Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Hansard source

I welcome the opportunity to speak on the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment (Miscellaneous Measures) Bill 2010 and on the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2010, which cover an industry which is of huge significance not only to the Australian economy, not only for Australian jobs but also for Australian energy security. I have a feeling of deja vu in addressing this matter because it is not the first time this legislation has been before the House. Indeed, I have had the chance to speak on this legislation on several occasions. I am pleased that the government has taken measures to correct a flaw which existed in its original legislation.

The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment (Miscellaneous Measures) Bill 2010 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2010 amend the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to implement policy and technical amendments. The act was last amended in 2009. The Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2010 amends the 2003 act to provide transitional arrangements in relation to the phasing out of the pipeline safety management plan levy. The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment (Miscellaneous Measures) Bill 2010 amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006. This is a relatively small bill, making a number of minor policy and technical amendments.

In 2008, the coalition supported the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, which amended the Offshore Petroleum Act 2006 to establish a system of offshore titles to authorise transportation, injection and storage of greenhouse gas substances, principally carbon dioxide, into deep geological formations under the seabed. Of course there has been a great deal of talk and not much action in relation to geosequestration from those on the other side, although I did note with interest the announcement of the minister last week where a significant amount of money was awarded to various projects in relation to carbon capture and storage. Interestingly, though, most of that money went overseas. It is of some interest to me that the Carbon Capture and Storage Institute, established with such great fanfare by the previous Prime Minister, has really received no international support of any great matter. In fact, only one country out of the many said to be involved in that institute has actually put any money up. At last count, the Americans, who offered $500,000, did so a few days before they received $6½ million dollars for a project in Texas in the United States.

Serious questions are now being asked about the economic viability of carbon capture and storage. The missing link in all of this, apart from the government’s continued talk and little action, is that the coal industry is going to have to put real dollars on the table. They will not be surprised by that message. Perhaps they will not be happy with it but they should not be surprised by it as it is a comment I have made to them repeatedly in recent times. If carbon capture and storage is to be economically viable, the coal industry is going to have to invest substantial sums of money in it. I am not talking about hundreds of millions of dollars; I am talking about several billions of dollars. Without that support and without commitment from other countries, the concept being championed by the Minister for Resources and Energy in the Gillard government will simply go nowhere, along with the myriad other policies they have announced during their time in government.

In 2009, the coalition considered and supported the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009. These bills made minor technical amendments to the act.The main bill also gave the minister power to appoint a commission to undertake an inquiry into factors specific or incidental to a significant offshore petroleum or greenhouse gas storage incident. Unfortunately, I have to say that that was an important step supported by the coalition because of what was then the first incidence of an offshore leak—the Montara well off north-western Western Australia—in some 25 years of exploration and drilling off the coast of Australia.

Montara was an incident which the government and the opposition took very seriously at the time, but little did we know, when that incident occurred, that it was soon to be followed by a huge incident in the Gulf of Mexico. In both cases oil and hydrocarbons escaped uncontrolled from underwater wells. Fortunately in the case of Montara in Western Australia the environmental damage was nowhere near as significant as it was in the Gulf of Mexico. Either way, though, escapes of this type cannot go without significant investigation. Both the opposition and, I am sure, the government will take a very close interest in the findings that come from the inquiries into the Montara and Gulf of Mexico cases.

This amendment to the bill allowed the initiation of the Montara Commission of Inquiry into that uncontrolled release of oil and gas from the Montara wellhead platform in the Timor Sea. It is important that that process be pursued to its completion and that this be done without interference and without politics. The minister has recently stated that the report of this commission of inquiry will be released before Christmas this year and the coalition supports the minister’s delay in releasing that report. It is important that we do not lose any opportunity to follow through lines of inquiry—either ours or the commission’s—and that we do not prejudice in any way any potential action, particularly legal action, by prematurely releasing this report.

But we do urge the minister, now that parliament has resumed in full, to release this report as soon as possible. It is important for everyone involved. It is important for the companies who have a financial interest in this that this matter is resolved. It is important that we complete our lines of inquiry so that we are able to fully explain to the best of everyone’s ability why this incident occurred in Montara, because it is crucial that such incidents do not recur in Australia’s offshore petroleum industry. The potential environmental impact is an issue which has been well canvassed in the media, but the Australian community needs to have confidence that offshore oil and gas exploration can be done in complete safety. So I look forward to the release of that report and, as has been the case to date, we have taken a bipartisan approach with the government to ensure that everything that should be done is done.

The safety levies amendment of 2009 commenced the phase-out of the pipeline safety management plan levy by putting in place a safety case levy covering pipelines. This was to facilitate pipelines being covered under the safety regulations in future, rather than under pipeline regulations. The safety case levy is imposed to recover the National Offshore Petroleum Safety Authority’s—NOPSA’s—costs associated with monitoring safety compliance. NOPSA plays an extraordinarily important role in making sure that there is compliance with the safety rules.

It was intended that the state and Northern Territory regulations would be amended to correspond with the Commonwealth regulations. I am sure it comes as no surprise to the House that this has not occurred. As a result, some safety levy payments due to NOPSA may not be collectable until corresponding amendments are in place. The current safety levy bill therefore seeks to address these issues with transitional measures. I am particularly pleased to see that the government has been prepared to address this problem in its previous legislation.

However, in its previous format the coalition had significant concerns about the bill. My colleagues in Western Australia in particular were very concerned with some aspects of the bill. It seems only reasonable that, with two-thirds of Australia’s offshore oil and gas resources and with about 80 per cent of offshore titles being based in Western Australia, this parliament and this government should take a reasonable interest in the concerns of both the state and federal representatives of that state. We also had significant concerns about the fact that there had not been adequate consultation, particularly with the Western Australian government. There were also concerns that the federal government would be moving, through this bill, to hold the fees for the establishment of a national offshore petroleum regulator, given that at least one state government—as I say, the Western Australian government—has concerns about this proposal and that those concerns are yet to be resolved. In fact there will need to be continuing discussions with both the Western Australian Minister for Mines and Petroleum, Norman Moore, and with the opposition if we are to make progress on that regulator.

We do support in principle the establishment of a national offshore petroleum regulator, but it must be a national, not a federal, regulator—that is, it must have representatives from those states which will be involved in the regulation of offshore petroleum along with the Commonwealth government. It needs to be a partnership and a partnership where we all share responsibility and also share the same aim of making sure that the regulator operates in a way which will produce the optimum outcome. We need to ensure that all states agree with the establishment and operation of the national offshore petroleum regulator.

That is achievable but, along with its inability to deliver, where this government continually fails is in the area of consultation. We have seen a classic example of that recently with the discussion paper—I think it was perhaps a ‘guide to a discussion paper’; it seems to be of less importance everyday—on water management. The Gillard government has the same bad trait that the Rudd government had and that is that it fails to consult. We need to have consultation in the case of the national offshore petroleum regulator. It is an issue that needs to be finalised, but it will not be finalised unless this government consults with all concerned, particularly, as I say, with the Western Australian government.

The Western Australian government has been quite open in expressing its concerns also about the Productivity Commission’s recommendations and the implementation of those recommendations. Since Western Australia’s budget is going to be hit by this measure, identified in this bill as savings to the Commonwealth, it makes sense that its concerns are fully addressed before the passage of this piece of legislation. The coalition, as has always been the case in opposition, is prepared to sit down with the minister and discuss the issues constructively. As the minister knows, my door is always open and we will work to ensure a positive outcome.

Unfortunately, there is much work to be done if the government is to meet its responsibilities in the oil and gas sector. It is particularly frustrating that the government has again delayed the release of its energy white paper which obviously impacts on the oil and gas industry and a whole range of energy resources, not the least of which is electricity. While this legislation today is important to the oil and gas industry, it does, however, highlight the piecemeal approach to energy policy in Australia. The most recent delaying tactic occurred earlier this month when the government fobbed off again the release of the energy white paper with another excuse, this time attempting to pass off an energy efficiency report as a temporary stand-in for the energy white paper. The report is not an energy white paper and does not fill the void created by three years of inaction in this area by the Rudd, now Gillard, government.

Households and businesses across Australia are focused on the rapidly escalating price of electricity, and the federal government has comprehensively failed to provide leadership for the energy sector right across the board—electricity, oil, gas and coal—by dodging its responsibilities to provide the energy policy framework that would be contained in an energy white paper. There have been myriad excuses. Firstly, there were the problems with the ETS, and now the Gillard government is trying to inflict more delays on the sector while its climate change panel deliberates for another year about a potential carbon tax.

The last energy white paper was delivered by the Howard government—in fact delivered by me as the Minister for Industry, Tourism and Resources—in 2004. In keeping with the regular five-year cycle, an updated version is well and truly overdue. There have been enough excuses, enough delays and enough drip-feeds. It is time for the Gillard government to release a comprehensive energy white paper that will address the full range of issues affecting the energy sector.

While I do welcome the changes to the legislation before the House today, and the opposition will support the bills, the government must accept and address that its day of reckoning on energy matters is fast approaching. Every day it leaves the energy and resources sector without a clear framework is another day that investment decisions must be made in a policy vacuum and another day in which no solution is offered to limit the rapidly increasing electricity price rises being felt across Australia.

The energy area is one of the most significant areas not only because of the price that the community pays for electricity but also because it is the basis of our economic development. There are a number of members of this House who are watching development in the onshore petroleum industry, particularly the coal seam industry, with great expectation. There are a number of members who have manufacturing industries in their electorates, all of whom are sitting and waiting for some definitive policies in relation to energy from this government.

While we as an opposition provide our constructive support where we can, and we do on these bills, we need to see some action from the Gillard government if this country is to have the confidence to make the investments that will see not only the exploration of oil and gas continue but also the development of onshore industries and, most importantly, the continued development of baseload clean electricity generation in Australia.

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