Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture and Resources) Share this | Hansard source

I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to implement a plan for a large-scale carbon capture and storage plan to help Australia meet its international emissions targets while further growing Australia's resources sector".

We welcome the updating of the offshore petroleum acts. Anything that makes it easier and safer to remove carbon dioxide from the supply chain and store it is welcomed by members on this side of the House. We also acknowledge that NOPSEMA is the best agency to manage and monitor offshore carbon storage in this country. These bills strengthen the monitoring, inspection and enforcement aspects of the agency, and that's a good thing, because NOPSEMA deals with both environmental management and workplace safety in an industry that can be risky both for workers and for our natural environment. However, these bills raise obvious questions. Where is the broader carbon capture and storage industry? How far along is it on its journey? We have here a series of amendments to better manage offshore carbon storage, but where is the storage? Where is that broader plan?

We are, of course, a resource-rich country and consequently we currently have a power system that relies on fossil fuels for around 86 per cent of utility-grade electricity generation. Burning these fuels generates greenhouse gases, which contribute to global warming. I won't take the time to revisit the science on this occasion; I think members know it well—although there are many, even though they might know it well, who continue to deny the conclusions.

The Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Bill 2019 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2019, as responsible as they are, remind us that the government is doing little to incentivise the storage of our carbon emissions. These bills, for example, do nothing to address the fact that this government, for six years now, has turned its back not only on a serious climate policy but also on a workable, investable, bankable carbon framework. The Prime Minister and his energy minister can't hide from their own data. Carbon emissions in Australia continue to rise year on year. According to the Department of the Environment and Energy's latest accounting, in the year to March 2019 Australia's carbon emissions rose 0.6 per cent, which is no surprise given the government's only plan is to waste an additional $2 billion on Tony Abbott's failed climate policy, on top of the $2.55 billion already allocated.

The first Emissions Reduction Fund auction conducted by the government since the May election has delivered abatement of only 0.6 per cent. The government claim abatement will be delivered through their so-called Climate Solutions Fund but, based on these results, it will take their policy some 833 years to deliver the abatement results they've been promising for 2030. Carbon emissions have been continuously rising since 2014 after coming down by more than 10 per cent during the period of the last Labor government.

It's worth reminding the House that the architecture put in place by the former Labor government, all that time ago, was torn up by this government early in its first term, following the 2013 election. Think about that, Mr Deputy Speaker: if we had that architecture in place still, some leaders who don't lead their parties anymore might still be leading their parties; Australia would now be well into a settled architecture that would be doing no harm to our economy and would have us better than on track to meet our Paris commitments; none of us would be so often distracted, as we are, by arguments about where energy policy in this country is heading; and we wouldn't be having as many fights about energy prices for consumers and for business, because that policy would be settled and we'd be concentrating on other things, including the matter we're discussing today—that is, carbon capture and storage.

The government's own projections show that the government will now miss their 2020 Kyoto commitment of a five per cent cut on 2000 levels. Their own projections also show that emissions will keep rising all the way to 2030, missing the government's 2030 emissions reduction target by a full 19 per cent. So where does carbon capture and storage come into this confused policy area? According to the International Energy Agency, carbon capture and storage can remove up to 85 per cent of carbon dioxide emissions from power stations. That, of course, should be of interest to Australia and Australians because we're still so heavily dependent on coal-fired generation; indeed, it makes up about 73 per cent of our production. The IEA's Sustainable Development Scenario says that seven per cent of required global cumulative emissions reductions to 2040 will come from carbon utilisation and storage. This will effectively increase carbon capture and storage from around 30 million tonnes of CO2 captured annually to more than 2.3 billion tonnes per year by 2040.

Some very talented scientists and engineers have remarked that Australia's blend of suitable geology, depleted petroleum fields, coastal petroleum infrastructure and a plentiful supply of carbon dioxide are indeed a marriage made in heaven. We have a surplus of carbon emissions, as evidenced by our own growing emissions inventory, and we have the onshore and offshore areas for carbon injection where it can be sequestered for millions of years. We also have motivated industry players committed to carbon capture and storage. On Western Australia's Barrow Island, Chevron, Shell and ExxonMobil have already started injecting carbon dioxide into the earth in the largest carbon capture and storage project in the world. It will take some four million tonnes of carbon each year out of the Gorgon LNG operation. That project has so far cost US$2.5 billion. It's an expensive exercise.

In the Gippsland Basin, off the Victorian coast, the CarbonNet Project is building to being operational in around two years from now. It will take some five million tonnes of carbon each year from the Latrobe Valley coal-fired power stations and sequester it beneath the seabed. CarbonNet will be the biggest carbon capture and storage project in the world when it begins operation at full scale. The Offshore Petroleum Act amendments that we are considering today have been drafted largely to ensure the CarbonNet Project is both safe and efficient.

The coal industry's COAL21 project should be injecting carbon into the earth's crust in June next year. That project will take 120,000 tonnes of carbon dioxide per year from the Millmerran power station west of Toowoomba and sequester it in the ground, where it will remain permanently.

Yet even those involved in these projects would admit that their efforts are simply drops in the bucket compared to what we could be doing and what, as a country, we need to do. Australia's 2030 greenhouse gas emissions budget is expected to be around 440 million tonnes if we meet the 28 per cent Paris target. The projects I've just outlined will store less than 10 million tonnes. It gives you a sense of the scale of the challenge and the extent to which we are meeting that challenge. It makes Australians ask, obviously, where is the carbon policy? Even if the government can't get beyond its denialism, surely it shouldn't continue to deny this fantastic opportunity we have with respect to carbon storage?

I can tell the House there is an appetite in the resources and energy sectors to do more in the CCS space. People talk to me about it all the time. They have the scientists, they have the engineers, they have the capital, they have the geology and they have the carbon. University teams are working on the solutions, and there are international energy corporations willing to invest in carbon capture and storage projects. The problem is that there is no policy framework from government, no guidance and no reassurance that these projects can stack up on a financial basis. There is no green light, or too few green lights, because the economic guidance is not there for the economic case to be made. The COAL21 and CarbonNet projects essentially prove the technology, and the Gorgon project also shows the conditions are there to do this work.

For an ongoing carbon storage industry, industry need clear economic signals and, right now, they just don't have it. We've no carbon price mandated by the government. The cost of capturing and storing carbon dioxide falls somewhere between $55 and $80 per tonne. In the latest carbon credit auctions in June, the market traded carbon credits at less than $15. That's a gap of at least $40 per tonne.

I know some members will be thinking, 'Do we have to talk about the carbon price again?' Of course we do. It has to be a part of the mix if we are to meet our Paris targets. I have not heard the Prime Minister say we're not still determined to meet our targets; I heard him say we're on track to do it. But of course we are not, and I have just provided the evidence of that, relying on the government's own agencies. We will need a mix of endeavours to meet those Paris targets and we are certainly not on track to do it. We need to start talking more about the elephant in the room. Again, if the former Labor government's architecture was not repealed by this government we wouldn't need to have this argument, but it is an argument we need to have.

The United States seems to take a somewhat different approach. It has tax incentives built in to incentivise carbon capture and storage, mechanisms like 45Q. The American government will give you a tax credit of $35 per tonne if it's used to capture carbon for enhanced oil recovery. They give a $50 per tonne tax credit for storing carbon dioxide. That's an incentive; it's what they call a carrot and it's working for them. Part of the incentive means finding an industrial partner to take the carbon dioxide or even the hydrogen, as the CarbonNet Project will do with Japanese industrial partners who are developing hydrogen as a fuel. A new point is that the fiscal equation is changing. It may be that in the not-too-distant future we won't be storing the carbon, we'll be using the carbon as a product of value—possibly for example, in the hydrogen cycle.

But here in Australia, we are falling behind. Right now, as one industry player has put it, you can get $15 per tonne tax credit for planting a tree that stores carbon for 60 years but you can't get any credit for storing millions of tonnes of carbon for 60 million years. I'm very supportive of the capacity to store carbon in our forests. But there's more we can do; much more we can do. Frankly, the carbon capture and storage projects at Gorgon, Gippsland and Millmerran are the exceptions, not the rule. They show us that it can be done but they also show us that we're not doing enough, and it points to a lack of government policy and guidance.

We need this government to stop investing in energy dismissal, denial and obfuscation simply because the subject always turns to climate. Even if you don't mention the word climate, you need to at least talk the language of industry, which is about greenhouse gas emissions, the carbon budget, our Paris commitments and, increasingly, a carbon price. The government needs to look under its nose. The oil and gas industry, the coal industry, the power industry, the steel industry, universities and some state governments are committing to carbon capture and storage. They acknowledge that an energy system as dependent on fossil fuels as Australia will not turn off the coal and gas plants tomorrow; we simply cannot. We'll continue to generate emissions, which means we need to be more active in the area of carbon capture and storage as we make the long transition to a greater reliance on renewables, which of course will increase year on year as more people put rooftop solar on their houses and business becomes more confident about investing in our energy sector. But they do not have sufficient confidence at the moment, because we still do not have an energy policy in this country.

The coal industry is not in denial. It's investing $550 million in low-emissions abatement, including carbon capture and storage. The industry is doing its bit and wants to do more. Of course, more broadly the Australian community continues to call for real action on climate change—real and meaningful action; not words, not spin and not avoidance of the facts. And we can have real action on climate change without doing harm to our economy. That has been proven by more than one economy around the world. The Climate of the nation 2019 report, released yesterday, highlights that Australians are increasingly concerned about the impacts of climate change. The survey shows that 81 per cent of Australians are concerned that climate change will result in more droughts and more flooding. Eighty per cent of Australians acknowledge we are already experiencing the impacts of climate change. The Investor Group on Climate Change, representing institutional investors, with $1.3 trillion under management, recently said policy uncertainty remains a major barrier to increased investment. Ninety per cent of investors are implementing low-carbon strategies. Over 80 per cent of investors are actively considering reporting under the Task Force on Climate-related Financial Disclosures. Yet in Australia the private sector has to take action in a policy vacuum. Given this situation, I applaud those who are doing something in the less than ideal circumstances of a lack of government guidance.

Even the Reserve Bank of Australia has been vocal about the need for the federal government to show leadership on climate change. In March, the deputy governor devoted an entire speech to the financial risk posed by climate change. After six years in government, the Liberals and the Nats have failed to deliver a credible and effective climate change policy. They have consistently undermined the transition to a cleaner energy system. They have avoided implementing any credible policies to cut pollution in the industrial, energy, transport and agriculture sectors. They have repeatedly dismissed domestic and international concerns about their lack of credible climate policies. The coalition government has defunded and abolished agencies which could develop or advise on policies, such as the Climate Change Authority, the Australian Renewable Energy Agency and the Climate Commission. The government has no climate change adaptation policy, even as it becomes increasingly apparent that Australian communities and businesses are feeling the impacts of climate change. We see that with respect to the terrible bushfires playing out in northern New South Wales and in Queensland.

I was in Stanthorpe not that long ago. I saw near-empty and empty dams. I saw orchards which had had their apple trees removed. I talked to vegetable growers who aren't planting this season, because there isn't sufficient water available. I spoke to people who are now on water restrictions and adjusting their lifestyles—no longer showering every night of the week. These are the realities you face when things become this bad. I spoke to people about nearby Tenterfield, where the council is now bringing in mobile desalination plants so they can extract water from bores that they wouldn't ordinarily extract from because of the saltiness of that water. I haven't checked, but I suspect these mobile plants may be run by diesel. If that's true, it seems a bit counterintuitive. These are the desperate things we need to do. In Stanthorpe the community expects that in the absence of substantial rain the town will be out of water by December. The mayor told me that because of the success of water measures in the community that may now extend to March. We all pray that that is the case, because that is three more months of opportunity for some meaningful rain. But I didn't feel any optimism with respect to that.

Of course this government, now in its third term, doesn't have a comprehensive response. It doesn't have a drought strategy. There's a little policy here and a policy there. I heard the Deputy Prime Minister on his feet yesterday. He took a question from his own side about the impact of drought. I may stand corrected; there may have been three things; but I think he only made a couple of points. One was on the farm household allowance, which has been a disaster for this government and for the farming communities relying upon it. Too many people are unable to secure it, and now we have people coming off it because it's a time-limited welfare payment. It's the equivalent of an unemployment benefit for farmers with a more relaxed assets test, and we support it. Of course the government has always had one. Under the old exceptional circumstances arrangements there was a payment for farmers with a more relaxed income test. This is not new; this is not an initiative of the government. But it's the first time it's been time restricted, and it's the only time a government has had the implementation go so wrong.

Of course, there is the Future Drought Fund. We are now six years into this government, and it will deliver something next year—not next month or next week—something like eight years into the drought, to people who are yet to be named to do things yet to be defined. We don't know what the Future Drought Fund is going to do. What we do know is that from that fund the government will draw down $100 million every year. That is a lot of money in everyone's language, but in these circumstances that money will not go very far. Indeed, if the government keeps to its commitment to spend this money by investing in innovation and technologies which help to build resilience on-farm, then none of this money will go to farming families. That's not what it's about. It's not a handout, or should not be a handout, to farming families as they have defined it. It's about building resilience on farm: innovation, regenerative agriculture, soil health, water efficiency, maybe plant science—all the things that will help our farmers defend against drought in the future.

So the reality is that, if the government is being honest, none of this $100 million is going to farmers per se—not directly, anyway. I hope and trust that farmers will benefit from a modest investment in the innovation we require to help them build defences against drought. But let us not pretend that from July next year there's going to be some additional assistance going directly to farmers, because if that's what happens the government will have misrepresented what the Future Drought Fund seeks to achieve.

We've had the drought coordinator, the drought envoy, the drought task force and the drought summit. Now we have a drought minister, they tell us. Sadly, again, he declared to the nation yesterday on national television that he doesn't believe in the link between climate change and human activity. But the very foundation to a comprehensive drought policy is an acceptance of that fact. What hope does the Australian community have—and I quoted the percentage of people who are crying out for us to act—when their drought minister denies the connection between our activity and what is happening in our natural environment and with our climate?

People say to me, 'What would you do?' Well, what I can't do or what Labor can't do is rewind the clock. We don't have a time machine. We can't make up for the six years we've now lost since this government walked away from the COAG process and the plans COAG had developed for the further progression of a new approach to drought policy. Back in 2012, something historic happened: Australian governments agreed that the current suite of policies were not working, were counterproductive and were expensive, and that we needed a new approach. COAG was charged, having agreed to rip up the old framework, with progressing a new framework. Sadly, as one of the its first acts after the 2013 election, this government abolished the COAG committee. It abolished the body which was given responsibility to develop a new drought policy. Here we are, six years on, and we've got a potpourri of initiatives. There is a focus on initiatives that carry a big price tag, like the Future Drought Fund at $5 billion. It sounds fantastic, but the government never, instead of saying 'We've got a $5 billion fund,' says, 'We're going to spend $100 million out of this fund every year,' and neither does it define what it's going to do with it or who it's going to.

What else do we have? We've got a failed farm household allowance framework, as I said. I will give credit where credit's due and I've done it before. The government has made some changes to capital depreciation schedules, which incentivises farmers to invest more in food storage, fencing and water efficiency projects. That is a good thing. The only problem is that you can't invest if you've got no cash. And you can't offset your investment if you don't have any profit. That has to be part of the mix, but it's not helping the most desperate of farmers in our country. Now, while I'm giving credit, I will acknowledge that I finally heard the Prime Minister, at the bush summit in Dubbo, say something about the storage of carbon in our soils. That's a shift in language from him; I've never heard him say that before. Sadly, I haven't heard him say it since either, and I appeal to him to say it more often.

As I said on national radio this morning, the opposition still stands ready to work on a bipartisan basis with this government to do the four things we need to do this job properly. We've got to tackle mitigation and, to tackle mitigation, you have to push aside the denial. We appeal to the government to do so. We've got to accelerate and progress adaptation for those on the land and those not on the land, whether it's the way we use our water at home or the way we use our water on the land. On the land it's about the way we treat our soils and the farming methods we use on a daily basis. They need to be the most efficient and the most sustainable in the world because we do farm and live in the driest inhabited continent in the world. We have terrible water scarcity and we've got to be smarter about how we use it. All of us do. The third point, of course, is the income support system. I have spoken about that. And the fourth is water infrastructure. This is the government that would have had you believe six years ago that they were going to build a dam a week. A dam a week is the way in which you'd interpret the language. I said at the time that the member for New England will never build a dam, and he never did and probably now never will.

Water infrastructure is my preferred term because water infrastructure doesn't necessarily mean dams. Some dams will work and some will not. Some will stack up environmentally and some will not. Some will stack up economically and some will not. But the last government to build dams and water infrastructure in this country was a federal Labor government in partnership with the states. This government, after six years, is yet to turn a sod, so what will we do? We can't get the six years back, but there's a four-point plan. It's pretty obvious, and we can't waste another day. These amendments and these bills are welcome, but they don't go far enough. No approach in this area of public policy goes far enough, and no approach will go far enough until this government accepts the link between human activity and climate change and finally gets around to doing something about it—an energy policy and a drought policy that will help our farmers in our rural communities get through the terrible time they are currently facing.

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