward with confidence, not with denial. Because of this, and the leadership of the Rudd Labor government in carbon capture and storage, I commend the bill to the House.

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