Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak to the committee report Down under: greenhouse gas storage—review of the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill. The Minister for Resources and Energy referred this inquiry to the committee in May because it is groundbreaking legislation—no pun intended—and it is very important that we get it right. This recommendation does not happen very often, I am informed. Even though as a new member of parliament I have limited experience of committees, I understand this sort of referral does not happen very often, especially to a committee that was comprised of Labor, Liberal, National and Independent members. It shows how significant this project was for Minister Ferguson.

This legislation will enable carbon dioxide to be stored safely and securely in geological storage deep under the seabed in areas controlled by the Commonwealth. It would also be a guide, wherever possible, for the state legislatures considering the same problem. As a member of the Standing Committee on Primary Industries and Resources I was very pleased to have been part of this inquiry and appreciated the opportunity to delve into an industry that could be a part of the solution to reducing Australia’s greenhouse gas emissions.

As the Rudd government faces up to the harsh realities of climate change and the catastrophic impact that human-made CO2 emissions are having on our environment, we are exploring ways to reduce carbon emissions and also to remediate existing emissions through carbon capture and storage. Geosequestration, a word that rolls more and more easily off the tongue, is basically permanently storing captured CO2 under the seabed. This is a solution that complements the existing offshore petroleum industry.

New industries are driven by innovators, developers, entrepreneurs and consumers. Unfortunately, it is usually the case that governments play catch-up when it comes to regulating emerging industries and balancing the rights of existing industries. A good example of this is the internet. By 1997 there were three million internet users in Australia but, unfortunately, there was no Commonwealth legislation concerning matters such as copyright or privacy for this new media. Imagine three million road users who did not have any road rules. As the number of internet users grew and the technologies developed through the late 1990s, the internet became a breeding ground for music and video piracy. By the year 2000 nearly four million households had internet access, but it took ages for the government to introduce legislation to regulate what happens on the internet.

However, when it comes to offshore greenhouse gas storage, the Rudd government is getting on the front foot early. In fact, Australia is one of the first countries in the world to establish a framework that will support such geosequestration. To use an old mining analogy, the Rudd government is the canary in the mine shaft. This inquiry included a broad consultation process and received 32 submissions from governments around Australia, from industry stakeholders of various sizes, from environmental groups and even from individuals. These groups represented a range of interests, including petroleum titleholders and greenhouse gas storage proponents. In my view, it was a very interesting manifestation of a truly consultative government prepared to receive a broad range of views. The committee’s inquiry learned that one of the most significant challenges for this legislation was to effectively balance the rights and interactions between greenhouse gas storage and pre-existing petroleum titleholders.

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. Total production of crude oil in 2006-07 was 28,844 million litres, or 504,000 barrels per day, while total production of natural gas was 39.4 billion cubic metres. The industry in Australia consists of more than 200 small, medium and large companies and employs about 15,000 people, so it is a very significant industry. This financial year the industry will pay about $3.6 billion in resource taxation to the Australian government. I am sure Mr Swan would agree that it is a very, very significant industry. With more undiscovered petroleum reserves offshore, the industry has a bright future in Australia—which is why the inquiry concluded that minor improvements could be made to the bill to strike an appropriate balance between the two industries, between the petroleum and gas industry and geosequestration.

The inquiry’s most significant recommendation was that the minister be given power to direct parties to negotiate in good faith where there are potential or actual overlapping greenhouse gas storage and petroleum titles. This agreement process is modelled on legislation in Queensland, the Mineral Resources Act, which has been used to successfully mediate between the interests of coal and coal seam gas industries in Queensland. This agreement process was put forward by Anglo Coal and the joint submission of the Australian Coal Association and the Minerals Council of Australia. The ACA and MCA submission stated:

The key features of the Queensland CSG—

coal seam gas—

regime are that parties with competing natural resource interests are required, firstly, to exchange relevant information and, secondly, consult or negotiate with each other with a view to achieving the best resource management outcome, including safety management arrangements.

Before being elected to parliament, I was a policy adviser to the Queensland Resources Council and, before that, I worked as a mines and native title adviser to the Queensland government, so I have seen the Queensland Mineral Resources Act in action. I have seen how the parties, when confronted with a minister making a decision, can, surprisingly, come together and reach an agreement where they are happy—or less unhappy, perhaps.

The ACA/MCA also recommended that the minister be granted circuit-breaker power in the event that parties cannot reach an agreement. So we will have the Minister for Resources and Energy, Mr Ferguson, being like Solomon, I guess—making a decision with the public interest test in mind.

Greenhouse gas storage is an expensive endeavour and obviously will be much more viable in a carbon tax environment. With this in mind the committee made a number of recommendations to help stimulate investment. These included the recommendation that existing petroleum operators be offered a one-off opportunity to incorporate a greenhouse gas assessment permit over their exploration or production licence. Petroleum operators are best placed to develop storage sites, in terms of their knowledge and expertise. The committee also recommended that investors who can demonstrate a readily available CO2 stream for geosequestration be given preferential consideration. Obviously, they have the inside running if they have the greenhouse gas ready to go. The committee also recommended financial incentives for the earliest movers in this new industry. These are very common-sense approaches.

The committee is confident that the legislation introduced by the Minister for Resources and Energy will provide a solid base on which to cultivate this very important new industry. It will also serve as an example to the rest of the world on how we can reduce our greenhouse gas emissions.

This week we have heard a lot of comment from those opposite about greenhouse gas, about climate change. I am embarrassed to say this, but I was in the Senate last night and I heard a new Liberal senator talking about climate change. It is a line that I seem to have heard over and over from those opposite: we produce less than two per cent of the world’s CO2 emissions and it is not that much. But this is a fundamental error in thinking. We must be a bit more visionary. We must make more of a commitment to the collective future of the planet, rather than just holding on to that tenet of Liberal Party beliefs of looking after the individual. This is not the time for individual beliefs; this is the time to realise that we are part of a planet, and there will be significant consequences if we do not.

I commend the chair of the committee, Dick Adams, the member for Lyons; the deputy chair, Alby Schultz; and the rest of the committee, some of whom are here today, for their great work on this. I commend the report to the House.

John Forrest (Mallee, National Party, Shadow Parliamentary Secretary for Trade) Share this | Link to this | Hansard source

I am really quite pleased to take note of this report. It is an excellent piece of work, on an important piece of legislation, referred to us by the minister on 18 June. As a committee we beavered away at it, completing our report by August—a pretty short time line. I think it is good that the House of Representatives Standing Committee on Primary Industries and Resources has been utilised in this way. I think it is an efficient use of committee resources, particularly on legislation as technical as this can be. We had a debate earlier in the day on a previous offshore petroleum bill which is highly technical, so to utilise a committee in a way that can broaden consultation with all the key players is very useful.

In fact, the member for Moreton made reference to the fact that this is not usual procedure, particularly for the House of Representatives. I am grateful to the Clerk for providing me with evidence that, over the last 13 years, there have only been nine occasions when legislation has been directly referred to a House committee, and the last one was on 20 April 2000. In the Senate, of course, it is regular practice to refer legislation to committees, and I think it is an excellent opportunity for the House committees to be utilised in a very constructive way.

Very often we beaver away on an inquiry on a matter of incredible public importance and we collect evidence over a long period—12 or 18 months. We pour our hearts and souls into the report, we submit it to the parliament and then we wait for too long a period to get a response. But this one was short and sweet, and I think we would like to see a lot more of that more strategic use of parliamentary committees. Sometimes I think it is a great shame that the public do not see the hard work of committees as they go about their business in the national interest in a non-partisan way. In fact, the public, particularly the media, focus on that short 1½ hours of theatre every day in question time and do not see the real productive capacity of a parliament. Committees are made up of people with a range of expertise and they can make an important contribution.

This particular legislation, the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, is quite sensitive, as indicated by the enormous interest that was shown in it as the committee collected evidence. There are 19 recommendations, a fact that other members have made reference to. In the short time allocated for this discussion, it is not possible to refer to all of them but, of the 19 recommendations, there are four that I would particularly like to make reference to. One was quite clearly the challenge of the co-existence of future petroleum interests associated with greenhouse gas storage and sequestration in the same licensed area, if you like. It is particularly relevant in the Victorian location offshore from Gippsland because of the close proximity of the potential storage resources and a very high emission electricity industry out of the Victorian brown coal industry. It was a particularly challenging inquiry to take into account all of those interests. I might come back to some of these issues shortly.

The second recommendation is the need for confidence in this industry. The member for Moreton made some reference to that. We are talking about substantial capital investment—huge—measured in billions of dollars, so the potential players in this market need absolute certainty. I am fairly convinced that the provisions of this legislation will not be necessary for some time yet, but I think at this early stage it is very strategic that the bill has been introduced to give some certainty in the long planning process that is going to be involved in getting offshore sequestration up and operating.

The committee noted that there are examples all around the world, but again it is still a very new science and there is no ‘one site fits all’ example because of the geological vagaries in the way the earth’s crust was created. It will be an enormous challenge for industry, particularly in a commercial sense, to be confident that what they are doing is in the long-term interest and provides storage security.

That then led us to consideration of the evidence on the issue of long-term liability. We are talking about the sequestration of carbon into geological formations over a long period of time, which could be 30 or even 50 years, and then the longevity continues beyond that, perhaps for hundreds of years or even thousands. We had to consider all of the uncertainties of the earth’s crust. I mean, it moves. So the question is how to manage the ongoing liability while still maintaining the common-law responsibility of those people injecting the carbon so that they do the right thing, invest in the right sort of technology and take every precaution.

An interesting issue which the committee dwelt on towards the end of the inquiry, which came out of some of the evidence, was the need to have a public awareness program to make sure that the public completely understand what carbon sequestration is—that is, injecting carbon dioxide into the earth’s crust. There is some perception around that this is a noxious gas. It is not. Carbon monoxide is dangerous to human beings in an immediate health sense but carbon dioxide is not. It is a dangerous gas, as we now know, as advised by the world scientific community, in terms of its impact on the environment, but we need to make sure that people understand that this is, in an immediate sense, a safe gas. It is important that people make the distinction and understand the long-term reasons for it to be sequestered so deep down in the earth.

The committee was charged with the responsibility to asses this new legislation because it sets up a very important framework for the introduction of greenhouse gas geological storage. This is a very important piece of legislation. As I have said, it is quite timely in order to provide the opportunity for the long-term planning that has to be associated with that. The bill we discussed earlier today was about petroleum licences and the need to make sure that there is consistency in the way that licences are allocated all around the globe, which is an orb. We touched on the challenge of surveying an orb with a curved surface and the fact that these operations, whether we are talking about sequestration or the extraction of oil and gas, are operating in a concentric environment. As I tried to explain earlier, it is like a keystone with tapered edges as it comes into the centre of the earth. It has a curved surface, so the surveying challenges are fairly intense. The legislation that we debated earlier today is important because we are going to have to have absolute accuracy as the provisions of the carbon sequestration bill which the committee considered come into play. There is an enormous concern out there about resource security for the petroleum extraction industry and the protection of the huge investment they have made. There is also concern about the concept that within the same licence area there is the possibility of an exhausted gas field being used for the sequestration of carbon.

I found the inquiry quite challenging and quite exciting. I would like to commend the committee. We are a good, hardworking committee. We are chaired by the member for Lyons. We are a committee composed of all of the parties, including the Independents. We have a reputation for pursuing matters in the national interest and avoiding any partisanship. This is an excellent report. The title, Down under, makes it very much Australian. As the member for Moreton made reference to, we are leading the world with the introduction of this legislation. In that sense we will be at the coalface, if you like, in getting this right. I do not think we are there yet. I will be very keen to see what the minister does with the 19 recommendations that the report makes.

We are in an area of science and geological pursuit where there are enormous unknowns. But the Australian way is to take on challenges like that. The committee have worked hard to assist the parliament to make sure that we get it right. We have consulted widely and heard the views of a wide range of players and the public as well. At the end of the day it is about creating an environment where there is absolute resource security so that the players know and understand at an early stage what is involved before they start making their plans. It will involve multimillions of dollars and, without doubt, the interests of players who are outside Australia as well. I am pleased to take note of this report. I commend the committee for the great work that we have done together. I look forward to the ongoing improvement of this bill to make sure that the things that we have set out to tackle are in fact secured.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

by leave—I thank the honourable member for Forrest for his contribution to this debate on the Down under: greenhouse gas storage report and his contribution to the committee’s work. He always brings his expertise in engineering to committees dealing with such matters. The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, which was introduced into parliament by the Minister for Resources and Energy, the Hon. Martin Ferguson MP, on 18 June 2008, will allow for the storage of greenhouse gas in offshore Commonwealth waters.

I am pleased the committee had an opportunity to look at this legislation. It is pretty rare that House committees get an opportunity to do so. It is important. It is a new thing that we should encourage. We should be asking the executive to do this. I think we get better legislation if committees get the chance to look at legislation. The mother parliament, the House of Commons, does this quite regularly on major legislation. It means that not only do ministers have to be up to date a bit but also that government and opposition members have some input and understanding and have a go at the legislation before it hits the parliament. I think this provides opportunities to improve the legislation before it is enacted.

The inquiry reviewed the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 to establish legal certainty for access and property rights for the injection and long-term storage of greenhouse gases in offshore Commonwealth waters. It ascertained whether it would provide a regulatory regime that would enable management of greenhouse gas injection and storage activities in a manner which would respond to community and industry concerns. It was also important to provide a predictable and transparent system to manage the interaction between greenhouse gas injection and storage operators with pre-existing and co-existing rights that prevail under that act, including but not limited to those of petroleum and fishing operators, if there is likely to be any conflict. Of course, the committee was able to deal with some of that. We also needed to promote certainty for investment in injection and storage activities and establish a legislative framework that will provide a model for adoption on a national basis. People are waiting for opportunities to do further work in the states in this area.

The committee received over 20 submissions, conducted many public hearings and heard from a variety of witnesses. The proposed management of interactions between greenhouse gas storage proponents and pre-existing petroleum title holders was of particular interest to the committee during its deliberations. In discussions, the petroleum industry indicated that they were not totally happy with allowing other companies to drill holes where they already have rights to abstract oil and gas. They felt that it would or could have a considerable impact on their operations and may compromise their leases where they have the right to drill or are already drilling and abstracting oil and gas.

Those companies which are looking for greenhouse gas storage space believe that pre-existing abstraction areas would be the most appropriate to develop for storage. Of course, this is true in the Gippsland Basin in Victoria and offshore there. A lot of work has already been done in that area, where much gas and oil are abstracted, and a lot is known about that basin and the opportunities for storing CO2 there. Those companies with CO2 streams to store would be seeking to do so especially in those areas.

The oil industry have the technical expertise as they are already in the business of extracting oil and resubmitting CO2 into these underground basins and have been doing so for many years. They have great expertise in this area. So the natural conclusion would be that they should work together with what is essentially a new industry so that both of these commercial interests—the petroleum industry and the companies looking for storage for their CO2 stream—could benefit.

The committee thought that somehow we needed to bring these two groups together and explain their possible common interest, both economically and technically. The petroleum industry is the prime body to inject, store and monitor the sequestration, value adding to their production cycle, while those collecting the CO2 could have a ready and highly competent technical partnership to dispose of their product. It needs to be an open and commercial relationship, where they come together in a fair and proper manner.

The committee recommended that the current bill be amended to provide for the responsible Commonwealth minister to direct parties to negotiate in good faith where there is potential for actual overlapping greenhouse gas storage and petroleum titles under both recommencement petroleum titles and post commencement petroleum titles and for the responsible Commonwealth minister to be empowered to direct an outcome.

Petroleum companies are still a bit reluctant but, with further negotiations, we believe not only that it would it have both financial and technical advantages for them but also that they would be on the ground floor of a brand-new industry and could attract some financial assistance. In recommendation 13, the committee recommend that the government consider further financial incentives for the earliest movers in this new industry. To make it a transparent process, this should be made public at the earliest opportunity.

The issue of where there is just gas drilling came up during the inquiry. The gas and the petroleum industry have to deal with the CO2 that is currently coming from their production or future production. This issue arose in the good state of Western Australia, just outside the Broome area, where there is a new opportunity. There will probably be four or five different well sites offshore. Companies will look at using their planning and engineering expertise to bring that together so that they can bring the gas ashore, remove the CO2 and put it underground in one of those areas. I do not think the old pearl shells of the Broome area have, as yet, been rotting long enough to produce coal, so it does not look as though there will be another stream of CO2 that needs to be dealt with from that production.

There are two different situations to deal with. We think that this will need to be dealt with in an area that the bill does not really look at in any way. This would somewhat take away an open tender process, but when we are just dealing with the one area and the one region it can probably be dealt with in the public good. We have the waste product and areas have been identified as to where it might be safely contained in the long term. The petroleum companies can exercise their rights over their existing titles, but if they are prepared to look at storage too then there need not be an open tender process as long as they are prepared to bring the two together. If new supplies of gas and oil are found under pre-existing title during the carbon storage development, that would convert to the original title owner, as we heard in evidence. I think everybody was of the opinion that, if somebody has got to have a pre-right to that, even if someone else was drilling the hole to seek storage of carbon, the original title holder should benefit from anything found and that if nobody has a title over it then it should convert to the Commonwealth.

As you can see, it made for a very interesting inquiry with sunrise industry opportunities but with conflicting ideas. So it was important to try to achieve a nationally consistent framework, with the public interest being the main theme in what we were trying to achieve. It will require further work between the Commonwealth and the states. Already a number of states are making progress on the development of greenhouse gas storage legislation designed to fit their own pre-existing legislative frameworks. In addition, it is evident that a number of industry and community groups prefer the legislative framework to be developed in the states. The best hope would appear to be that active cooperation between the different levels of government and industry may be achieved despite legislative differences in that area. I believe the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 will allow these differences to be explored and that a new industry can be born to assist in helping Australia to meet its greenhouse gas targets while still using the predominant world energy source of coal.

The world is very interested in what we are doing here. This is a brand new piece of legislation for the world in the sense of having a legislative process that can deal with CO2 storage. The committee heard evidence from the Norwegians, who have been abstracting CO2 from gas production offshore at a place called Slagen for around 10 years. They have been very successful in making that work and have gained a lot of expertise and knowledge from that. In other parts of the world, including the United States, CO2 is used by the petroleum industry to put pressure back into their oil and gas abstraction holes to build pressure to allow them to gain more of the oil and gas from those wells.

Coal is the world’s dominant energy product. We have 400 years of reserves in the ground—probably more, I think, from some of my reading. That is based on the present production use. So it is still a major energy source for our country and of course a very cheap one. So it is logical that we should endeavour to spend money to find the expertise and find the way that we can extract the CO2 from it, and then store that in a very sensible and responsible way. I think we can do that. We have made recommendations which I hope the government will pick up and, therefore, improve the bill that is before the parliament. I look forward to this industry emerging and dealing with a part of the greenhouse gas abatement that we have to deal with as a country.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

It is with pleasure that I support the Down under: greenhouse gas storage report and endorse the remarks of the member for Mallee, the member for Moreton and our current chair, the member for Lyons. This is a very good committee. It has been very effective, both under the previous chairmanship of the member for Hume and currently under the member for Lyons. As most people would know, I was in the state parliament for 10 years, and being on a committee in New South Wales was something you did when you wanted to waste your time. In my view, those committees were not very effective and were very politicised, in the main. I have spent six years on this committee now and I would defy a stranger to come into the committee room while debate is taking place and identify particular individuals as running a party or philosophical line. The conduct of the committee has been very good. The minister that referred the inquiry to the committee, Martin Ferguson, was in fact a member of this committee previously. No doubt he could see that he would get genuine consideration of the issue at hand, rather than some game-playing activity that definitely would have happened if it had been introduced in the New South Wales parliament. I do congratulate my fellow members for the work they have done. They have actually done a lot more on this report than I have, because I was away for about a month.

This is an area that I do have some interest in: all the greenhouse gas issues—carbon emissions, methane, nitrous oxide—and the impact that they have on the longevity of the globe. I think these are exciting times that we are in. Too often this is seen as something that we would rather not face and something that we tend to be frightened of, whether that be in the agricultural sector or just as normal citizens reflecting on the possible impact on electricity prices or fossil fuel prices. There are a whole range of concerns that are very easy to beat up in a political sense.

I see Australia in particular as having the potential to lead this debate—and we are in terms of this legislation. I do thank the minister for actually bringing the draft legislation to a committee for consideration because therein lies a solution, a model, that we probably should develop in terms of an emissions trading scheme. What the minister has done has brought groups from both sides together to formulate a strategy on a particular proposal for the injection and storage of greenhouse gas—carbon dioxide. That is exactly what the parliament needs to do. If there were ever an issue where we needed to come together and establish a system that we can all back, this is it.

It is too easy to complicate this issue with simple solutions. It is too easy to say that the price of electricity will increase and therefore we should do nothing. It is too easy to blame one side or the other—this goes to the Labor government—about the impacts of an emissions trading scheme. Of course it is going to have an impact. Of course there will be some difficulties. I would challenge the opposition and the government to actually breathe in a little and try to formulate a path.

We could take the example set by this committee and establish a pathway where a common agenda can be driven, rather than taking the easy path of establishing some political agendas, whether they be the climate sceptic agenda or that every price increase from now on is going to be the fault of one K Rudd. We know those things are not true. The opposition is not full of climate sceptics in my view. Any increases in electricity are not going to be all the fault of the Prime Minister. But if we were able to establish a framework, as this report does around an emissions trading scheme, it would be far better for the population of Australia to see that leadership being expressed by the parliament rather than by a game that may well play on the fears of many people about the price of electricity and other activities.

As I said, I believe this is an exciting time in the formulation of legislation. This particular report is about how we successfully store greenhouse gases in Commonwealth offshore waters. There are other ways of addressing this problem as well. Essentially—and I am probably oversimplifying the issue—globally we have extracted carbon deeply buried in the mantle of the earth and emitted quite a lot of that back into the atmosphere as carbon dioxide. That is one of the greenhouse gas problems that we have. It is not the only one. Methane, nitrous oxide and other gases play a minor role. In this case I am focusing on carbon dioxide. We have taken it out of the ground and put it in the air.

How do we get the situation back into balance? Some people would suggest the answer lies with trees—and we probably should stop chopping them down—and others suggest we should plant a few more. I and others have suggested that we develop more healthy soil technologies such as no-till farming and some of the pasture techniques that are out there now where there is less and less disturbance of the topsoil. That will have a positive effect on the natural sequestration of carbon in organic matter, humus, in the soil. Others would argue that is difficult to measure.

Measurement in a sense plays on the debate that is all around. You only enter this debate if you can make money out of it. If you cannot trade it, it is not worth looking at and to trade it there has to be a degree of certainty in terms of the market. I would argue and have argued to the Prime Minister and the Minister for Agriculture, Fisheries and Forestry that it is very important to look at this not only in terms of emissions trading but also in terms of drought policy and encouraging better techniques in the custodianship of our soils. If a by-product of that is a greater accumulation of carbon in the soil, so be it. If you can put a price on it, that is all to the better but I think the real benefits will be much greater to the long-term nature of the soil and the agricultural producers that look after that soil than any trading arrangement that could be put in place. Others would argue that that is nonsense.

Everybody has a view. I am aware of activity in your electorate, Mr Deputy Speaker Scott, and in the member for Capricornia’s electorate where work is being done on measurement of soil carbon with a view to being part of the process of putting the carbon dioxide back in the ground from whence we took it. This document Down under also looks at a framework to develop a storage program that can put it away so that it is not in the atmosphere.

I was in Canada a couple of years ago as part of a study tour and I visited an ethanol plant that had just been commissioned. I had had a little bit to do with ethanol plants and I noticed that there seemed to be more to this particular plant. There was a structure attached to the end of part of the plant. I said to the people there, ‘What is that?’ They had some convoluted name for it, but essentially it was a carbon capture device on the end of the ethanol plant. The carbon dioxide that was being emitted by this plant was being captured at source rather than released into the atmosphere. Essentially, some of the variations of this document are similar. In future we might have coal-fired power stations which have carbon capture facilities at the end, and that will be transferred back into the ground so that the nasty is taken out at source and stored in some way.

We are in a fascinating period of time really, and we really need to be progressing a whole range of research activities. In a sense, this relates to the food-fuel debate. Another part of this issue is deciding whether the priority is to feed ourselves or to keep ourselves cool. Some people would rather see a little bit less rain and temperatures two degrees higher than have no food. There is crossover in those debates. The debate in relation to biofuels production has been too simplistic in terms of whether it has to be food or whether it has to be fuel.

The interesting part of carbon capture at the ethanol plant that I was visiting was that it was seen as an asset, something to sell. One thing they were looking at doing—and there are people in Australia looking at exactly the same thing at the moment—was injecting the carbon dioxide into greenhouses to expedite the production of vegetables. It is known technology. An injection of carbon dioxide into the atmosphere of a growing plant—hydroponic tomatoes, for instance—will expedite its growth, if you can control that environment. Instead of looking at all these things and saying, ‘It is going to be too hard; the electricity bills are going to go up; there is a political dimension, so we can blame someone else for this and maybe win an election,’ I see an extraordinary capacity to launch the initiatives that a lot of Australian researchers have wanted to launch for years. In my view, it is time that we looked at this as a positive part of our history rather than a negative one.

The other day the Climate Institute released a document that talked about a computer model where people can feed different variables into the system. That document may not be totally correct, but I would encourage people to have a look at it because it is saying that we can achieve some of these targets—20 or 30 per cent, or whatever the numbers are—by 2020 without a significant increase in the cost of electricity. It can be done through a range of efficiency measures.

The key point I would like to make out of this whole report is this: it was a case where the government of the day said to the parliament of the day—that is, the parliament in miniature as a committee—‘Could you people have a look at this and try and find out something that we can agree on?’ and the committee has produced not only a model for developing a framework but also a model, in my view, for trying to address what is possibly the most significant issue any of us will address in our political careers. So I would encourage the government and the opposition to use this as a template—to put some of the simple politics aside and actually try to develop a process that solves the problem.

Many say, ‘We’re only two per cent of the world; we can do this and suffer all the consequences.’ But I think that does not put us behind; it puts us in front. At some stage—perhaps after the American election in a few months time and the various issues that could occur there—the world is going to cotton on to this. If Australia is in front of the game, I would rather be part of that process, because we have the opportunity to set the pace rather than lag behind and be sceptical about every activity that is happening in the parliament.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

It is great to join with my colleagues from the House of Representatives Standing Committee on Primary Industries and Resources to discuss this new report, Down under: greenhouse gas storage, and to join with my colleagues on the committee in recognising what a terrific committee it is. I cannot take any credit for any of the past good work that the committee has done. Its inquiries and reports in the past have really made some substantial contributions to the parliament and also to the industries that are supported and considered by the committee. Having joined the committee in this parliament, I am very much getting a sense of the sorts of things that the member for New England was talking about. It is a committee in which you are dealing with very significant, key Australian industries that support regions that are close to our hearts, that is for sure—and yours too, Mr Deputy Speaker Scott—and you feel like you are at the cutting edge, not just in dealing with challenges to those industries but also in getting some insight into the great opportunities that exist as we overcome some of those challenges. So it is a great committee to work with.

The inquiry into the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 that the minister referred to us for consideration was a great process to be part of, not just in working with my colleagues on the committee but also—and I record my appreciation here—to see the time and effort that the companies and organisations working in the resources sector put into their contributions to this inquiry. Going into the inquiry, I read as much as I could about the technical and legal aspects of the bill, but the real eye-opener for me and the value of the inquiry was to have major players and operators in the resources sector and the research sector coming to share with the committee their experience of the commercial and practical realities of what they are doing in their companies at the moment, what they need from this legislation to give them certainty in existing investments and what they need from the legislation to encourage investment in this important new industry of greenhouse gas storage. Throughout the process we were very conscious that we were dealing with questions that go to our national interest and the future of nationally significant industries.

There is no doubt, and we heard this from previous speakers, that there are huge issues at stake here that are very well encapsulated in my very own electorate. In the west of my electorate I have the communities and mines of the Bowen Basin, and on the eastern boundary of my electorate I have the Great Barrier Reef, which, as we hear from all the scientific evidence, is going to be one of the first ecosystems in Australia that will be impacted upon quite dramatically, in a devastating fashion, by climate change. So right there in my electorate I am faced with, on the one hand, how we secure the future of the coal industry and, on the other hand, how we reduce our emissions, because the clock is ticking on the sustainability of some of our national environmental icons in Australia.

In preparing this report we were faced with that whole juggling act between the threats of climate change and what we can do to reduce emissions and, on the other hand, the fact that 75 per cent of our electricity in this country is still sourced from coal-fired power stations. Our coal exports amount to $25 billion a year, and many of our other big exporters are also energy intensive industries.

In the last few years here in the parliament we really have seized on the opportunities and the answers that we hope clean coal technology offers to us in this country as we look for a solution to both sides of the problem—environmental sustainability versus our national prosperity, based as it is so much on the resources sector. The other side of it to me, as someone who represents an area based largely on coalmining, is that if we get carbon capture and storage technology right it has the potential not just to be the solution to that problem but also to be a huge opportunity in itself as part of a new industry where Australia can export that technology and knowledge to countries that are also trying to reduce their emissions.

One side of it is that there is an awful lot of work going on, a lot of it in my electorate, with Stanwell’s ZeroGen project involving the capture of carbon from those industrial processes and from electricity generation, but now we are getting down to the nitty-gritty of putting this into action and making it work to reduce our emissions, and that brings you up against the question of storage. How do you store it? Where do you store it? And, of course, very importantly, how do you acknowledge and protect the investments and the sovereignty of those companies that are involved in the petroleum and gas industry? That is what we were grappling with here.

The bill is about regulating and managing the injection and storage of carbon dioxide and also, very importantly, managing the interaction and protection of the legitimate property interests of pre-existing oil and gas operators. The bill as originally drafted was very much about regulating a future greenhouse gas storage industry, but after hearing the evidence the committee formed the view that the bill could and should be amended to facilitate and encourage the development of a greenhouse gas storage industry. I think it is true to say of the committee that we are supportive of a carbon capture and storage industry and can see ways, through the bill, that we can expedite the development of that industry and facilitate the investment needed to get that going. You can see that in the recommendations, such as recommendation 1, which suggests that we include an objects clause in the legislation. This recognises that the amendments to provide greenhouse gas storage are included in the offshore petroleum legislation. In the objects clause we really want to have it saying upfront that this is about greenhouse gas storage as well as a significant industry in its own right. Recommendation 3 deals with acreage release and suggests:

.. no acreage be automatically excluded from consideration for selection on the grounds of pre-existing petroleum activities.

Again, we want to do what we can to facilitate investment in greenhouse gas storage operations. Recommendation 13 calls on the government to provide financial incentives for early movers in this industry.

There are also the common-sense recommendations. One great thing about the committee process is that the companies that are investing big dollars and operating in the petroleum and natural gas industries appeared before us and we gained some insight for getting greenhouse gas storage happening in a big commercial way and encouraging investment. These operators in the oil and gas sector are already out there with their investments and property rights. How do we get the new industry going alongside those existing interests? We tried to come up with some common-sense recommendations that would facilitate the greenhouse gas storage industry at the same time as drawing on the expertise and information that the oil and gas industries possess from the work they are already doing.

Recommendation 9 is about the minister having the power to bring the parties together. Where there are potential or actual overlapping greenhouse gas storage possibilities and existing petroleum rights or prospective petroleum titles the minister will have the power to bring the parties together. Let us try to get some practical commercial arrangements in place that everyone can be happy with. It is very much based on the coal seam gas regime that operates in Queensland that the member for Moreton spoke about in his contribution. We have the national interest in mind in seeing if we can come up with negotiated arrangements to promote both of those industries.

Also along those lines is recommendation 11, which states:

... incumbent petroleum operators be offered a one-off opportunity to incorporate a GHG assessment permit over their exploration or production licence, with the condition that they must demonstrate utilisation of this permit within five years, or surrender it.

Again that is recognition that it is the oil and gas industries that have the existing knowledge and expertise. If we can give them the opportunity to drive this new industry, that could produce good outcomes all around.

One of the things in the legislation and in this report that has gotten quite a bit of attention is the stance that we took on the long-term liability. The bill lets common-law liability lie where it falls. After the evidence we took the view that it was reasonable and responsible for the Commonwealth government to take on that long-term liability under very strict conditions. That very much came from the evidence about the time frames involved. A company will be injecting greenhouse gases for 30, 40 or 50 years. You then have the site closure time frame. So you are talking about operational time frames of 50, 60 or 70 years potentially. The evidence very much was that it is at the start of the process that you are going to know whether there are any problems. After it has operated and been closed down for 60 or 70 years the residual risk to the Commonwealth is very small. This is something different, and I understand it might be something that the Commonwealth is a bit reluctant to do. I think we had very good reasons, based on the evidence, to make that recommendation.

Another important thing that my colleagues have not touched on that I do want to spend a bit of time on is recommendations 17, 18 and 19. These are very much about community education, consultation, transparency of information and sharing data with the public as the site closure processes are followed prior to the site closing certificate being issued. This is very important. It is something that the bill is silent on. It came out of the evidence rather than being something we were specifically requested to inquire into.

We talk a lot about clean coal technology and the importance of carbon capture and storage but we need to realise that even though we are dealing with these terms and processes in parliament all the time, they are very new to the community and we need to take the community with us on this. It is something that the CO2CRC, with their Otway project, has shown can be done very effectively. I think those recommendations 17, 18 and 19 that talk about the need for community consultation on projects and the need for data to be shared publicly are very important if we are going to get community acceptance of this very new but very vital technology. In closing, I look forward to seeing the government’s response to this. I encourage my colleagues in the government to respond quickly because we need that certainty for industry and we need to encourage investment in this technology which is so important for the future—not just for our industries in Australia but also in the quest for reduced emissions and sustainability.

Debate (on motion by Ms George) adjourned.