Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Hansard source

in reply—I welcome the opportunity to make some concluding remarks in this complex debate that is very much central to our future economic opportunities as a nation. In that context, I express my appreciation to the members for Groom, O’Connor, Forrest, Pearce, Maribyrnong, Page, Corangamite and Werriwa for their contributions. I want to respond to a few issues raised by the other side of the House.

I firstly go to the comments by the former resources minister, the member for Groom, opposing the removal of registration fees. I simply note that the Commonwealth first proposed the removal of such registration fees in 2002—when, I might say, the current shadow minister and Leader of the Opposition in the Senate was a key member of the government. Perhaps he should reread a little bit of recent history in terms of the previous government’s attitude to one of the key issues before the House today.

I also acknowledge the member for Groom’s comments regarding consultation. I simply say that the need for further consultation is understood by me, as the minister, because we are talking about the future regulation of one of Australia’s key future economic opportunities. For example, we currently export about $10 billion of LNG per year. By 2015-16 that could easily grow to $50 billion per year.

For those reasons, I will not be seeking to take further action on these bills until after the Senate Economics Legislation Committee has completed its inquiry into the legislation and until I have had an opportunity for further discussions with the Ministerial Council on Minerals and Petroleum Resources, which are scheduled for the end of May of this year. The reason I say that is because, in finalising the government’s view on the potential need for a national regulator, I also want to consider the context of the Montara commission report. I say that because in the last 18 months I think we have been very fortunate as a nation. We have actually had two major incidents in the petroleum industry—the Varanus incident and the recent Montara accident. I think we should properly inform ourselves of the potential ramifications and potential changes in regulatory regime required as a result of those accidents. For those reasons, I will proceed with caution, because I actually want to get it right. I also believe that is the desire of the former minister, the member for Groom, who is at the table, and of the current shadow minister, Senator Minchin, who is also a former minister.

Also during that period I will have further consultation with the relevant stakeholders not only at an industry peak council level through the Australian petroleum association but also with individual companies. I have indicated this to a meeting of members of the council of APPEA this morning. I also go to the comments by the members for O’Connor, Forrest and you, Madam Deputy Speaker Moylan. I simply observe for the information of the House that the fees we are talking about are fees generated by the transfer of property not in Western Australia but in Commonwealth waters and are therefore fees properly characterised as Commonwealth revenues. I think the Commonwealth is entitled to have regard for the proper use of its revenue for the purposes of the regulation of this industry. It is therefore important to note that the Commonwealth proposal with respect to the national offshore petroleum regulator contemplates all revenue raised under the offshore petroleum and greenhouse gas storage legislation being applied to the regulation of this industry with none going into general revenue—which I do not think is necessarily the current case with respect to the activities of state and territory governments. I simply advise the House that this is also what the industry expects: if revenue is collected it is actually used for the regulation of its industry, not for other purposes by state and territory governments.

I also refer to your comments, Madam Deputy Speaker Moylan, that the case for NOPSA has not been made out. I simply reiterate that if you have got any doubts about the proper consideration of these matters, you should pay close attention to the Varanus report—when it is finally released by the Western Australian minister for minerals and petroleum, as it is currently in his hands and we await its release in the Western Australia parliament—and the recent Montara incident. The public hearings by Commissioner Borthwick have now commenced and we will be paying close regard to those proceedings and the eventual report presented to the government by Commissioner Borthwick. In my opinion, the status quo is no longer an option.

These bills also appropriately amend the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003. Importantly, they put in place a mechanism to fund the establishment of a new regime for regulating Australia’s offshore petroleum industry. For those reasons the government is acting on the independent recommendations of the Productivity Commission review of regulatory burden on the upstream petroleum—oil and gas—sector. Whilst there is to be a reference to the Senate economics committee, I think the committee should apprise itself of the existing body of work prepared by the Productivity Commission following a detailed process of public consultation and proper consideration of appropriate recommendations aimed at removing the regulatory burden on this key industry. Reducing the cost of regulatory activities and duplication is one of the desired objectives of not only the Productivity Commission but also the industry and the Commonwealth government and, I might say, most state and territory governments. Such a mechanism needs to be put in place, in my opinion, as soon as is practicable. There will therefore be, in establishing such a regulatory organisation, substantial start-up costs, but these new regulatory regimes must come into operation sooner rather than later.

As I indicated in my second reading speech, I do not expect to introduce legislation establishing a national offshore petroleum regulator until next year, as discussions regarding the exact arrangements are ongoing with the Ministerial Council on Mineral and Petroleum Resources. The ministerial council’s consideration of these matters cannot properly be finalised until ministers have had the opportunity to consider any relevant recommendations of the Montara Commission of Inquiry, which is due to report by the end of April. There is an opportunity now for discussions and consultations in the lead-up to that report, but in my opinion the report will very much finalise the government’s consideration of the need for this regulatory change.

For reasons consistent with this approach, the government will not press for the Senate to give consideration to this legislation until after the Ministerial Council on Mineral and Petroleum Resources has had the opportunity to further consider the Montara commission report at a meeting scheduled for the end of May. That is a commitment I have given to the ministerial council, which I detail publicly in accordance with the undertakings I have given them—volunteered by me as the Commonwealth minister.

I go to other small but important amendments, including: the strengthening of the National Offshore Petroleum Safety Authority’s functions and powers to more effectively enforce the safety regime; the streamlining and clarification of provisions in relation to multiple titleholders to benefit regulators and titleholders alike; improvements to enforcement and compliance aspects of the regulatory regime; and the clarification of titleholders’ occupational health and safety duties in relation to wells. While there is a difference between the government and opposition at the moment on some aspects of the bill, I understand that there is largely a strong sense of agreement between both sides of the House with respect to these matters.

In essence, these bills underscore the government’s commitment to the maintenance and continual improvement of a strong, effective framework for the regulation of offshore petroleum and greenhouse gas activities. I commend the bills to the House, but in doing so I reiterate the undertakings that I have given to the opposition, industry and state and territory ministers with respect to how I will proceed to finalise the government’s consideration of these complex matters.

Question put.

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