Madeleine King (Brand, Australian Labor Party, Shadow Minister for Trade) Share this | Hansard source

Today I rise to say that Labor will support the two bills before the House, the Offshore Petroleum (Laminaria and Corallina Decommissioning Cost Recovery Levy) Bill 2021 and the Treasury Laws Amendment (Laminaria and Corallina Decommissioning Cost Recovery Levy) Bill 2021. Labor referred these bills to a Senate inquiry to ensure thorough parliamentary scrutiny. Labor believes industry and workers must be at the table for this vital reform. I note the publication of the final report of this inquiry on 18 November 2021.

These bills introduce a temporary levy on offshore petroleum production to recover the Commonwealth's cost of decommissioning the Laminaria and Corallina oil fields and associated infrastructure. This aims to ensure taxpayers are not left to pay for the decommissioning and remediation of these sites. Labor agrees that companies that operate oil and gas infrastructure must be held to the obligations to decommission and remove that infrastructure in a safe and timely way. I have spoken in this place at length regarding the situation in the Laminaria and Corallina oil fields, otherwise known as NOGA or the Northern Endeavour fiasco, and the need for broad reform and the regulation of decommissioning of offshore oil and gas infrastructure in this country.

The levy will be at a rate of 48 cents per barrel of oil equivalent and be paid on an annual basis in arrears. The first payment made will be for the 2021 financial year and be payable in the first half of 2022-23, which is why it is important it passes through the House and the other place today.

All entities with an ownership interest in petroleum production license issued under the Offshore Petroleum Greenhouse Gas Storage Act of 2006 will be liable to pay the level administered by the Australian Taxation Office. The levy will be in place until the net cost associated with the decommissioning has been recovered, or 30 June 2030 at the latest.

Labor acknowledges the fact the levy is temporary by design; however, we are rightly sceptical about the level of public consultation the government has undergone throughout its development. I have consistently argued that industry is at the table when designing this scheme as well as the workers concerned. That's why Labor referred this rate of levy alongside the bills as a whole to the Senate to scrutinise and ensure the industry and worker representatives have a voice. The Senate committee inquiry also considered the impacts of this decommissioning work on jobs in offshore gas and related sectors, including shipping and port workers.

Rigorous decommissioning requirements will be an important source of jobs for workers in the oil and gas industry as the energy transition to net zero emissions takes place. Those in the oil and gas sector have adjusted to me that the direct spend will be up to $1 billion. This represents potentially a $1 billion opportunity to ensure that Australia's decommissioning task is set up properly to ensure good jobs, safety in those dangerous jobs and good environmental outcomes, and $1 billion worth of jobs for Australian decommissioning workers as well.

A report from National Energy Resources Australia in February on the projected total future Australian decommissioning liability found that decommissioning of these facilities would cost $52 billion based on the total removal of all offshore equipment. There are 1,008 offshore wells; 57 fixed facilities, with 37,000 tonnes topside and 518,000 tonnes underwater; 82 pipelines, with a total length of 4,960 kilometres; plus 205 infield flowlines; 130 umbilicals the length of 1,500 kilometres; and 535 subsea structures, such as manifolds. There is much work to do. Twenty-seven per cent of this activity may need to take place before 2025 due to facilities that are already disused, and 51 per cent of this work could be due before 2030. About half of this work is in Northern Carnarvon Basin, off the north-west of the Western Australian coast, between Exmouth and Dampier. Another quarter of this work is in the Bass Strait.

There is no doubt that Australia needs a regulatory system that delivers the planning, monitoring, oversight and enforcement of high standard decommissioning outcomes for offshore oil and gas infrastructure. In that context, Labor was deeply concerned about gaps in the safety oversight from a regulatory agency. In a Senate economics committee inquiry, the department, DISER and the National Offshore Petroleum Safety and Environmental Management Authority, NOPSEMA, said that due to the fact that there was no titleholder or operator, the Offshore Petroleum and Greenhouse Gas Storage Act does not apply to the LamCor decommissioning. This meant that NOPSEMA would be unable to issue enforcement actions. Labor sought better from the government in the application of an occupational health and safety regime in a dangerous industry on the high seas, which would have been through a confidential commercial contract. This has been achieved, and better regulations will be there.

I want to thank Senator Anthony Chisholm, who worked on this committee; the Maritime Union of Australia, in particular, Adrian Evans and Penny Howard, who worked very proactively on this matter; Shawn Lambert from the ACTU; and representatives of the ECU and AWU. All these people made extremely constructive representations on behalf of current Australian workers in this industry, an industry they know well. They work on gas platforms on the high seas around this country and know the risks of this sector. It is dangerous work, and it will be an emerging industry in the future as we move, and companies themselves move, quite rightly, to decommissioning assets in an environmentally safe and worker-safe way throughout the coming decades. I thank them all for contacting my office and being very constructive.

I also want to thank the government and Minister Pitt and his office, who made an undertaking in relation to ensuring that the operator is subject to the NOPSEMA safety regime. The minister and I agreed that the safety of those workers decommissioning the LamCor well is paramount. I thank him and his office again for the cooperative and collegiate way in which they approached this issue. It's very much in the national interest. I commend these bills to the House and reaffirm Labor's support of them.

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