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

I express my appreciation to the House for the constructive manner in which 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 2009 have been debated. In doing so I extend my particular appreciation for their participation in the debate to the members for Groom, Paterson, Capricornia, Corangamite and Lyons. These bills amend the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Offshore Petroleum and Greenhouse Gas (Safety Levies) Act 2003. I will clarify some issues about the levies at the outset because they were mistakenly misrepresented by one of the contributors to the debate. The only measures going to levies are the transitional arrangements for the phasing-out of the pipeline and safety management plan levy. There is no proposal to introduce new fees as a result of the House’s consideration of these bills.

There are a number of amendments in the bill that, while comprising only a small part of the legislation as a whole, are nevertheless important. They include the strengthening of the functions and powers of the National Offshore Petroleum Safety Authority 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. In essence, these bills underscore the government’s commitment to the maintenance and continuing improvement of a strong, effective framework for the regulation of offshore petroleum and greenhouse gas activities.

During the debate a number of related issues were raised by members, and I seek to respond to a couple of those. The issue of the Montara commission of inquiry, which was conducted by Mr David Borthwick, was raised by most contributors to the debate. I confirm to the House that I received the commission of inquiry’s report on 18 June this year. As I have said publicly on a number of occasions, I remain committed to releasing the report once the Australian government has given proper consideration to its findings and recommendations. Further, I say again that I intend doing that prior to Christmas this year. The House should not forget that the report contains 105 recommendations and 100 findings with wide-ranging implications for government regulators and the offshore petroleum industry. The goal—and I think this is also the goal of all members who participated in this debate—is to ensure that Australia’s oil and gas exploration and production operations are the best and safest in the world. I believe that applying the lessons learnt from an instance of the loss of well control here in Australia at the Montara wellhead platform and another incident in the Gulf of Mexico are vital to achieving that goal.

With that goal in mind, the Australian government is paying heed not only to the Montara report but also to the lessons to be learned from proper consultations with the US administration and BP and other petroleum companies on the incident in the Gulf of Mexico. We as a government, in finalising our response to the Montara report, will continue to monitor closely developments in the US and share information from our experiences with our American counterparts. The government remains very firmly committed to establishing a regulator for offshore petroleum activities in order to provide the community, the government and industry with assurances that all petroleum activities meet world-class standards.

I again indicate that our consultations to date have seen support for the establishment of a national regulator from industry and from all state and territory governments other than that of Western Australia. I am committed, in the finalisation of this legislation, to further consultations with the opposition and to my ministerial counterpart in Western Australia. I think this is important, because in bringing forward our proposed model for the national offshore petroleum regulator we will seek to ensure that we take industry with us and because we remain committed to the establishment of a national regulator by 1 January 2012 to ensure that the petroleum industry meets world-class standards on safety and environmental matters. More than ever, this is in line with the expectations of the Australian community, and it has full industry support.

I turn now to the issue raised by the member for Paterson: the operation of Advent Energy and some potential drilling 55 kilometres east of Newcastle. I remind the House that the discovery of new petroleum reserves has the potential to reduce Australia’s energy import dependence and increase supply certainty. This, to be fair, was acknowledged by the member for Paterson as an objective of the government.

For those reasons, Australia’s offshore petroleum regulatory regime places the onus on the operator to demonstrate that all exploration for and extraction of petroleum resources is undertaken in a safe and environmentally responsible way. That said, all petroleum activities in Australian waters are subject to the stringent environmental standards and reporting requirements set out in the legislation and associated regulations. These clearly include the bills before the House this evening, the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Environmental Protection and Biodiversity Conservation Act 1999. In accordance with these legislative requirements, companies undertaking petroleum exploration and development drilling in Australian waters are required by law to have an approved environmental plan containing an oil spill contingency plan. Some suggest that we should have a moratorium on exploration and development in Australia. I simply say that to adopt that short-sighted approach would undermine Australia’s energy security, and no-one in this debate has suggested that this evening or in the lead-up to the debate.

That in turn takes me to the issue of Advent Energy Ltd. For the information of the House, the permit was granted on 24 June 1999 by the then Howard government. It is held by Bounty Oil and Gas with a 75 per cent stake and Advent Energy Ltd with a 25 per cent stake as the operator through its wholly owned subsidiary Asset EnergyPty Ltd. In July 2010 Asset announced an estimated resource of 13.2 trillion cubic feet. This effectively means prospective gas across the offshore Sydney basin, noting further assessment will be required through well analysis. On 27 August 2010 Bounty advised the Australian Stock Exchange that the exploration well site 55 kilometres east of Newcastle had been finalised. The company has appropriately contracted the Ocean Patriot semi-sub rig obtained from an assignment contract with Apache to drill the well to a depth of 826 metres in water approximately 140 metres deep. The well will test both the Great White and Marlin prospects, which are now considered to comprise the major undiscovered prospective gas reserves across those two prospects.

In line with the requirements of the Offshore Petroleum and Greenhouse Gas Storage Act, the approval of petroleum operations is the responsibility of the designated authority, which also includes the New South Wales department of mineral and forest resources. The well operation management plan for this operation has been lodged with the designated authority for assessment. I remind the House also that the environmental plan includes an oil spill contingency plan, which has also been lodged with the designated authority. My department advises that the New South Wales minister, through his department, is currently holding community consultations on the drilling which has included distribution of the environmental plan to several regional councils.

See this speech in context