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

by leave—I move:

That this bill be now read a third time.

The Offshore Petroleum Amendment (Miscellaneous Measures) Bill 2008 will enable the Offshore Petroleum Act 2006 to come into force as soon as necessary amendments are made to all the state and Northern Territory mirror legislation. As I noted in my second reading speech, the amendment bill is of a largely technical but nonetheless important nature. It has three key elements: first, to clarify provisions to ensure they operate in the way that was intended; second, it includes a policy change repealing section 327 of the act, which gives the minister certain emergency powers in the Bass Strait; and, third, to convert geodetic data references of the area descriptions in the act from Australian Geodetic Datum to the current Geodetic Datum of Australia. These amendments are necessary to ensure that the regulatory regime continues to support the efficient exploration and development of our oil and gas reserves. The amendments were introduced into the last parliament, and the bill passed the Senate as non-controversial, but it did not pass the House of Representatives prior to the parliament being prorogued. The Senate Standing Committee on Economics examined the bill and recommended that it be passed due to its primarily technical nature.

In closing this debate, the oil and gas industry is crucial to the Australian economy. As has been noted by other members, the oil and gas industry is a creator of significant wealth in the Australian economy. The value of oil and gas produced in Australia in 2007-08 is estimated to be in excess of $27 billion, with exports valued at around $16 billion. The industry employs approximately 15,000 people and will pay $3.6 billion in resource taxation to the Australian government in 2007-08. Oil and gas account for 33 and 21 per cent respectively of Australia’s primary energy consumption. They are exceptionally important.

The amendments in this bill are required to ensure that the regulatory regime continues to support the development of our vital oil and gas reserves. As we all appreciate, this issue is of critical importance to our nation. Whilst Australia is very well endowed with gas, with more than 110 years of gas reserves at current production rates, we only have about eight per cent of known oil reserves remaining at today’s consumption rates. Consequently, Australia is looking down the barrel of a $27 billion trade deficit in oil and condensate by 2015. Therefore, it is very important that we work to open up more frontiers.

While the International Energy Agency predicts that Australia will become the third largest exporter of LNG in the world within the next decade, the big challenge is to find major new oilfields. Australia, in a sense, is very much underexplored by world standards, and most undiscovered petroleum resources are thought to exist in frontier offshore areas. Fortunately, there is considerable exploration activity occurring. Exploration spending for oil and gas exceeded $2 billion in 2006-07, and in mid-2007 there were 220 active exploration permits, 49 retention leases, 65 production licences and 52 pipeline licences in Australian government waters.

In ending my remarks, I wish to thank those members who have contributed in such a constructive way to this debate—the former minister for resources and member for Groom, the member for Lyons, the member for Brand, the member for Wakefield, the member for Moreton and the member for Kalgoorlie. I note and appreciate especially the member for Groom’s constructive support of the legislation as the former minister. I also note his remarks regarding the retention lease regime. I simply say to the member for Groom that he knows full well that I am not given to knee-jerk remarks but that as minister I will take the matter of Australia’s energy security very seriously. To that end, I will ensure that the retention lease regime, which has always had a ‘use it or lose it’ provision, is rigorously applied to get the balance right between corporate interests and Australia’s national interest.

I would also like to assure the member for Kalgoorlie that the government is committed to continue with the impacts approval process in parallel with the strategic assessment of the Kimberley. The minister for the environment has assured me that the project will be considered on its merits and appropriately so. I also note the member’s concerns about the need to remove unnecessary regulation. I understand that COAG will consider later this month whether a study of multijurisdictional regulation should be undertaken. I very much support such a study.

In conclusion, the Offshore Petroleum Act will provide a much more user-friendly enactment and reduce compliance costs for the upstream petroleum industry and governments. It will therefore help ensure Australia remains one of the most attractive places in the world to explore for and develop petroleum resources. I thank the members for their support of this bill and commend the bill to the House.

Question agreed to.

Bill read a third time.