Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

The introduction of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and the three associated bills is where the rubber really hits the road in terms of lowering greenhouse gas emissions. We have heard a lot from those who sit on that side of the House about what they are going to do to lower greenhouse gas emissions. But, in the 10 months that they have occupied the government benches, they have in fact done very little, if anything at all, to lower greenhouse gas emissions. They have done all the symbolic stuff. They have always been good at doing the symbolic stuff. They have done the 24-hour news cycle and they have done the stunts, but this is where it is really going to get hard.

Greenhouse gas emissions is probably one of the most complex areas that the government and opposition are going to have to deal with. I say here and now that the opposition, the coalition, will support the government in its endeavours to put in place a practical and operative suite of legislation that encourages the geosequestration of carbon dioxide in Australia. There are a whole range of reasons why that should happen, but the single biggest reason is that we must lower greenhouse gas emissions while maintaining the viability of the coal industry not only here in Australia but also in the rest of the world. If we do not do that then thousands upon thousands of workers in Australia will simply lose their jobs. They will lose their jobs because the coal industry will not have a future under the government’s flawed carbon trading legislation. They will not have a job under that flawed carbon trading legislation and they will simply be thrown out of work and onto the scrap heap. They will become part of the three million people already identified by Ross Garnaut who will have to change their professions as a result of the government’s policies on lowering greenhouse gas emissions. Rather than a practical, sensible, step-by-step approach to this matter, the government, led by the Prime Minister, is rushing this issue in such a way that is putting in jeopardy the jobs of the mineworkers in Victoria and the thermal coal workers in Central Queensland. And, apart from what we will be discussing in this bill, because it has yet to also clarify the position of those coalminers at mines that emit methane as part of the mining operation, the jobs in those mines are also going to be in jeopardy.

Australia is an incredibly good miner of coal. It does it with some of the strictest, if not the strictest, safety measures in the world. It does it in a way which has the minimum possible impact on the environment. Yet there are those on that side of the House who do not want to see the coal industry grow. Last year we heard the member for Kingsford Smith, the Minister for the Environment, Heritage and the Arts, say that the automatic expansion of the coal industry in Australia is not a foregone conclusion. We know that the Labor Party continues to rely on the Greens vote, not only to secure its vote in House of Representatives elections but also to secure its votes in the passage of legislation through the Senate. We know the Labor Party is aligned with the Greens. We know they are a coalition and we know that the Greens want to stop the coal industry completely. If we do not get this legislation right then that will happen; the coal industry, as a supplier of energy to thermal power stations in Australia, will simply close down. Without this legislation working, the costs that the carbon trading scheme will impose upon them will simply mean they are out of business. Those power stations—like the ones that we see in Queensland and the ones that Australian industry has grown off the back of because of their ability to produce low-cost energy, which has not only provided jobs but given Australia a real advantage in a whole range of industries associated with black-coal power generation—will also be put in jeopardy.

This legislation amends the Offshore Petroleum Act 2006 and attempts to establish a system of offshore titles that will authorise the transportation by pipeline and injection and the storage into deep geological formations under the seabed of greenhouse gas substances. In this instance we are talking about geosequestration in Commonwealth waters—that is, those waters more than three nautical miles offshore. In those waters within Australia’s territorial limits, CO2 hopefully will be sequestered—stored and locked away forever—in the same way that the earth had locked away, until human intervention, the oil and gas reserves that are currently providing us with that enormous and abundant energy.

There are those who are opposed to this legislation per se. It is going to be an interesting time in the Senate for the minister responsible for this legislation, as the Greens oppose this legislation out of hand. They are making wildly erroneous and inflammatory claims that CO2 cannot be stored safely underground. I say to them: before you get into the rhetoric and start talking about all the issues that excite people out of fear, let us have some facts. Let us firstly acknowledge that many of these formations that will be used under this legislation are, in fact, formations that for not centuries, not millenniums, but millions of years have stored gases like the gas that we use in our houses and in industry—‘natural gas’, as it is commonly known, which is often a mix of methane and ethane. They are gases which have been locked away by nature for literally millions of years. Plugging those reservoirs and locking in their carbon dioxide is an incredibly important part of Australia’s and the world’s move towards a lower emissions signature. So we need to make sure not only that this legislation works but also that people, when they argue against this process of geosequestration as distinct from the legislation, do not revert to emotion and scare tactics. We need to make sure that people in both houses, particularly in that other place, actually understand the issue and are prepared to discuss it on a practical basis.

A key to this legislation will be making changes to the existing regime of petroleum titles in order to accommodate the new kinds of activities being authorised under the act. Put simply, that means that, if a company has been granted an exploration lease and has converted that into a production lease on the hydrocarbons that lie below its lease on the seabed, we then need to ensure we have legislation that enables either that company or other companies to gain access to some of those aquifers—those cavities in the earth, so to speak—to store CO2. Perhaps it would be from that gas operation—as would be the case with Chevron’s proposal on Barrow Island—but it also may be the case in the Gippsland region and Bass Strait, where Exxon Mobil own extensive leases for oil and gas production. Companies that are operating brown coal power stations in the Latrobe Valley will seek the opportunity to store gas in that area.

The bill provides that there will be access and property rights for greenhouse gas injection and storage. It will describe the appropriate management systems for ensuring safe and secure storage and attempt to balance the rights of what will be a new industry with those of existing resource industries—those industries that are already operating on that lease—in a way that will encourage future investment. In those last three words, ‘encourage future investment’, lies the key to this bill. If this bill is framed in such a way that it impinges on the ability to extract, particularly, natural gas, and hydrocarbons in the form of oil and condensate, then we will not have the opportunity to use those fuels. Gas, in particular, is going to be an incredibly important transitional fuel as we move to the next clean energy technology. If we do not have that right then companies will simply not come here to explore and spend the tens of millions of dollars finding oil and gas and then the billions of dollars—and it is billions of dollars—to actually exploit that reserve, take it ashore as natural gas into industry and domestic use or turn it into liquefied natural gas and fire the power stations and homes of countries all around the world in the place of coal.

If we do not get this right, those companies are not going to come to Australia. In Australia, we always need to understand that, while we are a country of great natural wealth and enormous good fortune in terms of those resources, we are not the only country so blessed. Quite rightly, Australia has a reputation for imposing the strictest criteria when it exploits those resources to ensure that it is done not only for human safety and workplace health and safety compliance but also for compliance in terms of environmental impact. That is seen by companies as a cost—a cost they are prepared to bear. But if we then move into a situation where this legislation makes it too complicated or does not allow them to have the certainty of the lease that they need to regain their capital expenditure and make a profit—making a profit, in the end, is what this is all about—then they will simply go to the myriad other countries that are offering the opportunity to explore and exploit hydrocarbons. That is the first concern.

The second concern is a far greater one: if this process to give the producers of carbon dioxide or greenhouse gases the opportunity to geosequester is not done in such a way that they can do it with relative certainty then geosequestration of greenhouse gas emissions will not occur. We need, for a moment, to just step back from the hyperbole and the 24-hour spin and actually look at how complicated this process is going to be. We need to understand that currently coal-fired electricity is produced, depending on how old the contract is, at between $35 and $40 a megawatt hour. Gas electricity is produced at somewhere between $45 and $55, again depending on the length of the contract of the company that is producing the electricity.

To produce an electron of electricity for zero emission—and I will come back to zero emission in a moment—from a coal-fired plant requires that coal be first processed through a series of retorts and converters so that the hydrogen is split off from the coal, and the carbon dioxide and other gases are put into another stream. I will continue with the carbon dioxide stream process in a moment. The hydrogen stream is then fed into a gas turbine similar to those which you see on the wings of airplanes when you fly about. That gas turbine drives a generator, and the heat produced out of the exhaust of that turbine is used to boil water. The boiling water is then used to generate steam to drive another turbine—what is called a combined cycle gas turbine. What comes out the back of that, out of the chimney, so to speak, is steam—water. The combustion of hydrogen in oxygen produces water. This is the cleanest possible way to produce electricity, if you can do it.

I say ‘if you can do it’, because the other half of that equation is to take the CO2 exhaust from the converters, compress and liquefy it and then pipe it to where you are going to bury it. In most cases, that will not be in the same place. It will be, perhaps, 100 kilometres away or even 1,000 kilometres away. It may be that as a result of this legislation, which covers offshore, we can get a situation where there is legislation relating to onshore, to allow the geosequestration of greenhouse gas emissions in saline aquifers in depleted natural gas fields across Australia, including the Cooper Basin.

That process is incredibly expensive—converting that coal into a hydrogen gas and then firing it into a turbine. The first problem is that there is no turbine currently built that will run on pure hydrogen. They simply do not exist. Hydrogen burns at such a high temperature it would literally melt the turbine. The second thing is, as you can imagine, to compress, pipe, bury and store the CO2 is going to be very expensive. So, while those over there have committed Australia to a position where they are going to charge for carbon, they still do not have the technology that can actually save that emission. Companies are facing the very real proposition that, if they produce electricity from coal, they are simply going to have to buy credits, because there is no technology in commercial operation that allows them to bury greenhouse gas emissions, under this legislation. Companies are facing the cost of electricity consumption doubling for brown coal and probably doubling for black coal at the power station in terms of carbon price. That over time will increase. The impact that that is going to have on normal households is a 40 per cent increase in electricity at their door.

Let us see where we are up to in actually being able to use this legislation to save greenhouse gas emissions as a result of the power industry in Australia. There is one proposal in the world currently still alive, and that is the ZeroGen proposal in Central Queensland. It is a proposal for an 80-megawatt power station—a 10th of the size of most of the power stations you and I would know, Mr Deputy Speaker—that will cost, they expect, at least $2 billion. That is 10 times what it costs to build a power station under conventional coal. You then have the expense I have just outlined. The cost of this electricity will not be $45 a megawatt hour, $90 a megawatt hour or $120 a megawatt hour; it will be somewhere north of $140 a megawatt hour—almost four times what it costs now.

Those who sit opposite who think these solutions are simple need to understand the practical reality: the technology does not exist. The commercial development of this technology is still in its precommercialisation phase. There is no such project in the world at the moment. In the words of the Minister for Resources and Energy, who is putting forward this legislation, the sort of capacity to generate electricity and store the CO2 under this legislation is 15 to 20 years away—15 to 20 years of the electricity industry having to pay a carbon tax, because that is what they are confronted with, by having to buy carbon credits.

There is only one group of people who are going to pay for that: the workers and the families of Australia. Being too impatient to lower greenhouse gas emissions, trying to show the rest of the world that we can do it when no-one else can, is going to cost Australians jobs. Families in Australia are going to face a cost-of-living increase that will see their electricity price rise by at least 40 per cent, if the companies pay their carbon taxes, or, if we rely on this sort of technology, double. So, if you are a household in Queensland and you are paying somewhere between $1,200 and $2,000 a year, double that—take that out of your weekly budget on top of all the other things you have to take out of your weekly budget now as a result of the inability of this government to deliver anything they promised in the last election campaign. They said they could do something about petrol prices. They gave that up at Christmas. We knew straightaway, when we saw the Prime Minister go out and say, ‘We’ve done as much as we can.’ He has given up the battle on grocery prices, which are hurting families. He has given up the battle on water.

What this government does is it comes up with these great ideas and then does not know how to put them in place. Despite what some of my colleagues might say about them, those who sit opposite are not stupid. They understand this issue. They understand what it is going to cost. They understand that what they are doing for working families in Australia is actually preparing them for a major hit on their energy costs. It will not just be the working families in Queensland, New South Wales, Victoria, South Australia, the Northern Territory, Tasmania, Western Australia and the ACT that will pay the higher costs of this—it will be the next generation as well.

This legislation still has a number of areas which need to be addressed. I commend the House of Representatives Standing Committee on Primary Industries and Resources for their report. It is a detailed report that extends to around 120 pages and makes 19 recommendations. In the spirit of bipartisanship, I commend the Minister for Resources and Energy on his approach to this legislation. I know this is not easy legislation. I began the work on this when I was the Minister for Industry, Tourism and Resources and I commend the minister for his efforts on this. It is extraordinarily complicated. But this legislation has to work if the carbon trading scheme of those who sit opposite is not going to cripple Australia—not just for this generation but for the next generation.

We know they will not use nuclear power. We know they think that it is all right to sell uranium to our friends, to our mates, to people who are important to us and for them to use nuclear power—that is fine. But when we try and have a debate on nuclear power in Australia, we get rubbish from those opposite. We get scare campaigns, and fear and terror about nuclear power stations when most of them, if they were prepared to consider it, would realise that nuclear power stations are in fact one of the solutions as we move towards a low-emission future. But if they do not consider nuclear power then they will need to make sure that they get this legislation right in the sense that, as I said, the companies holding existing leases not only continue to explore for and exploit hydrocarbons and oil and gas in Australia but also want to use this legislation to bury CO2  These companies need to have confidence that they can access the aquifers and, more importantly, that, providing they do everything right based on the knowledge of the time, they are given financial security for having done the right thing and for having helped Australia to show the way on lowering greenhouse gas emissions.

I should mention that there will be a further report from a Senate committee, which I think will be released tomorrow and tabled in the Senate in October. These two reports highlight two issues. My understanding from the little detail that I have of the submissions to the Senate inquiry is that the issues are fairly common, but I have not had the opportunity to see that report—and quite rightly not—nor have I had the opportunity to see the minister table the amendments to this legislation in this House. He has given me an outline of the legislation, and I thank him again for that. However, until we see the amendments and are able to comment on them, the coalition reserves its right to move amendments—not in this place but in the Senate.

In the last five minutes of my time, I wish to highlight two areas. The first area refers to a recommendation by the committee, which, while it has good intent, is not going to be supported by the government. The coalition will not be supporting it either, but I think we will be working very closely with the minister to amend it so that it clarifies for companies that are exploiting hydrocarbons on a petroleum lease their ownership rights as well as their right of access to bury carbon dioxide in the strata.

I should just explain—very poorly, my grandfather would think if he were watching; he was the chief government geologist in Queensland and a far better authority on this issue than I—that, if you have a tenement which extends from the seabed, there will be a number of strata, perhaps 20 strata, underneath that, and only three or four of them will contain commercial hydrocarbon. If they are sandstone or something like, they might be able to store carbon dioxide or greenhouse gases. Those strata may also contain oil and the gas, and when that is taken out there will be more storage areas. Bass Strait is a good example of our need to give certainty to companies that are exploiting oil and gas from perhaps three or five strata. They need to be certain that they will always have access to those strata and that they will have the right not only to remove gas from them but also to reinject carbon dioxide into them after the natural gas has been taken out of that field or turned into liquefied natural gas. At the same time, we need to give coal-fired power stations in the La Trobe Valley the ability to use the vacant strata. They need to do it in such a way that they do not disturb the oil or gas production if there is a need to access the strata simultaneously for storage and extraction. They do not want to be in a situation where the company that holds the lease is able to hold them to ransom. There needs to be equity in this process.

The minister and I have talked about a process where the minister has discretion and where there is an expert board—and, dare I say in this place, where there are as few lawyers as possible. We need to have a process that is based on science and on commercial realities. We do not want a process like native title where it can go on for years and years and perhaps even for decades. We want a process that can begin and then be judged and concluded within 12 months. That is highlighted in this report and is dealt with, perhaps not in the best way but certainly in a reasonable way, in recommendation 11. This issue has not been resolved in the report and it has not been resolved in this legislation. As I said earlier, we will, through consultation, commit our support to the minister to ensure that that part of the legislation works.

The coalition also has concerns in relation to liability. In this situation, Australia needs to be a little broadminded. We are going to have a situation where gas will be taken with the best scientific advice, with the best geological advice and with the best geophysics advice. The gas will be put into an aquifer and stored. The company will be liable for that gas during the operation of that storage process and for any damage caused by that gas should it escape. How long that liability exists after the well is capped will determine how many companies will be prepared to involve themselves in geosequestration. If they hold that liability for hundreds of years, their boards of directors simply will not allow them to take that risk and there will be no gas sequestered and there will be no situation whereby we lower our greenhouse gas emissions. We need to get this right, and we pledge our support to a consultative process.

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

The Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and the Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008 before the House essentially deal with the new range of offshore titles for the transportation by pipeline and injection and storage in geological formations of carbon dioxide, at this stage being defined as a greenhouse gas. The proposed legislation deals primarily with the provision of access and property rights for greenhouse gas injection and storage activities in Commonwealth offshore waters and provides a management system for ensuring that the storage is safe and secure while balancing the rights of the new industry with those of the petroleum industry in a manner that encourages participation and, moreover, investment in both industries. The proposed legislation recognises, firstly, the need to provide greenhouse gas injection and storage proponents with the certainty they need to bring those projects forward. Secondly, it preserves the pre-existing rights of the petroleum industry as far as practicable to minimise the sovereign risk to the existing titleholders’ investment in this country and their resources and the potential resource being extracted from those leases. Finally, it is to provide insurance to the community that the CO2, the liquefied—in most cases—carbon dioxide, will be stored in a safe and secure manner.

I will turn to what the bill actually does a little later. This is an important piece of legislation for the House. You have just heard the shadow minister indicate the opposition’s approach. I understand, and it is true, that when minister he was also working on this as one of the technologies to be developed into the future. Geosequestration, the storage of gases underground, in the main is going to require the liquefication of CO2 that would be voided from the atmosphere and injected sometimes into depleted oil and gas reserves and at other times into saline aquifers where it can be kept subterranean in perpetuity.

I have often been asked—and no doubt you have too, Mr Deputy Speaker—what are the risks associated with this technology? Are we having greenhouse gases stored, whether in gas or liquid form, that could potentially escape and do irreparable damage to the environment? I think that argument was made at some stage when I was on a geosequestration inquiry and a number of conservation groups tried to extrapolate on that very notion. One thing that keeps coming back to me is that when we are talking about the storage of these gases, whether in a saline aquifer or in a depleted oil and gas reserve, we must bear in mind that we have for some time now been drilling and trying to crack various geological structures to produce the hydrocarbons that we need, the energy that we have relied upon for the last hundred years. We have had in this country considerable reserves of both gas and oil, with Bass Strait the largest field. In terms of oil production, it is declining, but it still has significant potential in gas production. And then there are those fields in the North West Shelf. We are tapping into those fields and extracting those hydrocarbons which have been captured in those geological structures for millions of years, and that is effectively what we are trying to replicate in terms of geosequestration. We are attempting to avoid the production of CO2 in the atmosphere by returning CO2 to permanent storage in those geological structures.

So this is certainly groundbreaking, if I could use that term in this respect. It is not a new technology. It is certainly one which is being used in the North Sea at the moment. Only last year I met with a number of delegates from the British parliament who were very interested in what we were doing in developing these technologies over here. They are presently trialling the injection of CO2 into the North Sea down to about 800 metres, and on that basis the pressures keep it there. Our position is that we are attempting to look at and define those areas offshore where we can use existing hydrocarbon reservoirs in order to store the CO2.

I have a bit of a background—many years back now—in working with people in both the oil and gas industries, and injecting into existing oil and gas reservoirs is something that we have been doing for some time. The reason we did it was not to store the gases particularly in places where there were depleted fields such as Barrow Island. The reason for injecting gas there was for oil production, to create gas lift. That technology has been very much front and centre of the Australian oil industry for some time. As we are not inundated with supplies of oil, we have had to use advanced methods in order to extract as best as possible those oil reserves.

It is also a very important step that we take in this legislation, and it is important for a number of different reasons. It is important to our economy. It is important to our ongoing electricity production. Presently 80 per cent of this country’s electricity is generated from coal-fired power stations. If we are going to be serious about our response to climate change—and I know there are many views about that around this House—we cannot proceed without taking steps to clean up coal.

The most polluting aspect of industry at the moment is the generation of electricity to meet Australia’s energy needs. And it is not just this country. Whilst, as I said, 80 per cent of our electricity is produced by coal-fired power stations, the world presently has 40 per cent of its overall electricity needs met by coal-fired power. While coal shares a future in terms of power generation—and must, in this country—there will be a decline in favour of renewable energies as those energies become more commercially viable, which I will go into a little later. But any solution that does not involve clean coal will not be a solution for this country at all. There will be a suite of technologies that we should embrace and encourage. We should assist the commercialisation of those technologies. But our main means of providing electricity in this country will continue to be coal-fired power.

By the way, in terms of looking at the world view, that is also the position which has been indicated by the International Energy Agency, which monitors the forecast of global energy supply and demand. The IEA estimates that the world’s future needs will primarily be met by fossil fuels, and it forecasts that coal will be, increasingly, the predominant fuel, with 44 per cent of the world’s needs being produced by coal-fired power in the year 2030. That is an increase on coal’s current share. While we, and other countries, are looking for alternatives, it is simply a fact that we do and will continue to rely on our coal industry to provide the bulk of our energy needs in this country. Therefore, it is vitally important to us, both domestically and internationally, that greenhouse gas abatement solutions go hand in hand with that reliance.

Our policy position in terms of the development and deployment of low-emission coal technologies is absolutely critical. I know the view has been made out, with all the hype that goes with elections, by one of the minor parties that we should be closing down our coal industry within a period of three years. But I—no doubt like you, Mr Deputy Speaker—do not have an ambition that my children, or my grandchildren for that matter, will have earthen floors and thatched roofs. I have the ambition that my kids will enjoy a standard of living if not equal to that which I have enjoyed then better. Simply to close down what is Australia’s biggest export industry would be ludicrous. The economic value of coal in this country is some $24 billion a year in export earnings. Coal, as I said, is Australia’s largest export earner. The coal industry itself is also the lifeblood of many of our rural and regional areas. It employs in the vicinity of 30,000 people directly, and, downstream from that, many thousands who work in related industries. Therefore coal is essential to our economic wellbeing. Low-cost coal is responsible for our standard of living and is the foundation of Australia’s energy initiatives in various industries. The success of geosequestration technology will guarantee the long-term future of the coal industry in this country, the preservation of those jobs and, more importantly, the provision of low-cost power to the Australian community.

If we were to stop exporting coal, or if we were to simply move away from coal as a technology, then countries like China and India—and no-one in this place doubts that we are relying on their trade to ensure the standard of living in this country—would simply meet their demands elsewhere. Therefore, any response to climate change pressures must take account of the need to maintain reliable energy supplies not only by making fossil fuels cleaner but also by embracing our ability to explore for new coal reserves and by developing our new coal technology industries.

The government recognises that clean coal technologies are not simply going to be the answer. We know the value of coal and the contribution it makes to our economy. But we know we have to move to embrace, more and more, the renewable energy technologies, such as wind, solar, wave—and I visited, not all that long ago, a very innovative wave technology plant at Fremantle—and geothermal. I was very pleased to see, the other day, the minister contribute $50 million to the drilling program for geothermal or hot rocks technology. That was the first grant made under the Renewable Energy Fund. That is indicative of this government’s commitment to develop these technologies. They will provide, together with coal, a suite of technologies designed to lower Australia’s greenhouse gas footprint without damaging our economy.

I know a lot has been said and will continue to be said about the price of a barrel of oil. I do not think anyone seriously thinks that the price is going to decline rapidly, as world oil supplies are in decline. Many academics have laid out the argument that we have already hit peak oil and that, therefore, it is going to take more time and expense to recover remaining reserves. Having said all that, this country is still an energy-rich nation. We have 800 years supply of brown coal in known reserves. We have 350 years supply of black coal. If we do not drill another hole out there, we have, we know, 130 years supply of natural gas at our current usage. That is taking into account the gas that we are sending to China, India, Japan and now South Korea, as well as our domestic use. We have 130 years if we do not find any more.

We are an energy-rich nation but, for us to benefit from that, we must be able to develop those technologies that make that energy clean in terms of our greenhouse gas emissions. Those technologies need to be encouraged, but we do know what we can do with geosequestration. We can now start taking the carbon, we can liquefy that carbon and we can inject that carbon into permanent storage underground. This is a new and emerging industry that this government is proud to be a part of. Geosequestration is a key part of the effort to establish our climate change credentials and maintain our position in the industry and in trade.

I was particularly proud of Senator Wong’s green paper on the Carbon Pollution Reduction Scheme, which developed a scheme to be implemented by 2010. That will place a cost on carbon and will encourage industries such as those that are generating electricity to develop and deploy low-emission technologies over time. They are things which are going to be crucial for developing this industry because there will be a cost imperative. If people think there is no cost, they will just continue polluting. There is a cost, and it will be a real cost. That will be the incentive for carbon-generating industries to look at how those industries can be developed with a view to lowering their greenhouse emissions.

It was also encouraging to go into the last election with Labor’s $500 million National Low Emissions Coal Fund. That was backed by the industry in the COAL21 initiative, which produced another $1 billion from the industry to also look at developing clean coal technologies. That is a very worthy coalition between government and the industry in looking at development of these technologies. While I have indicated that we are the world leader in coal exports, at the moment we are not the world leader in developing technologies for clean coal. If we are going to maintain our position in trade, we need to have that hand-in-hand with our development of technology itself. Therefore, the Carbon Pollution Reduction Scheme will be the incentive to establish mechanisms to ensure that these new coal abatement schemes are developed in this country. We should be the world leader in that.

I congratulate the minister on this piece of legislation and on the leadership that he has shown in this industry. I, too, join in supporting the report on greenhouse gas emissions brought down by the Standing Committee on Primary Industries and Resources. I also note that in this bill the minister has accepted the views of the committee on 16 out of 19 recommendations. (Time expired)

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

As has been indicated to the House by our shadow minister, the opposition supports the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and related bills as necessary steps in a process which, I think, is probably many years away and should not be given any form of priority compared to other options for Australia to address greenhouse emissions and their perceived effect on the climate of this nation. I would like to repeat, nevertheless, that if we were to evacuate Australia in the future years there would be no effect on the climate of Australia by that action because our contribution—at 1.4 per cent—is so little that, unless there is complementary action by the so-called big emitters, the climate of Australia will be dictated by their actions. Every time I fly I am reminded—as you might be, Deputy Speaker Georganas, as you come from South Australia—that the air blowing over Australia moves at 150 to 200 kilometres an hour and does not stop on the borders.

Having put that position forward, I still believe that Australia has a responsibility to meet international obligations. Before my speech is done I will explain how I would do it without sending anybody broke and without reducing the contribution that coal-fired generation makes to this country without very expensive and risky carbon sequestration as proposed under this legislation. Furthermore, one might have a look at the legislative intent. One might even ask oneself how many trees this legislation cost and what emissions were associated with its presentation. It typifies an approach emanating from this government, which is to bring in some legislation and handball the responsibility to the private sector—to bring in an emissions trading scheme, rip $11 billion off the private sector and say, ‘Well, if you’ve got any money left, you’d better fix the problem.’ That is going to be a significant contributor to reducing greenhouse emissions in Australia because a lot of companies will pack up and go. They will emit no longer. Groups contemplating investment in Australia will say, ‘Why would I bother?’

Liz Bossley, a leading emissions trading expert—imported, I might add, by a finance dealing company, and we have seen how helpful they are to the world economy in recent times—was quoted in the Australian on 12 August as having made a couple of salient points. She said, ‘Of course we need an emissions trading scheme. We the finance sector are going to make a lot of money out of it. But you had better get on with it, because if you think you are going to wait for India, China and the US to come in with caps, they’re not going to do it.’ She also made the point that a $20-a-tonne entry rate is no incentive to those who want to stay to change their habits.

A committee of which I am a member received a joint submission from the Australian Conservation Foundation and the Australian Council of Social Service telling us that if the green paper proposals were implemented the average household’s electricity would increase by between $250 and $300 a year, and a lot of poor people would have to be subsidised. That is what the submission said, in black and white. If we give them the money back, will the kids turn the lights out? I do not think so. We must look at the effectiveness of these schemes.

The point I want to make is simply that initiatives must be practical in nature. Initiatives of past governments come to mind. I will name a Labor initiative first: the Snowy scheme. Sir Charles Court’s initiative is the only reason that Australia now profits so much from the production of liquefied natural gas on the North West Shelf. That area would still be undeveloped if the Charles Court government had not taken the initiative to buy more gas than Western Australians could use at the time and to build the pipeline infrastructure to get it to the market. There is a role for government in doing these things. However, it is a hell of a lot different from expending a great deal of Public Service time producing big books that are a substitute for action.

I am a regular attendee at CSIRO breakfast briefings. I do not think I have missed one. Geosequestration was talked about at one of those briefings. It was said that the science is not very difficult and that there are all sorts of options, but they have yet to get the energy cost below 20 per cent of the output of the relevant power station. We would have to burn 20 per cent more coal to get back to where we started. I would not make that a high priority issue for Australia, and I will explain why.

I wondered why all that energy was required, so I consulted the library. I tried to chase up a briefing given by the office of the opposition shadow spokesman when he was the minister about some aspects of these proposals. One approach is to pump in a heap of oxygen while the coal is being burnt to get lower emissions. There is no argument about that. But who makes the oxygen? I am a bit of a welder and I know that you buy oxygen in bottles, and it costs plenty. There is an energy cost in producing that oxygen.

I established from my research that carbon dioxide captured from power stations usually needs to be transported to the place where it will be stored. That could be under the ocean. That usually involves compressing the carbon dioxide to what is called a ‘super critical state’. That is at above a pressure of 73 atmospheres, which is 73 times more pressure than we feel at sea level from atmospheric pressure and above 31.1 degrees Celsius. Clearly, this process uses energy, as does the transportation. Of course, someone has to build a pipeline that can contain 73 atmospheres, because the only other thing that keeps the gas inside the pipe is the outside pressure. While it is in the ground, the only thing keeping it there is the density of the surrounding soil materials. That is one atmosphere versus 73.

My research went a little further. I read about a place called Lake Nyos in Cameroon. I quote:

CO2 is an asphyxiant …

It is not poisonous, but in concentrations you do not get enough oxygen and you die. The quote continues:

… at high concentrations and is denser than air so may not immediately disperse. In a well-publicised incident at Lake Nyos in Cameroon in 1986, a large volume of naturally occurring CO2 came up suddenly from the lake floor and, being heavier than air, accumulated in the surrounding region, resulting in about 1700 deaths.

There has been significant publicity recently about some people who bought land on top of an old tip. The methane is now bubbling up as a result of the decomposition of the refuse put in the tip and those people are now at some risk as a consequence. We are not talking about the natural pressure of decomposition; we are talking about 73 atmospheres.

The quote continues. It says that model studies of CO2 storage in reservoirs in the North Sea suggest that in the absence of well failure or tectonic movement—that is, if those two things do not happen—it is pretty safe. But some people went drilling in Indonesia recently and now, because of some mistake, thousands of hectares of land are covered with red hot mud. It will be okay—provided that you do not have well failure and tectonic movement. If all the gas from the Hunter Valley had been buried under Newcastle, presumably it would have all come back when they had the earthquake. I do not want to say any more about that, other than to point out that this is difficult and highly energy intensive. Whilst there may be a reason for research—for the purpose of making our coal more acceptable as an export product—we in Australia should take an entirely different view.

I have grave doubts that the best response for Australia can occur, because the government minister is working assiduously to deny that resource to Australia. The Minister for the Environment, Heritage and the Arts, Mr Garrett, wants to put a World Heritage order over the West Kimberley. There is 6,000 kilometres of coastline in the Kimberley—because it is very fjord-like—but the minister and the previous state government in WA could not find 100 hectares along that coastline where the INPEX people could put in an LNG plant which would add significantly to our GDP and the revenues of Western Australia. So INPEX are considering putting a pipeline undersea to Darwin, where they are going to get a better deal. But what level of emissions would be produced in the manufacture of some 1,000 kilometres of steel pipe? It would take up a year’s production at one of the major steel factories in Japan. Why would you do that? It is all because ‘the Crocodile Hunter’ thinks it is nice for him to go and look at some isolated points of interest—nice waterfalls and things of that nature.

According to the World Energy Council and the CSIRO, within that 6,000 kilometres of coastline and those inlets there is the potential to generate six times the power we get from Australia’s installed generating capacity of all sorts. From that resource we could produce six times the power generated by our existing capacity—and it would be 100 per cent emission free. How does that compare with other renewables? It would be perpetual—as long as the moon keeps going around the earth—and as predictable as the moon. That is a very fundamental issue when you have to back up wind generation or, to a lesser degree, solar generation with coal-fired stations. Because of the lack of responsiveness of wind and solar, the operator of the coal-fired station will say: ‘The total demand in my network is X. I’ll maintain steam pressure to deliver X because I can’t trust those wind generators. I don’t know when they’ll pause in their job for a minute.’ So we are burning the same amount of coal—people measure the amount of electricity that flows into the system, but that is meaningless. All renewable energy requires a backup. But if that operator were delivering to a network that was also being supplied by a substantial amount of tidal energy, he could take his fishing box to work with him—if I can use a silly example—to work out the contribution of his power station at any time in the preceding 100 years because tides are that predictable.

The World Energy Council have been around since 1923. They are part of Oxford University. They have published a table of potential tidal sites. I might add that the British government are now staring down the greenies over the Severn Estuary because it could produce 20 per cent of their power. That table identified just two inlets in the Kimberleys. On their calculations, those sites—just two sites—could add 120 per cent of WA’s presently installed generating capacity. A group of us, with the member for Kalgoorlie, flew over that area last week and had a look at what we can do.

There is new generating technology that is much improved on what the French have been doing for 40 years. With an average-sized Australian power station—about 240 megawatts—this technology provides the opportunity to put in new generating capacity which would inhibit the movement of fish and other marine species only to the extent that a revolving door at a hotel would impede a human being’s process. That technology is available and it has a tick from the David Suzuki Foundation. It is highly suitable for the Kimberleys. Furthermore, there is now an HVDC transmission system in Africa that delivers power over 1,700 kilometres away from where it is generated—and I have advice from Asea Brown Boveri Australia, ABB, one of the greatest electrical transmission companies in the world, that 2,000 kilometres would be okay.

So with HVDC transmission you can transmit power from the tidal regions of the Kimberleys to Perth. You could transmit power from Perth to Port Augusta—or, more particularly, Roxby Downs—as a starting point and interconnect to the eastern states network. That is 2,000 kilometres, and that would be fine. There are very low line losses with high-voltage DC. Furthermore, it is bipolar—as now operates in Bass Strait. There is an HVDC line in Bass Strait. They feed brown coal power, which the member for Werriwa talked about—the cheapest electricity in Australia—into Tasmania as baseload power and, when the demand starts to pick up, they return hydro power, which they have been conserving, back into Victoria and the network. That brown coal power could be the backup—right up into the Kimberleys. What is more, you could electrify the Pilbara rail system—and how much would you save in emissions doing that?

The Parliamentary Secretary for Defence Procurement, who is at the table and whom I think has an interest in people’s employment, might bother to go to my website, www.wilsontuckey.com.au, and have a look at the proposal. He will see that right at the end of the proposal I have costed it, on the best available advice. Putting a 30 per cent contingency figure on it, it is $10 billion. Ten billion dollars was laid on the table in this place in one day to save the Murray, although it has not done much to achieve it.

Government would be the logical body to spend that $10 billion. Who built all the original carbon-spewing powerhouses? Government. Who built the Snowy Mountains scheme? Government. Instead of bringing loads of paper into this place and trying to devise a scheme that taxes people into leaving the country, why not spend 10 billion bucks and solve the problem? You do not have to geosequester to meet your international commitments. You say to the world, ‘We are progressing towards a fifty-fifty contribution, that being 50 per cent tidal’—and remember there is six times the capacity up there—‘and 50 per cent coal.’ You need the two. You make them partners. You take over no-one’s job, you do not tax them into submission and you meet your international requirement in a very real way—no funny business, no pumping into the ground over there something that is leaking out over here. Why don’t we get onto that? We talk about bipartisanship. Well, I have not kept this a secret for the next election. The PowerPoint presentation is on my website for people to see, and every member of the coalition has it in printed form. The energy up there is huge. It has been recognised by international bodies, but the Australian government do not want to know it is there and the minister wants to shut it down and let Geneva decide what should be done about it. (Time expired)

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

One of the bills now before the House, the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, will enable carbon dioxide to be stored safely and securely in geological storage formations deep underground in Australian offshore waters under Commonwealth jurisdiction. The bill’s amendments will make available storage formations in offshore waters that will have the potential to securely store hundreds of millions of tonnes of carbon dioxide for many thousands of years. This represents a substantial quantity of Australian greenhouse gas emissions. The bill will achieve this by allowing exploration for greenhouse gas injection and storage sites through the release of areas in Commonwealth offshore waters. The bill will provide an underlying framework within which detailed regulations will be drafted specific to greenhouse gas injection and storage, which will provide a management system that ensures storage is safe and secure. Environmental concerns will continue to be covered through legislation such as the Environment Protection and Biodiversity Conservation Act 1999 and the Offshore Petroleum Act management of the environment regulations.

Carbon dioxide capture and geological storage—often referred to these days as CCS, which is easier to pronounce than ‘geosequestration’—is an important means by which carbon dioxide and other greenhouse gas emissions can be prevented from being released into the atmosphere. The importance of CCS has been demonstrated by the Australian upstream oil and gas industry, which for some time has undertaken successful carbon storage in this country. The Australian Petroleum Production and Exploration Association collectively accounts for companies that produce around 98 per cent of Australia’s oil and gas. It is these companies and the technology and know-how in carbon storage of Australia’s oil and gas industry that will be the key to Australia’s realising its ambitions to be a world leader in carbon capture and storage. For decades this industry has been injecting CO2 into the ground all around the world as a means for enhancing the recovery of hydrocarbons.

The oil and gas industry has considerable expertise in utilising and developing the technologies that are required for CCS both in Australia and on the international stage. In Australia this has been driven through the former Australian Petroleum Cooperative Research Centre, under its GEODISC program, and the current Cooperative Research Centre for Greenhouse Gas Technologies, which is often referred to as the CO2CRC. It is Australia’s proposed Gorgon LNG project that is set to become the world’s largest commercial carbon sequestration project. It is the Australian gas company Santos, in conjunction with Australian companies Beach Petroleum and Origin Energy, that is progressing the commercial Moomba carbon storage project, a project that could eventually store up to 20 megatonnes of CO2-equivalent per year and one billion tonnes of it over the life of the project. It is the Browse LNG project joint venture partners who are currently examining a range of geosequestration options in north-west Western Australia. Anzon is also planning, as part of the innovative development of the Basker Manta Gummy petroleum project in the Gippsland Basin, to make available the infrastructure, after depletion, for storage of carbon captured from Latrobe Valley coal-fired power stations. So it is the Australian gas production industry that is one of the keys to the ultimate success of carbon sequestration in this country. This is a very important reason why we must ensure that our climate change policies enable the gas industry to help us realise our ambitions for carbon capture and storage.

As I have mentioned in the parliament before, we have around 140 trillion cubic feet of offshore gas reserves. Australia’s natural gas reserves have the unique potential, in both the short term and the long term, to significantly reduce greenhouse gas emissions domestically through greater penetration of natural gas in the domestic market, and also in the Asia-Pacific region through increased LNG exports. The vast reserves of natural gas located in close proximity to growing Asia-Pacific markets make Australia well placed to positively assist in meeting the global climate change challenge while substantially contributing to Australia’s economic growth.

On latest life cycle figures, for every tonne of greenhouse gas emissions associated with Australia’s production of LNG, four tonnes are avoided in Japan and between 5½ and 9½ tonnes are avoided in China, making the LNG industry one of Australia’s key clean global contributors. Australia’s vast natural gas resources have a vital role to play in reducing greenhouse gas emissions in the region. Clean-burning natural gas provides a vital stepping stone on the path to low-emission economies. I am told that every extra tonne of cooled gas that the LNG industry can export to China will help avoid global greenhouse emissions of up to 6.8 tonnes in net terms. In the region in general, the growth of this industry would assist in reducing greenhouse gases to the tune of 120 million tonnes.

Clearly, there is an opportunity for Australia to generate significant additional national economic, environmental and social benefits from its substantial natural gas reserves, and this indeed needs to include the creation of a less carbon intensive national electricity market. Natural gas fired power stations produce 50 to 70 per cent less greenhouse gas emissions than equivalent coal-fired power stations and can use as little as one per cent of the water. This creates an enormous opportunity to respond to the growing public demand for cleaner energy. An expansion in the use of gas in resource processing could reduce the carbon intensity of the resource-processing sector. Furthermore, natural gas as an alternative transport fuel would enhance supply reliability and reduce our exposure to oil shocks, giving us greater energy independence. The lower carbon intensity of gas as a transport fuel will help diminish the incidence of respiratory illness, asthma and the like, and, in addition to its more greenhouse-friendly nature, natural gas represents a cost competitive energy source. This is particularly so when you consider the generation costs of natural gas compared to other energy generation technologies.

The Australian upstream oil and gas industry has set itself a number of growth targets over the next decade, which include: first, increasing exports to 50 to 60 million tonnes per year from the current volume of 15½ million tonnes per year; second, doubling the use of natural gas use in resource processing; and, third, a more competitive electricity market where 70 per cent of all new electricity generation capacity installed in Australia over the next decade is gas-fired. If these targets are met, I am told, global emissions avoided could total at least 180 million tonnes of CO2 equivalent per year by 2017. Reaching these targets would also have significant economic and social benefits for Australia, with economic modelling suggesting: first, an increase of between $13 billion and $55 billion in GDP in net present value terms, which is equivalent to adding between 0.24 and 0.31 percentage points to Australian GDP growth in 2017; second, an increase in real consumption of between $500 million and $21 billion in net present value terms over the period to 2017; third, an additional $10 billion a year of tax revenue; fourth, an increase in Australian exports, leading to an improvement in our trade balance of $1.6 billion by 2017; fifth, increased employment in the oil and gas sector and service industries; sixth, the diversification of Australia’s energy economy with increased penetration of gas in the domestic manufacturing industry; and, finally, a major boost to remote regional economies, particularly in Western Australia, Queensland and the Northern Territory.

Given the significant and sustained greenhouse and broader environmental and economic benefits that flow directly from a strong, vibrant and growing Australian upstream oil and gas industry, it is important that Australia’s greenhouse policy response encourages the further use of natural gas both domestically and in the region. The need for prompt action in addressing global warming is apparent, and the bills before the House make a significant contribution in promoting and developing one of the available methods of reducing greenhouse gas emissions. The Labor government recognises that new clean energy technologies, including both fossil fuels and renewable energy sources, are a key to sustainable climate change solution. The government is providing leadership and policies that reduce or eliminate greenhouse gas emissions but at the same time seek to ensure that we continue to prosper from our abundant energy reserves. In this context and as a fossil fuel dependent economy, the Australian government has a pivotal role to play in driving technology outcomes that reduce or eliminate greenhouse gas emissions, and a key part of this effort is the need to establish a framework to allow for the capture and geological storage of greenhouse gases emitted from fossil fuel use both domestically and internationally.

This bill indicates yet again that there is only one side of the House which is serious about tackling climate change. Whether you are talking about the Kyoto protocol and our international efforts, whether you are talking about emissions trading and carbon trading, whether you are talking about support for renewable energy or whether you are talking about carbon capture and storage, as we on this side of the House are, the government has been fair dinkum about tackling global warming and climate change. The other side of the House has had to be dragged kicking and screaming to even understand the nature of the problem. The former Leader of the Opposition, for whom in many respects I have a lot of sympathy, was of the view that Australia should not be prepared to engage in carbon trading unless and until the rest of the world was doing the same thing. As I have said before, this reminds me of some kind of student frat house where the residents of the house say, ‘I’m not going to clean up my room until everyone else does theirs.’ No-one does the dishes, no-one puts out the garbage, no-one does the laundry and pretty soon the house becomes a pigsty. Or you might like to think of a boat headed for Niagara Falls being rowed by a hundred canoeists. They work out that they are headed for Niagara Falls, but each of them keeps on rowing, saying, ‘I’m not going to change direction until everyone else does.’ That is a foolish approach.

We need to understand that climate change is a major problem affecting us now and that all the scientific evidence for Australia, as well as for the rest of the world, is of very severe impacts in the form of drought, bushfires, loss of snow cover, increased vulnerability to tropical diseases, impacts on the Great Barrier Reef and Kakadu—you name it! There is scientific evidence on what is happening with the North Pole—the Arctic melt during the summer months and the pressures that that is placing on the Greenland ice sheet—and the melting of the West Antarctic ice sheet. All of these things suggest a crisis which needs to be handled with the kind of urgency with which we approached the Second World War. But the other side of politics has no understanding of this and simply wants to talk about what the costs will be. This issue has been measured by well-respected economists, such as Nicholas Stern and Ross Garnaut, who have informed us that the costs of doing nothing will be greater than the costs of acting.

A few days ago the Australian Food and Grocery Council put out some information expressing concern that a carbon trading scheme could lead to an increase in the price of food. But everyone needs to understand that if we do not act to resolve this problem our water supplies in southern Australia, for example, will diminish. There is no doubt that reduced water supplies will act to increase the price of food. We need to understand what the costs of failure to act will be.

I support this legislation. It establishes access and property rights for the safe and secure injection and storage of greenhouse gases into stable, subsurface geological reservoirs in Commonwealth waters more than three nautical miles offshore. It will provide project developers with the certainty required to commit to major low-emission energy projects involving carbon capture and storage. It will allow for the establishment of an effective regulatory framework to ensure that projects meet health, safety and environmental requirements. It is good, well thought through legislation and I commend it to the House.

Peter Lindsay (Herbert, Liberal Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

The question of what is going on in the environment is not as simple as some would make it out to be. It is highly complex. Out in the Australian heartland there is goodwill on most people’s part and a recognition that we as a country have to show leadership in relation to the way ahead in reducing greenhouse gas emissions. But there is also a realisation that we have to be careful about damaging our own country for no gain. That is the trade-off that the parliament will wrestle with as this matter proceeds. There are some who say that if Australia cut off all of its greenhouse gas tomorrow, if the emission of every last tonne of greenhouse gas were stopped tomorrow, it would make no difference to the dire consequences that are facing the world—and there is probably some truth in that. Others involved in the debate would say: ‘Well, somebody has to show some leadership somewhere. We have to lead the world.’ To China’s credit, they are doing more these days than most people give them credit for in relation to meeting their responsibilities. However, I do not think the same can be said about India, the United States or Japan. So it may well be that we can join with China in leading the world in addressing these particular issues, and it is vital that we do. The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 is part of our contribution to what we as a country may be able to do in facing up to these particular issues.

On Saturday I was on Magnetic Island, in the Great Barrier Reef World Heritage listed area. I represent Magnetic Island and, of course, the city of Townsville in this parliament. The Minister for the Environment, Heritage and the Arts was there to open a Solar Cities project. He said, as the member for Wills just said, that the former government did not do anything in relation to the environment. Here he was opening the first Solar Cities project in Queensland, which was a Howard government initiative. We will have a complete solar suburb on Magnetic Island, a great initiative. The bill before the House today was an initiative of the Howard government.

The bill was developed in 2005, when we were in government, and certainly it carries our support, as it will go through the parliament in this sitting. No-one should underestimate the Howard government or say that it was asleep at the wheel in relation to climate change. We committed $10 billion to the Murray-Darling system, where the Australian government was to take over the comprehensive management of that system. But what have we now seen the Labor Party do? Basically give it back to the states, and we are back to where we were. It is a shame that that has happened.

Under the provisions of this act, we will see authorisation for the storage of greenhouse gas substances—that is a quaint bureaucratic way of referring to what we are talking about—which, in essence, means the capture of carbon dioxide, together with any substances incidentally derived from the capture, injection and storage process.

In looking at geosequestration in Australia we do have a Cooperative Research Centre for Greenhouse Gas Technologies, with the quaint name CO2CRC, which is conducting the first Australian CO2 geosequestration storage project in western Victoria in the Otway Basin. Its aim is to demonstrate the effectiveness of CO2 storage underground. All of us should support geosequestration with a caveat. The caveat comes from me, which I believe will also have the support of the government.

There have been proposals to have geosequestration underneath the Great Barrier Reef Marine Park. It is interesting that the member for Capricornia is here because it is that area under the park where this gas is proposed to be sequestered. I have said very publicly, and I believe that the government has agreed with me, that we should in fact exclude the Great Barrier Reef Marine Park from sequestration because of the other issues it would attract if we were to do that. One other issue is oil drilling on the Barrier Reef. Both sides of parliament have been totally opposed to allowing that course of action. I am advised that successful sequestration projects have already been undertaken in Norway, Algeria and the USA. In Australia, Gorgon are well advanced in their proposal to sequester deep below adjacent Barrow Island greenhouse gases from their North West Shelf gas project.

Some people are concerned that CO2 stored underground could become unstable, could leak out slowly or could leak out rapidly following earth movements. This could result in the asphyxiation of people and animals. However, I observe that there are many places in the earth’s crust where oil, gas and CO2 have been safely stored for millions of years. Geosequestration aims to emulate these natural traps.

I have the benefit of some professional advice on this—my son is a geologist and he has a PhD. In speaking about this he is quite convinced, in his professional opinion, that the evidence is there to trust this process. He says it is extremely unlikely that CO2 will leak to the surface from a geosequestration site because the storage location is deep and overlain by impermeable geological formations that act as a seal. Storage sites, of course, will also be monitored to check the location and behaviour of the CO2.

It is vital that we reduce greenhouse gas emissions in Australia, and this is one of the ways that we can do that. In Australia, particularly in Queensland, coal is reliable, plentiful and relatively cheap. Its supporters argue that we are likely to remain dependent on it for our energy needs for the foreseeable future. Through innovative projects to develop clean technologies—and the development of nominated carbon capture and storage is one of the technology options—we can reduce greenhouse gas emissions. The Intergovernmental Panel on Climate Change estimated that a power plant with a carbon capture system could reduce CO2 emissions by 80 to 90 per cent compared to a plant without a carbon capture system. However, CCS is expensive and unproven technology. If it works, the IPCC estimates that it will add 25 to 50 per cent to the cost of coal-fired electricity. But that is the cost that the community has to bear and it is the cost that the member for Wills referred to in his contribution to the parliament.

I want the parliament to know and understand that I support this technology. In practice, it will not be put into place in Australia for perhaps another 15 or 20 years, but we have to have the framework there. Through this bill, the Australian parliament is making that framework available for use in Australia. Hopefully, the rest of the world will see the leadership that we are showing as a country and take up the challenges that we are facing wherever those challenges may be. I wish to indicate my support for this bill.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 will amend the Offshore Petroleum Act 2006 to establish a system of offshore titles similar to the offshore petroleum titles that already exist under the principal act. The bill will authorise the transportation by pipeline of greenhouse gas substances and their injection and storage in deep geological formations under the seabed. The bill will also make changes to the existing regime of petroleum titles that are needed in order to accommodate the new kinds of activities being authorised by the act. Petroleum and greenhouse gas operations will, in many respects, be similar. The resources of the seabed and subsoils that the two categories of title holders will seek to exploit have much in common. Each form of activity will have the potential to impact on the other, both beneficially and detrimentally. The bill therefore provides for the regulatory decisions made in respect of each form of activity to take into account the potential impacts on the other. This is something that is absolutely necessary in fighting climate change.

I welcome the support that the member for Herbert just made in his contribution. Clearly, he believes in climate change. Notwithstanding his contribution, there is a clear demarcation between the Labor side of politics and the benches of the climate change sceptics who sit opposite us. It was one of the defining issues of difference in the 2007 election campaign. We all know who the Australian people trusted with these and the other important challenges that we face.

We do not know how the new jockey of the Liberal Party horse will be on these new, important reforms. We know what he leaked from cabinet last year when in government. Media reports show that senior figures have said, ‘The young, mad Right have gone with Turnbull.’ The question that we have here today is: will the young, mad Right, so decisive in the election of the member for Wentworth and who are lock, stock and barrel members of the climate change sceptics club, be the ones writing the opposition’s new policy in relation to this area? This is an area that is too important for us to get wrong. It is too important to have those who want to bury their heads in the sand and take the ostrich mentality in relation to climate change making any contribution to what we need to do to make sure that we look after our planet.

I want to talk a little bit about the effects of climate change on the beautiful electorate of Dobell. The electorate of Dobell—clearly the most beautiful electorate in all of Australia—while blessed with many natural beauties, is one that has a very fragile environment that is susceptible to climate change. Rising sea levels, the predicted increase in experiences of east coast lows—bringing more extreme storm events—increased bushfire activity and water shortages have the potential to cause major problems for my electorate. Dobell extends along the coast from just north of the Terrigal Lagoon through to Norah Head. Areas such as the Wamberal beachfronts and North Entrance have been identified as particularly vulnerable to rising sea levels and greater storm activity. Both suburbs have recently experienced severe beach erosion that has eroded the yards of private properties and destroyed fences, decking et cetera as backyards of houses have fallen away into the beaches. As sea levels rise and storm events and surges become more severe and potentially more frequent, it would be not unexpected to lose a number of homes within these areas.

At Norah Head, coastal erosion has forced the local council to issue orders to residents to dismantle structures from backyards of properties to reduce pressure on the seaward slope and assist in the prevention of major land slippage. Heavy rain plus wave energy impact on the toe of this slope has placed a number of homes in the unenviable position of currently having no backyard—plus the potential of the homes being lost to the sea. This is a real threat that is happening right now because of the changes in our environment and climate change. Wyong Shire Council and the state government have both committed extensive amounts of money to try to minimise the rate of erosion of this slope at Norah Head. The reality is that these works might not prevent the loss of these properties if a severe storm were to impact on this part of the Dobell coastline again, as storms have done so frequently in the past.

This is a popular recreation area for locals and tourists alike. Ocean baths provide safe swimming, and the area is popular with recreational fisher men and women. The Norah Head Lighthouse and the annual whale migrations attract many tourists to the area—understandably so. On the June long weekend of 2007 a storm associated with an east coast low caused some local severe flooding around Tuggerah Lake and Wamberal Lagoon. Over a thousand people were forced to leave their homes, and much of the area was without power for up to a week. Sewerage and stormwater facilities were unable to cope when severe flooding occurred. I would like to put on the record thanks to David Harris, the state member for Wyong, for his tireless work in relation to this and the work that he did with the local community. Just recently, Mr Harris and I conducted a ‘Thank your local hero’ barbecue at Chittaway Bay, where we were able to thank the ordinary citizens who had been out there helping their neighbours get out of the flood that occurred in June 2007. Since then we have had three more major storm events. They did not cause flooding as extensive as on that June long weekend; nonetheless there was serious flooding in the area.

A research paper entitled The ecological history of Tuggerah Lakes: what the newspapers said, by the CSIRO in October 1998, detailed a long history of flooding, with damage to roads and bridges and the occasional loss of life. Extensive flood mitigation has been carried out, but climate change makes some of the supposed benefits of much of this work problematic. Areas around Wamberal Lagoon and North Entrance have already been identified as areas at increased risk through rising sea levels, storm surges and changes to wave direction through height and intensity of those waves. These areas have been adversely affected in the past by extreme weather events. Much of the development along these particular areas was built prior to current coastal management strategies and, although local government authorities now carefully constrain the development that occurs along these beach areas, the market price of these properties remains very high. Obviously, people are going to lose as their backyards continue to be washed away into the ocean.

An environmental impact study for Gosford City Council in 2003 stated:

Coastal investigations show that the foreshores of the Terrigal/Wamberal embayment have experienced a gradual recession over at least the past fifty years, interspersed with more severe episodes of storm erosion. The identified shoreline recession is ongoing and is gradually exposing the foredune (and development thereon) to more frequent storm erosion events. This has been dramatically demonstrated during the storms in 1974 and again in 1978.

Then, many houses along the Wamberal foreshore fell into the sea. It is possible that a breakwater or similar structure at North Entrance may lessen the severity of storm surges on the vulnerable areas of North Entrance and allow for the opening of the channel from the lakes to the ocean during flood events, but a comprehensive study would need to be performed. I am happy to say that this was an election promise that the Rudd government made in relation to this area, and it was one that I campaigned very heavily on during the election, to see whether a seawall would assist in terms of the effects that climate change is having on the area. Another important promise that was made during the election was to commit $20 million to looking at how we can actively improve the run-off areas into Tuggerah Lake so that, when storms occur and when sea surges happen, we can assist in a better way and make sure that damage is ameliorated, that homes are not affected and that the health of the lake is at its best.

The demographics of Dobell make disaster planning very problematic. There is a large commuter population, with over 30,000 working people travelling to Sydney or Newcastle on a daily basis. There is a large elderly population there too, and this again presents problems in terms of how these issues are managed. The population of Dobell is concentrated in urban villages separated by various waterways. There is pressure to supply more land for housing developments to ease population increases of the Greater Sydney region. It is estimated that there will be an additional 75,000 people moving into the area in the next 20 years. This increase in population is one that we welcome on the Central Coast, but it also comes with the difficulty that we need to plan around a fragile environment that is very susceptible to climate change. Local industries such as tourism and hospitality would be negatively impacted on by greater frequency of extreme weather events caused by global warming, and popular tourist destinations such as Wamberal and The Entrance would be adversely affected by rising sea levels.

Dobell is also vulnerable to increases in bushfire frequency and intensity. In 1994 Central Coast residents were isolated for several days when fire closed rail and road transport links. Intermittent closures occur nearly every bushfire season. In the west, large tracts of wilderness area abut sparsely populated river valleys and are frequently subject to uncontrollable bushfires. Again, this is all evidence of the effect that climate change is having in my electorate and why we need to take concrete steps to address these sorts of issues. On the eastern side of the highway, urban villages are surrounded by bushland and, although there are well-designed bushfire plans, the sort of bushfire weather activity seen in other areas of Australia over the last few years could have a devastating impact upon the residents and environment of Dobell.

Climate change represents one of the greatest threats to the future prosperity and security of Australia and its region. It is critical for Australia to implement long-term measures to address the environmental and economic challenges of climate change and to engage constructively with global efforts to reduce greenhouse gas emissions. The long-term prosperity and wellbeing of Australia depends on our sustaining our environment and tackling critical challenges such as addressing water shortages, protecting threatened species and reducing carbon emissions. Labor believe that establishing a long-term target for greenhouse gas emission reductions provides certainty for energy companies and helps industry make informed decisions about which technologies they should be investing in—allowing the economy and society to adjust in a reasonable time frame. We have already ratified the Kyoto protocol and join with 167 other countries in the effort to avoid dangerous climate change.

This side of the House believes a national emissions trading scheme will provide a long-term incentive to cut emissions further and act as a mechanism for trading, so that energy is allocated efficiently in the economy and greater private investment in clean energy technology is encouraged. The government believes that adequate funding of research into the science of climate change, emission reduction technologies and adaptation management is vital if Australia is to meet the challenges of climate change. We will fund research into renewable energy and support research, development and demonstration aimed at technologies to reduce emissions from fossil fuels, including cleaner coal and gas, and technologies to capture and store carbon dioxide to prevent its release into the atmosphere. We will work with state, territory and local governments to ensure that five-star energy efficiency provisions are mandatory for new homes. The government will promote more sustainable management of Australia’s vegetation cover and an end to broadscale clearing. The government is committed to cooperation between states, territories and landholders to achieve a net expansion of vegetation cover and reductions in emissions related to land use change.

A Clean Energy Plan to help Australian consumers and Australian businesses work together to tackle climate change is something that this government is doing. The Clean Energy Plan, which Labor promised at the last election, will help ensure all Australians reap the benefits of the latest clean energy supplies and energy-saving technologies. Expanding the cost-effectiveness of clean energy will be critical to meeting federal Labor’s science based target to cut greenhouse gas emissions by 60 per cent by 2050. The new elements of Labor’s Clean Energy Plan as announced are: a $500 million Renewable Energy Fund, to develop, commercialise and deploy renewable energy in Australia; a $240 million Clean Business Fund, to help businesses and industry deliver energy and water efficiency projects, with a focus on productivity and innovation; and a $150 million Energy Innovation Fund to keep our world-leading scientists and researchers in Australia, rather than losing them overseas. These announcements complement the other key element of Labor’s Clean Energy Plan—a $500 million Clean Coal Fund to fund the deployment of clean coal technologies.

Labor understands that acting now on climate change is not only good for the environment but good for the Australian economy. The previous government failed to provide support to Australian clean energy researchers, and that has resulted in our experts heading overseas to develop and commercialise their technology in other economies. Only this government will provide the support necessary to keep Australian technologies in Australia, along with the jobs and economic opportunities that flow from commercialisation.

Federal Labor will implement an emissions trading scheme and will make the investments today that are required to help the economy prepare for emissions trading. Under the previous government’s policies, emissions are set to increase by 27 per cent above 1990 levels by 2020; under the present government, emissions will go down. We have ratified the Kyoto protocol. We have set a renewable energy target of 20 per cent by 2020. We have $8,000 rebates for solar power, $1,000 rebates for solar hot-water systems, $500 rebates for greywater piping and rainwater tanks, $500 rebates for landlords to install insulation and $10,000 in low-interest green loans for solar systems and water- and energy-saving measures. We have invested $15 million in a Clean Energy Export Strategy. We have invested $20 million in a Clean Energy Innovation Centre. We have invested in a Green Car Innovation Fund to develop and build green cars in Australia.

Labor went to the last election with a commitment of $100 million for a five-year Community Coast Care Program—as part of our Caring for our Coasts Plan—to help local communities protect the Australian coastline and prepare for the impact of climate change. I thank the Minister for the Environment, Heritage and the Arts for his visit to Dobell, where he re-emphasised this commitment and met with Landcare groups in my community, who are doing such a good job to try and make sure that our coastline does not end up in the ocean.

Increasing storm activity and sea level rises from climate change are threatening coastlines, property, habitat and the financial viability of local councils. The previous Prime Minister’s Science, Engineering and Innovation Council estimated that 700,000 coastal addresses are at risk from long-term sea level rise and large storm surges. These impacts are exacerbated by coastal development as a result of the sea change phenomenon, which is driving massive population growth. Under federal Labor’s plan, local communities will be better equipped to deal with extreme climate related events and storms. Community groups will be able to seek grants for action to guard against habitat loss, erosion, damage to dunes, waterway degradation and invasive weeds and pests. The government is providing national leadership on coastal management and bolstering support to local communities so that they too can take some practical action in relation to these issues. The Community Coast Care Program will provide grants of up to $50,000 for community groups, from unallocated funds in the Natural Heritage Trust, to undertake on-the-ground coastal restoration and preventive work.

In addition to the $100 million Community Coast Care Program, the Rudd government is committed to handover the Point Nepean and Malabar headlands to the New South Wales and Victorian governments for national park and public open space, provide a $200 million rescue package for the Great Barrier Reef and provide funding for rainwater tanks et cetera. Coastal icons will be among the first to experience the consequence of climate change if we do not act now. Our conservative projections of sea level rises would see Narrabeen Beach disappear by 2050; the Manly wharf made unusable; Cairns and its infrastructure under severe threat from storm surges; and Victoria’s 2,000 kilometres of coastline, including the Great Ocean Road, face frequent storm surges and saltwater incursions into wetlands. I have already gone into some detail about the effects that this would have on my electorate of Dobell.

Federal Labor will provide national leadership that breaks through the political barriers to deliver outcomes for coastal communities and coastal environments. The storage of a greenhouse gas substance in deep geological formations under the seabed is an important part of the broader plan to deal with climate change. I commend the bill to the House.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Change, Environment and Urban Water) Share this | Link to this | Hansard source

I rise to speak today on the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, in a cognate debate with the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 and the Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008. I want to proceed in two stages. The first stage is to address the problem and the second stage is to address our three-pillars response to climate change, clean energy and clean air.

Let me start by addressing the problem and recognising a very important thing. As a coalition, we have made a clear judgement—we did this in government and we continue this position—that Australia has to be part of a clean energy future for itself and part of a clean energy future with respect to our international and global responsibilities. We do so because we recognise that the accumulation of CO2 in the atmosphere has been the subject of international work which in turn says that this will have an impact on the world’s future environment through the greenhouse process. I recognise that that is disputed by many, but we make the judgement that it is of sufficient magnitude that we treat it as a vital issue. I have clearly stated, on the record on many occasions, that this is a strong personal issue, a matter of belief, a matter of judgement on the balance of probabilities, which are, I believe, overwhelming.

Having said that, the problem Australia faces is very simple. We contribute just 1.4 per cent of global emissions—about 578 million tonnes out of a total of approximately 40 billion tonnes of CO2 annually. Action alone is irrelevant. We have to do our part but action alone is irrelevant. We know that China and India are adding approximately 800 new coal- and gas-fired power stations over the coming five years. This alone is about 20 times greater than our entire generating stock in Australia of existing fossil based power stations. In essence, unilateral action will mean nothing.

That leads me to our three-pillars approach and where this set of bills, in relation to greenhouse gas storage, fits in. The first of our three pillars is this: we must have unrelenting international pressure to make sure that the great emitters—China, India, the United States, Brazil, Russia and Indonesia—are fundamental contributors to any change. If they are not part of the solution there will be no solution. Any actions we take at home will be rendered utterly irrelevant. The second part of the international approach is that the Rudd government has utterly and completely dropped the ball in relation to protecting the great rainforests of the world. These forests—in Indonesia, Brazil, Papua New Guinea and other parts of the tropics—represent 20 per cent of global annual emissions when they are felled and burnt. That is eight billion tonnes out of 40 billion tonnes. This is the single biggest source of emissions reduction and the single cheapest way to do major work towards emissions reduction over the next five years globally. We believe it is possible to halve the rate of net deforestation. In turn, that has benefits for local ecology and for communities, and it has a profound impact on buying the world time and the capacity to do what it can to decrease emissions. On that basis we think that the failure of the Rudd government to treat seriously the challenge of deforestation is an abject failure, one which we criticise and one which we will deal with.

The second pillar is in relation to the direct intervention in clean energy, and that is where these bills, which come from our work when we were in government, play a role. We support the general thrust of these bills but we have specific reservations, which we will make clear in the Senate. Those reservations include the minister being able to direct an outcome that potentially overlaps greenhouse gas storage and petroleum titles, incumbent petroleum operators, long-term liabilities and, in particular, ensuring that the Great Barrier Reef Marine Park is protected. Having said that, we support the general thrust of these bills, because half of Australia’s 578 million tonnes of CO2 per annum comes from the generation of electricity and on-site stationary energy production. That is the subject of these bills; that is the material that can be captured and stored. Where coal is used, greenhouse gas storage is a three-stage process—drying, gasification and then carbon capture and storage. In order to enable carbon capture and storage we need carbon supercorridors—we need the carbon highways that will allow the captured gases to be transmitted and then stored. In order to allow that storage we need a legal regime.

We are seeing that greenhouse gas storage is occurring around the world. Carbon capture and storage is occurring in Norway with the Sleipner and Snohvit projects, in Algeria with the Salah project, in the USA in Illinois and in Australia with Chevron’s Gorgon project, which is well advanced in its proposal to sequester greenhouse gases below Barrow Island. We are already seeing in my home state of Victoria the CO2 Cooperative Research Centre’s Otway Basin pilot project advancing at a great rate. I am proud that we put that project into place when we were in government. It is a model of both clean energy and, importantly for communities, clean air. It is a way of dealing with particulates, although CO2 itself does not have a local impact. When CO2 is captured we also see the generalised clean-up of the other particulates that accompany it. So it is good for local communities in the Latrobe and Hunter valleys, it is good for global emissions and it is indispensable in ensuring that we have a long-term future for clean coal and clean gas as fundamental energy sources in Australia. That is why we support this bill.

The third pillar of our approach to climate change is a marked, moderate and sensible approach to emissions trading that does not blow up the house and that does not mean that Australia puts itself at a competitive disadvantage with the rest of the world. If there is no global agreement, then we believe in a low and slow commencement price starting in 2011-12. We are committed to the concept of emissions trading—indeed, the architect of it is the new Leader of the Opposition, the member for Wentworth. But the member for Wentworth was sensible in putting in place a proposal that would be careful, that would not destroy the clean energy sector—as we are seeing—and that would not wreck Australian industry by bringing it in too quickly and out of sync with the rest of the world. We need to look at how we address the question of a level playing field. I have met with numerous industries, including industries from the cement, aluminium and LNG sectors. All of those industries will find themselves at a gross disadvantage internationally. There are also the import exposed industries such as automotive manufacturers, components manufacturers and cement and various forms of food and grocery production that will be exposed if there is not a level playing field.

The government do not seem to have put an appropriate mechanism in place. We support the general concept, we believe it has a role, but it is the only mechanism that they are pursuing. They have dropped the ball in relation to cleaning up our energy sources, they have dropped the ball in relation to protecting the great forests and they have put all their eggs in the basket of a rushed emissions trading scheme. We believe in dealing with this issue, but there is a good system and a bad system—and the government have proposed a bad system that has been rushed. Under what they are currently proposing, Australian jobs will suffer while there will be no benefit to the environment.

Nevertheless, cleaning up our energy sources is fundamental. The clean energy vision is ours; the solar continent vision is ours. We will prosecute them and we will develop them. We believe in the capacity of clean energy to be a fundamental source of innovation and competitive advantage for Australia if done correctly. That is why we support the bill in principle, but we will move the amendments as foreshadowed in the Senate.

Mark Dreyfus (Isaacs, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 and the Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008. These bills create a new class of offshore titles that provide for the transportation by pipeline and the injection and storage in geological formations of carbon dioxide and other greenhouse gases such as methane.

Carbon capture and storage is a process by which carbon dioxide—or potentially other greenhouse gases—is captured and separated from a source such as a power plant and then transported and injected into a geological formation, often undersea, for permanent storage. Through the creation of these new offshore titles, these bills provide for access and property rights to be allocated for the capture and storage of greenhouse gases. A greenhouse gas injection licence will authorise the injection and storage of what is termed in the legislation as a ‘greenhouse gas substance’. Under regulations, the responsible minister will have the power to extend the meaning of ‘greenhouse gas substance’ to include other greenhouse gases in several circumstances, including, firstly, if the protocol to the London dumping convention is amended to permit geological storage of other greenhouse gas substances and, secondly, if the provisions of the legislation are extended to include the permanent storage of methane from offshore petroleum operations.

The Offshore Petroleum Act applies in the Commonwealth offshore jurisdiction, between three nautical miles offshore and the outer limits of the Australian continental shelf. Under the proposed model the Commonwealth will be primarily responsible for the administration of greenhouse gas storage. This differs from current arrangements that apply to the petroleum industry, under which there is joint authority between the Commonwealth and state and territory administrations. The framework established by this legislation will provide a harmonised and nationally consistent approach to carbon capture and storage. This will result in reduced administrative costs and greater certainty for market participants.

This bill, although it is specific to a particular technology, is part of a broader comprehensive approach to dealing with the challenge posed by climate change. The scale of this challenge requires national leadership. It is clear that human induced climate change poses a threat to our prosperity, our natural environment, our lifestyle and standard of living, and our community. The uncertainty that is created by both the changes in weather patterns and the greater variability in weather patterns has serious implications for our economic prosperity. Climate change is an issue that will profoundly affect Australia’s economy and future national prosperity. The Minister for Climate Change and Water made this clear in a speech to the CEDA State of the Nation conference on 6 June, earlier this year, when she said:

… this Government believes climate change is an economic issue, and the only way to tackle climate change is with real economic reform.

The response of each country to the challenge of climate change will be unique to their particular circumstances. Australia’s response will necessarily be shaped by the importance of the coal industry as both a source of energy and a source of export revenue. Currently 80 per cent of Australia’s electricity is generated from coal. Black coal from New South Wales and Queensland remains an important and growing source of export revenue. In 2005-06 coal generated some $24 billion in export income for Australia, and it is expected to be worth some $55 billion this financial year. Quite simply, Australia is a fossil fuel dependent economy. Even as we invest in renewable energy sources and even as we reduce our energy consumption, Australia will remain a fossil fuel dependent economy for some time yet.

As a Victorian, I understand the critical importance of brown coal to our state economy. Brown coal has been regarded since the 19th century as a cheap and easily accessible source of energy. The scale of the resource that is to be found in the Latrobe Valley is, I suspect, not appreciated even by Victorians, let alone other Australians. What is understood is that brown coal has helped to underwrite much of Victoria’s industrial and broader economic development. It is at present the case that the enormous deposits of brown coal that are found in the Latrobe Valley fuel some 95 per cent of Victoria’s electricity generation. The central part that brown coal plays in the Victorian economy is, whatever occurs in relation to other forms of energy generation, likely to continue for some time to come. The scale of the resource alone—estimated, at current rates of usage, to be a 500-year supply—would indicate that brown coal is going to continue to be used. Certainly planning in the Latrobe Valley, with which I have had some involvement, and planning by the state government for the future assumes that there will be continuing use for some time to come of the enormous brown coal resource in the Latrobe Valley.

The Rudd government understand the important role that coal has played in building our national prosperity. In addition to this bill, the Minister for Resources and Energy announced in July the establishment of the National Low Emissions Coal Council and the carbon storage taskforce. The minister said at the time:

The Taskforce will examine the work already underway in Australia and indicate priority issues going forward. It will make recommendations to the National Low Emissions Coal Council on a forward work program for geological mapping, infrastructure and storage locations.

The carbon storage taskforce is particularly important in the process of making carbon capture and storage a reality for Australian industry. This approach has been welcomed by the Australian Coal Association. To acknowledge the importance of coal to our national prosperity in no way diminishes our commitment to tackling climate change. I have had a long passion for the natural environment of our country. As I said in my first speech in this parliament in February:

We need to live in the land in a way that will leave it improved on our passing and not depleted. It can only sustain us short term if we sustain it long term, for our children and our children’s children.

To deal properly with climate change requires us to understand the economic reality that sustains our standard of living while also acknowledging the scientific reality of human induced climate change. Denial of economic reality is just as dangerous as denial of scientific reality.

For a long time now, the scientific evidence has been overwhelming. Senator Minchin, one of the climate change deniers on the other side of the other house, claimed last year:

There remains an ongoing debate about the extent of climate change …

Of course there remains an ongoing debate on this matter. There are so many avenues of scientific inquiry that there is always going to be debate. That is the nature of scientific research. But researchers around the world have meticulously and methodically established a body of evidence that shows that climate change is real and that it is being caused by human activity. For a long time now, Australians have understood this and have been taking action at an individual level, at a community level, at a corporate level and at a state level to alleviate the impact that climate change will have on our nation. The election last year of the Rudd Labor government has finally provided Australia with the national leadership that is required to tackle this issue.

It was a little disturbing to come into the House today and hear the member for Flinders apparently moving away from what we had hoped might be a more bipartisan approach to the national leadership that is required on climate change. Very directly, it would seem that there still remain very serious divisions among those opposite as to what action should be taken in relation to climate change. One of these divisions was exposed this morning by the member for Flinders, who has had until now—and perhaps may continue to have—some responsibility for environmental matters on the other side of the House. Following a statement that members of the opposition seem to like to make often—that Australia is responsible for only 1.2 per cent of global emissions—we had this statement from the member for Flinders: ‘Action alone is irrelevant.’ I listened carefully to the member for Flinders when he said that. He followed on with reference to the large number of coal-fired generators that China and India are planning to construct in the next few years. He then made an even more direct statement: ‘Unilateral action will mean nothing.’ He then went on to try to explain what he described as the three pillars of the opposition’s policy in relation to climate change and the need for action on climate change. They are, one would have to say, very shaky pillars indeed, because, under cover of what is meant to be a debate about a group of bills dealing with carbon capture and storage procedures, the member for Flinders strayed to an accusation that the Rudd Labor government is not treating deforestation of the world’s rainforests seriously.

These statements that the member for Flinders has made here this morning—that action alone is irrelevant and that unilateral action will mean nothing—put him as the opposition spokesman in this area at odds with statements made very directly by the newly elected Leader of the Opposition as recently as July this year on this very subject. The member for Wentworth said:

The coalition’s policy, the Howard government’s policy, last year was that we would establish an emissions trading system not later than 2012.

Of course, that is a remaining area of difference that the government has with the opposition, because we believe very strongly that urgent action is required and it has been made more urgent because of the failure of the Howard government to attend to these matters. Mr Turnbull went on to say:

It was not conditional on international action; it was obviously done in the context of international action.

That was the former shadow Treasurer, now Leader of the Opposition, saying in July of this year that the proposal for an emissions trading system was ‘not conditional on international action’ and yet here we have the member for Flinders today persisting with this opposition position that for Australia to act is somehow irrelevant and that for Australia to take action will, as he puts it, mean nothing. It is a complete failure on the part of those opposite to understand the need for Australia, as a major producer of coal, a major exporter of black coal and a major user of brown coal, to set an example for the world and to show other countries who are using coal that there are different and cleaner ways of using coal that might offer some future for the use of this resource. Far from being irrelevant, action by our country will show leadership to the rest of the world and is an important step for us to be taking.

This group of bills before the House sends a clear message to the business community and to the scientific community: we are serious about climate change; we are serious about finding solutions to climate change that are in Australia’s best interests; and we are serious about carbon capture and storage as a solution. To be sure, it is a solution that requires more research and more work, but we as a government are setting up a framework within which that work and that research can take place. The technology is an exciting one and is particularly promising given Australia’s economic and geological circumstances. Around the world, there are international pilot projects taking place in Canada, in Poland, in the Norwegian part of the North Sea and in Algeria. This technology will be particularly important for the electricity generation sector, which makes up 35 per cent of net national greenhouse gas emissions. These bills, by creating a framework for the access and property rights associated with transportation by pipeline and the injection and storage in geological formations of carbon dioxide and of other greenhouse gases, will help Australia to meet its long-term target of reducing Australia’s greenhouse gas emissions by 60 per cent by 2050. I commend the bills to the House.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Interestingly enough, in the last parliament I was on the Standing Committee on Science and Innovation evaluating the technology of geosequestration. I have had further information about geosequestration subsequent to that. There are a few interesting things about geosequestration. One is that the coal industry itself acknowledges that the cost of carbon will have to be $50 a tonne in order to make geosequestration commercially viable. One of the questions is: why would people change their behaviour if there was no cost associated with it? In other words, if the cost of carbon is not $50 or more a tonne, there is no reason the coal-fired power industry would get involved in a geosequestration project. There are a few problems associated with geosequestration. One problem is that you pump it underground—carbon dioxide itself is very corrosive—and no-one is 100 per cent certain what will happen to it in the long term. However, we do know that the release of carbon dioxide into the environment in large doses can have very, very serious consequences. An example of that was the natural eruption, if you will, of carbon dioxide at Lake Nyos in Cameroon in 1986 and 1,500-odd people died. If you pump carbon dioxide underground into geological reservoirs, there are risks associated with that. We are told by people who want to get involved in geosequestration, ‘Well, we will constantly monitor it.’ The question is: what will be the cost of that constant monitoring into, basically, the infinite future? People talk about the problems of storage of nuclear waste, but at least that is very clearly contained in a small geographical area. With this, you are talking about areas all over the place where you are storing the carbon dioxide.

The other issue is that the power industry says that they will not take on forever the responsibility of the continual monitoring and potential consequences of a leak of carbon dioxide into the environment. They would probably accept responsibility for about 50 years, but after that it would be up to the government to cover the costs of potential leaks. So there are very serious potential costs with this. Even if you go along with the so-called consensus view of climate change, having an emissions trading scheme with a high cost of carbon could potentially result in the loss of jobs and industry in Australia. This is before you even get into the issue of it actually having a negative effect in terms of overall global emissions.

Everyone has acknowledged that this is a global problem—you cannot geographically confine the atmospheres all over the planet. Let me give you an example of this. In my state of Western Australia, there is an aluminium-smelting industry. At a cost of $50 a tonne, it may well be that Alcoa decide it is not viable for them to smelt aluminium in Australia anymore. The aluminium-smelting industry in Western Australia use gas as their source of power generation. So what are they likely to do in that case? They would be likely to ship their industry to China. So we lose the industry, we lose the jobs but—here are the factors that are very damaging for Australia—we also have not only the monetary costs associated with decommissioning an aluminium smelter in Australia and commissioning a new one in China but also the carbon costs. You need to then transport the bauxite from Australia to China, which has a carbon cost associated with it. In addition to that, it is highly likely that the power generation method for the aluminium smelter in China would be coal. The overall result is that we have introduced an emissions trading scheme, we have shipped jobs and industry overseas and we have actually contributed to increased carbon dioxide output. That is fraught with all sorts of consequences and it needs to be considered very carefully.

I have heard many on the other side spouting about science, scientific consensus and so on. For instance, we have the member for Kingsford Smith calling himself a lay scientist. I wish he were in here so I could educate him a bit about what the scientific process actually involves. Science is about falsification. You put up a hypothesis and other scientists are duty-bound to try to prove that hypothesis wrong. That is what science is about. It is not about accepting a hypothesis because it feels great; it is about trying to prove it wrong. What we have, for instance, with the IPCC is the idea that everyone should be sitting around the table singing Kum ba yah from the same songbook. That is a stupid way of going about it and, quite frankly, science has never been about consensus. Science is about data and it is about evidence, and it is about evaluating that data and evidence and seeing whether it falsifies a theory. The point here is that there is a lot of criticism of anyone who dares to question the consensus view. This reminds me a little of the 1930s. Hitler could not stand quantum and relativistic physics because he saw it as Jewish science. As a consequence, he hated the theory of relativity. So he commissioned a book called One hundred authors against Einstein—Einstein being, of course, a German Jew. Einstein was asked how it felt to have 100 eminent scientists questioning the theory of relativity—and didn’t that give him cause for concern? Einstein’s response was that it doesn’t take 100 scientists; it takes one fact. And that is the problem here.

There are also problems with some elements of statistical studies and so on. A lot of climate science is about statistics, and a lot of climate science is about computer models. Then there is the problem with the whole business of ‘Okay, how does the peer review process work?’ We hear a lot of discussion about peer review, as if, once a thing is in a peer review journal, it is unarguably correct. Let me give you an example of how peer review works and how science works.

Let us assume you have an epidemiological study, a statistical study, and let us assume you want to correlate, for example, cancer clusters with high-tension powerlines. Let us make the assumption that there is, in fact, no correlation and that high-tension powerlines do not cause an increased incidence of cancers. The nature of statistics is that you might have 100 studies, and 20 studies would show positive correlation: yes, indeed, there is a correlation between high-tension powerlines and cancers. You might also have another 20 studies which show there is negative correlation: that proximity to high-tension powerlines actually results in fewer cancers. Then you might have the middle 60 studies showing effectively no correlation whatsoever. Remembering that scientific journals want to sell their journals, obviously they want to sell stuff that is interesting. As such, the no-correlation-whatsoever papers that might be submitted to the journal would not even go out for peer review, because they would not be seen as something that the journal would want to publish. The negatively correlated studies would be likely to have close to no chance of getting published, but the positively correlated studies—the interesting stuff—would be published. So then the consensus is: yes, there is this effect. Then you would have a metastudy, where someone would go through the peer reviewed papers and say, ‘You know, of 100 papers that I have reviewed on this, 95 of them show that there is a positive correlation between cancer and proximity to high-tension powerlines.’ This becomes the strong consensus for something where there is no effect whatsoever. This is the danger of not understanding how this entire process works.

The point is: it comes down to journals wanting to publish what is interesting, but it also comes down, to a certain extent, to an old boy network. I will give an example of my own. When I was working with the Defence Science and Technology Organisation, off my own bat—

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I hate to interrupt the member, but we are discussing the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008. I wonder if you could bring your statements to that bill in time.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

I certainly will, because the issues of peer review, climate science and the need for geosequestration are intimately related. As an example of my own about the aspect of peer review, I wrote a paper called ‘Target aspect dependent radar cross-section: the effect on assumed beam angle’. Because I was not working for DSTO in my personal time, I sent the paper from my home address. But, with one of my emails, I also sent the return email address for DSTO. Guess what? Without my knowledge, the IEEE Magazine of Antennas and Propagation actually published the paper. This is a peer review journal, and they gave my affiliation as DSTO. This is the thing: there are all these elements that are intertwined with peer review.

Let us have a look at the peer review system with the Intergovernmental Panel on Climate Change—that is intergovernmental, Prime Minister, not international; and there are fewer than 1,000 scientists, not 4,000 scientists. There is an inherent problem with the Intergovernmental Panel on Climate Change. The inherent problem goes right down to its mission statement, which is:

The role of the IPCC is to assess on a comprehensive, objective, open and transparent basis the scientific, technical and socio-economic information relevant to understanding the scientific basis of risk of human-induced climate change, its potential impacts and options for adaptation and mitigation.

This is a field of science that has had more than $50 billion pumped into it. The key words are ‘human-induced climate change’. Let us say that they proved human-induced climate change was not happening. What happens to that research money? What happens to the IPCC itself? By its own mission statement, it ceases to exist.

We have the issue of data and transparency. I read out the mission statement; it includes ‘transparency’. Phil Jones, the head of the Hadley Centre—one of the major repositories of global temperature data used by the IPCC—said:

Climate scientists should think about data quality more often, so that there is no opportunity for incorrect data to sow seeds of doubt in people’s minds about the reality of climate change.

Steve McIntyre was looking at statistically evaluating the data, and he happens to be somewhat sceptical of anthropogenic climate change. Phil Jones, when asked by Steve McIntyre for data, said: ‘We have 25 or so years invested in the work. Why should I make the data available to you, when your aim is to try to find something wrong with it?’ That is what science is about. It is about falsification. Phil Jones, in this instance, is not about science; he is about a religion, because he does not want to be proved wrong.

Upton Sinclair, a great political writer in the early part of the last century, in a book called I, Candidate for Governor: and How I Got Licked, wrote:

It is difficult to get a man to understand something when his salary depends upon his not understanding it.

I think it is critical to also consider that in this argument.

On the issue of the science being settled, we are so certain about climate science! We know exactly what is going on—no room for doubt! This is what CSIRO puts as a disclaimer on its climate change science:

The projections are based on results from computer models that involve simplifications of real physical processes that are not fully understood. Accordingly, no responsibility will be accepted by CSIRO for the accuracy of the projections inferred from this brochure or for any person’s interpretations, deductions, conclusions or actions in reliance on this information.

In other words, we will put out this data but do not hold us to it; but, by the way, this whole climate science area is absolutely beyond doubt. What we have with this issue is institutionalised group think. Where pay packets are concerned, that obviously has an effect. Have you ever wondered why so many scientists who question climate science have the title ‘emeritus’? It is because they do not actually have any pecuniary interests related to the output of such data. You get similar situations within defence, but that is entirely another story.

The question is: where is the research funding for devil’s advocates who question whether this view is correct? The Noel hypothesis on this whole area of science should be that all of the climate change that we observe is natural, and then work should be done to prove that it is not. Instead, the Noel hypothesis has been distorted towards the view that the majority or all of climate change is human induced, and then try to prove that it is wrong. It is an incorrect assumption from the start.

Some of the stuff that comes up is interesting. The World Wildlife Fund blame climate change for the coldest August in Sydney for more than 60 years. Yes, it is global warming because Sydney had a really cold August! They say that the freezing temperatures are proof of the urgent need to cut carbon pollution. Sir David King, who was the head of the British federation of scientists, said shortly after the tsunami that it highlighted climate change risk. What? It is quite interesting what you get. Global warming has been associated with so many things. If you want to get a research grant, put the terms ‘global warming’ or ‘climate change’ into your application. For instance, in relation to geophysical research letters, a group of scientists said that global warming will slow the earth’s rotation. In another issue of geophysical research letters, geophysicist Felix Landerer said that global warming will speed the earth’s rotation. Global warming is now being fitted into things like the earth’s rotation.

What about the Australian experience? Dr Wendy Craik blames the low level of the Murray-Darling system on climate change. However, I have a time series graph, which I seek to table, from the Bureau of Meteorology—obviously a very biased organisation—showing average rainfall for the Murray-Darling Basin. Guess what folks? It is almost no different from what we have observed over the last 100 years. What we do have is overallocation and catchment mismanagement; it is not an issue of too little rain. What about other data? We see that, by all measures, temperatures have gone down since 2001. Ocean temperatures have gone down since 2004. So what are the scientists trying to blame it on now? Latent heat. We cannot measure it; it must be latent heat. It is called situating the appreciation rather than appreciating the situation.

I will cut to the chase. The final thing—and I seek to table this document as well—is that the predictions are that there will be an upper tropos or tropical troposphere heating the atmosphere due to well-mixed greenhouse gasses. Observations show that there has been no such heating whatsoever. I could go to many more examples that clearly demonstrate that even within the IPCC there is considerable question—(Time expired)

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

Are you seeking leave to table those two documents?

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

Yes.

Leave granted.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

The contribution by the member for Tangney is one of the most extraordinary that I have heard since coming to this House. I thought that those on the opposite side had an almost lukewarm approach to climate change. But, obviously, there is not just scepticism but outright atheism on the opposite side of the House. It must make for interesting meetings in the party room when they discuss issues of this nature.

I am here to speak about the government’s framework in terms of four bills that were introduced into this House on 18 June 2008. I am pleased to speak on them because it is critical to the future of our country that we get the issue of greenhouse gas storage right. The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, the principal bill, establishes the whole framework for injection and storage of greenhouse gases into a stable subsurface geological reservoir more than three nautical miles offshore in Commonwealth waters. The second bill, the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, is about annual fees alone, and they are rising. The Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 is about the registration that is necessary under the framework. The Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008 is an ancillary bill to the principal bill, the greenhouse gas storage bill.

The states have been involved in this type of process for a while. Several states have been involved in onshore carbon dioxide storage. South Australia has been involved in it through its petroleum legislation which provides for injection and storage of CO2. Victoria has introduced a bill into parliament to govern storage in its jurisdiction. Queensland is currently drafting a stand-alone type of legislation which will provide a separate tenure regime for onshore carbon dioxide storage in Queensland. The other states are in the embryonic stages of considering such legislation.

This particular legislation deals with the Commonwealth jurisdiction and is important in terms of its features. It talks about the rights of precommencement petroleum titleholders being given a high level of protection where there is potential adverse impact on their operations. I am pleased there is a differentiation between precommencement petroleum titles and postcommencement petroleum titles in relation to exploration. The holders of certain tenure must obtain approval from the responsible minister in order to carry out key greenhouse gas operations. I am also pleased that it is left to the common law with respect to long-term liability arrangements.

This particular piece of legislation, the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, is the main piece of legislation. It governs the injection and storage of carbon dioxide offshore and underground in stable subsurface geological reservoirs in Commonwealth waters. New titles will be located in the area more than three nautical miles offshore in our coastal waters and the outer limits of the continental shelf within the jurisdiction of the federal parliament and the Commonwealth of Australia. The amendments in these bills mean that the definition of ‘greenhouse gas substance’ will be carbon dioxide together with incidental substance derived from the capture or injection and storage processes—with the addition of chemical detection agents to assist in the tracing of the injected greenhouse gas substances. There is provision for the extension of the meaning of greenhouse gas substance to include other greenhouse gases. This bill effectively establishes three categories of storage formation—a potential greenhouse gas storage formation, an eligible greenhouse gas storage formation and an identified greenhouse gas storage. So the bill is about providing access and property rights for greenhouse gas injection and storage offshore and ensuring the security and safety of same.

The minister is to be commended for resolving the really delicate and difficult balance between offshore petroleum industries and greenhouse gas storage industries offshore. There are different competing interests and the minister has done a fine job, in my view, to resolve potential conflict. We need certainty for those companies involved in producing so much wealth for this country. There are companies involved in greenhouse gas injection and storage which produce huge amounts of money for our economy; and the petroleum industry is crucial to our continued wealth and the lifestyle that we Australians enjoy, which is the envy of so many people in the world.

The petroleum industry wants to operate and utilise its offshore rights to drill, and that is natural. The minister is to be commended for the consultation process he undertook with industry and also for the unusual step of referring the matter to the House of Representatives Standing Committee on Primary Industries and Resources so that it could conduct an inquiry into the wording of the draft bill, its objectives and its intentions. The House of Representatives committee believes that the bill does establish an effective framework for access and property rights, provides an appropriate regulatory regime for the management of greenhouse gas injection and storage, and provides a predictable and transparent system to manage the interaction between greenhouse gas re-injection and storage on the one hand and petroleum operations on the other.

What does industry have to say about this? Well we have seen ExxonMobil endorse the framework established by the bill, albeit with certain caveats. They said, and this was reported to the committee:

ExxonMobil believes that the Bill establishes a framework that is suitable for adoption on a national basis by using a regulatory structure analogous to petroleum regulation in Australia. In particular, we note and support the intent of the provisions of the Bill designed to protect the rights of existing petroleum license holders.

Likewise, Chevron supported the use of offshore petroleum legislation as a model. They said:

The proposal to establish a series of title rights equivalent to those applied to the upstream petroleum industry provides an effective mechanism for providing property rights for carbon dioxide storage proponents and for the regulation of activities related to the storage of greenhouse gases. This property rights model has provided certainty for the oil and gas industry and is an appropriate model for the establishment of a greenhouse gas storage industry.

The House of Representatives committee, in its quaintly titled Down under: greenhouse gas storage report tabled in August 2008, endorsed the bill. There were a number of recommendations made, and I think the minister took up about 17 of the 19 recommendations. The amendments to the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 were developed to address the recommendations of the committee, and the minister has certainly consulted widely with the committee members. I am very pleased that so many submissions were tabled from so many interested stakeholders in this regard, because it is important that we get this right for our future.

On 3 August 2008 the minister welcomed the report of the standing committee. He described as ‘exceptionally good’ the work the committee had done in its consideration and in the preparation of its report. I have read that report in its entirety. It certainly discusses the issues in detail—every issue was investigated. It was a bipartisan approach. I listened to what the previous speaker had to say, and his response was extraordinary compared to that of the members on his side who were clearly involved in the whole process and the preparation of the report.

When the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 was discussed and introduced by the minister, along with the ancillary legislation, on 18 June 2008 in this House, he said that the offshore petroleum amendment bill was the most appropriate vehicle for the implementation of a greenhouse gas injection and storage regime offshore. The Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008 relates to the registered holders of petroleum titles held under the Offshore Petroleum Act who pay an annual fee for the term of the titles. The amending bills add greenhouse gas titles to the titles in respect of which annual fees are paid. Similarly, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 adds greenhouse gas titles to titles in respect of which transfers and dealings will attract the imposition of registration fees. The Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008 extends the imposition of a safety investigation levy, the safety case levy and the pipeline safety management plan levy in respect of petroleum facilities and pipelines in offshore waters to greenhouse gas facilities and greenhouse gas pipelines. It should be noted that the bills will have no financial impact on the federal government’s budget.

Climate change is a really big challenge. The farmers in my area have told me they have seen climate change through many years of work on the land. The farmers in my area go back generations. There were mainly German settlers in the Lockyer Valley and they got on very well. Recently Bill Hayden, the former Governor-General, said to me that he thought that, in my area, the German Protestants and the Irish Catholics got on very well because they both hated the English! They had a rugged time when they were farming the land and clearing the Rosewood Scrub. It was a tough time in those areas. So they are tough people. They are really decent, honest, hardworking people in the Lockyer Valley and also in the Fassifern shire. They work particularly hard on the land. But they have said to me that they have noticed the change in the weather patterns. They have lived for a long time with dry summers and water shortages, and it is to be noted—notwithstanding what the previous speaker had to say—that the 12 hottest years in history have been recorded in the last 13. And certainly the farmers in my electorate of Blair in South-East Queensland have said that to me on numerous occasions. This legislation that we are dealing with today is about committing ourselves to addressing climate change and reducing Australia’s emissions, and the storage and injection of greenhouse gases in this way is crucial—it is part of a whole framework.

Why should we act? Well, notwithstanding what the previous speaker said, we are acting and we are acting because it is responsible to do so, because it is real that humankind has made an impact on the climate in which we live. Our response is based on three pillars. It is about reducing Australia’s greenhouse gas emissions; adapting to climate change, which is really happening throughout the world and which we are experiencing all the time; and helping on an international basis to achieve global solutions to these problems. That is what we are doing and that is what we are all about.

The government’s Carbon Pollution Reduction Scheme will place a cap, a limit, on the amount of carbon pollution which an industry can emit, and this legislation we are dealing with today is all part of the same framework. We are doing this because it is necessary. We are doing this because it is good for us, it is good for our children and it is good for the planet. I have said before that if John Grey Gorton were here today—the former Liberal Prime Minister who once famously said that we were all socialists now—he would say, ‘We are all green now’—except some on the opposite side, who may not necessarily adopt the same view that we do and that, I believe, the Australian public and certainly the people in my electorate do in terms of climate change.

The government recognise that there will be adjustment costs for industry, just as we recognise that there will be challenges for the petroleum industry and those who work offshore. But we will do things to assist households. We will cut fuel taxes on a cent for cent basis, to offset the initial impact on fuel associated with the introduction of our Carbon Pollution Reduction Scheme, and that will help people in my electorate when they are facing these challenges. We recognise that there will be a cost to businesses. We recognise there will be costs for businesses with the legislation that is before the House. We recognise there will be adjustment costs. But, as we move towards a low-carbon economy, we need to do these sorts of things.

That is why we are establishing the Climate Change Action Fund and the Electricity Sector Adjustment Scheme. We cannot ignore the fact that 20 per cent of the total exports from our country are energy resources, and that proportion is growing. We account for 30 per cent of the world trade in coal. We are a clean coal supplier—and we need to be. We need to be at the higher end of the clean coal spectrum. We supply about eight per cent of the world’s liquefied natural gas. We provide almost a quarter of the world’s mined uranium. And that is why the resource sector is so crucial for our wealth and our future wealth. But we cannot just do nothing about these sorts of things. Eighty per cent of our electricity is generated by coal. So we have to respond to the challenges of coal, the challenges of oil and the challenges of natural gas.

The legislation that is before the House will create an environment in which industries can invest in carbon capture and geological storage projects with confidence, and it will encourage the commercialisation of technologies which have a great potential to play an important role in reducing global greenhouse gas emissions. The bills provide those involved in these industries with the ability to develop further technologies which will assist future industry—industry that we do not even consider will be around. Many of us would not have dreamed that we would have computers on our desks every day. We cannot envisage the kinds of jobs that our grandchildren will eventually have. This sort of legislation will allow technologies to develop and industries to prosper which will help our future generations. And, contrary to what the member for Tangney said, science does tell us that continued high levels of carbon pollution have led to global warming. And if we go on, on a business-as-usual trajectory, the consequences for all of us will be significant. They will be significant for my part of the world because in Queensland we have the Great Barrier Reef. Just imagine the damage that global warming will do to that!

The International Energy Agency estimates that CO2 capture and geological storage has the second largest potential, behind energy efficiency, to develop cuts in CO2 emissions. And this is because Australia has significant CO2 storage potential in offshore waters. We could store about 25 per cent of our annual CO2 emissions there. These amendment bills are required to enable the government to release areas offshore in which to store these types of emissions.

Some people have said it takes courage to do what we are proposing to do, but I do not agree. I think it is really reckless not to act. It is reckless for us, for our children and for our grandchildren. I do not think we can delay when it comes to these sorts of things; we must act. That is why the Rudd Labor government has a comprehensive national plan to tackle climate change, from the development of renewable energy and energy-efficiency solutions to international action and initiatives such as signing the Kyoto protocol, which it did almost immediately upon taking office. The government is developing what we call the Carbon Pollution Reduction Scheme, which is designed to bring down carbon pollution emissions with minimal impact on businesses, households and the economy generally. The previous government spent years arguing about whether climate change even happened, and the previous speaker verified everything that I have just said when it comes to that issue. It is not even clear today where the opposition stands. We know where the member for Tangney stands; he has let us know very clearly.

The Garnaut report, as well as the experience of other countries, concludes that an emissions trading scheme is the best way to reduce our greenhouse pollution. This is why we are doing it and why this legislation is part of the whole framework. At present industry and business have no limit on how much they can pollute, and that is why we have global warming. An emissions trading scheme will require business and industry to buy pollution permits for each time pollution is contributed to the atmosphere. That is good. Our businesspeople are flexible, hardworking and dedicated to the pursuit of the national interest, but there is no cost-free option for tackling climate change. An emissions trading scheme is the best way to reduce pollution at the lowest cost to our economy, and the type of legislation we are debating today is important in the scheme of things. Accordingly, I commend the bills to the House.

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

It is with pleasure that I join the debate here today. I thank other members for their contributions, which I have followed with a great deal of interest—quite thought-provoking contributions they have been. The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 amends the Offshore Petroleum Act 2006 to establish a system of offshore titles. It will authorise the transportation by pipeline, injection and storage of greenhouse gas substances in deep geological formations under the seabed. I rise to express my general support for the bill and the process it seeks to facilitate—that is, the sequestration of greenhouse gases, primarily carbon dioxide.

In supporting the process, I must report a growing level of scepticism in my own community about the issue of man-induced climate change and the government’s proposed response—particularly the emissions trading scheme. I certainly accept that climate variability is real, but how much of what we are experiencing right now in my particular region can be put down to permanent change and how much to a drought event is a subject of much debate within my community. I also seek to put on the public record the overwhelming need for better education and community understanding of the quite complex issues we are dealing with here and of terms like ‘geosequestration’, ‘carbon capture and storage’ and ‘climate change’ itself. I think we need to involve our communities more in this entire discussion, and there is a great deal of room for a more mature and robust debate around all of these issues and the possible solutions without the need to stereotype people as sceptics or true believers.

There is a great deal of goodwill in my community for action to protect the environment. As a whole, Gippslanders are very passionate about our local environment. We have thousands of volunteers in groups like Landcare who are getting their hands dirty and doing the practical environmental work that is required in our region. We have farmers who are investing in nutrient reduction programs and whole-of-farm plans to improve water quality, which is such a critical issue for the people of Gippsland and the Gippsland Lakes themselves. We have many industries which are investing in technology to clean up their own operations.

I still believe there is a great deal of confusion about climate change, and the government’s proposed response with the emissions trading scheme is cause for concern. We need a proper debate and we need to canvass all the possible solutions. A classic example is the issue of sequestering carbon in the soil. Briefings that I have received on this issue, from my perspective, demand further investigation because of the real prospect we have of improving our agricultural production through better soil conditions while achieving the government’s desired aim to deal with carbon emissions. That has some exciting possibilities for us, and I will be following that up with the industry involved.

If the government were prepared to debate these types of issues in completely good faith, it would start by immediately withdrawing the climate change propaganda campaign which is currently screening on our TVs. This type of television advertising, with its graphic images, is purely designed to do the groundwork for the government’s climate change policies, and I think scaring the community and trying to dumb down the debate in the hope that there will be no resistance to an emissions trading scheme do none of us any great credit. The massive cost and the prospect of job losses that are related to the emissions trading scheme issue are coming at a time when Australia can least afford them.

I am reserving my position on the emissions trading scheme for those very good reasons. We have not seen the economic modelling from the government at this stage and we have very limited knowledge of the direct impacts, particularly as they affect regional communities. I fear that in some regards we are running headlong into an economic disaster which will be most heavily felt in rural and regional communities like my own area, Gippsland. The industries that are going to be most affected by government policy on climate change are those that are primarily located in regional areas.

I may return to that point in a few moments time, but first I want to highlight the potential opportunities that I believe this bill presents in the Gippsland situation. There is no doubt that Gippsland will need to be at the forefront of the research and development to successfully capture and store carbon in the future. We have a strong and vested interest in developing the technology and becoming a major player in this emerging industry. If we can make it work anywhere, Gippsland is going to play a major role in the future.

The Gippsland Basin is obviously a major source of oil and gas for our nation. I am very much a layman when it comes to the issues of geology but, as I understand it, the very same geological formations which have produced the structures for trapping oil and gas beneath the surface make the Gippsland Basin a very attractive proposition for this type of activity. Studies have shown that the Gippsland Basin has the capacity to store very large volumes of carbon dioxide. It possibly goes without saying that the location of the basin, alongside the Latrobe Valley power stations, provides an obvious link for this type of activity. Indeed it is regarded by many in the power and oil industries as the possible solution to the issue of CO2 emissions from brown coal production in the Latrobe Valley.

But I again make the point about the need to hasten slowly in relation to the emissions trading scheme, which is inextricably linked to this bill. Carbon capture and storage may be the big ticket item that provides the answer to the issues facing brown coal power generators, but we are several years away from achieving the desired result. It is in no-one’s interest to jeopardise the economic viability of power generators in the Latrobe Valley by moving too fast or placing too heavy a burden on their operations. I refer to comments this week from the Chief Executive Officer of Loy Yang Power, Mr Ian Nethercote, who has flagged his concerns about the future of his industry. I stress that Mr Nethercote does not oppose an emissions trading scheme, but he is seeking a balanced approach. Many in the industry and in the Gippsland-Latrobe Valley hold a similar view. Mr Nethercote is quoted in the Latrobe Valley Express this week, talking about Professor Garnaut’s supplementary draft report and the recommendation of a $20 per tonne fixed carbon price. He said:

If we look at Loy Yang, we would need to find an extra $1 million a day just to cover permit costs.

If we then take that a step further, that means for the Latrobe Valley brown coal sector you need to find about $1.2 billion, that’s if its $20 per tonne.

If you take that across the national market, then it comes out to $4 billion a year, the numbers are huge, they’re massive.

I add that to the debate as a point of caution. The people of the Latrobe Valley are just starting to come to terms with what we are saying about the emissions trading scheme and the impact it may have on them and their families’ futures. Mr Nethercote also cautioned that Professor Garnaut’s predicted 40 per cent rise in electricity prices could be underestimating the real impact. Many speakers have made the same point. This is an enormous challenge and the complexity of the issues requires broader community understanding before we progress too much further down this path.

I certainly appreciate that the government is promising structural adjustment packages and compensation to affected households in its green paper. However, the sheer scope of the changes and the impacts are not properly understood in my community. As I said during my inaugural speech a few weeks ago, if we are prepared to give the planet the benefit of the doubt and we accept that climate change is real then we are going to need a strong and sustainable economy to deal with these challenges. We need to be tackling these challenges from a position of economic strength. I make that point in the context of the Gippsland Coastal Board report referring to the prospect of climate change and a 0.8-metre sea level rise. The board is forecasting events that would require the relocation of a range of highly valued public assets from the low-lying foreshore areas along the Gippsland coast. We will not achieve that unless we are in a strong financial position. If the Gippsland coast is exposed to inundation, large sections of the metropolitan coast will go under as well. It is a frightening prospect if these forecasts are accurate. All levels of government will have to work in partnership to address it. There is a lot riding on these very complex issues.

As the member for Gippsland, my focus is on the Latrobe Valley coal industry. We must retain the commercial viability of the brown coal industry in the valley because we need these companies to work in partnership with governments to invest in the cleaner coal technology that we all talk so much about. It requires a practical, rational and steady approach rather than some of the overblown rhetoric that we have been exposed to throughout the debate in recent times. Having access to an extraordinary natural resource like 500 years of brown coal is a competitive advantage for our nation, one we must be very careful to nurture in the future. Access to low-cost energy has underpinned growth in my region, and I make no apologies for standing up for the industry and for jobs in my region. We need to keep a firm sense of perspective in this debate.

Given that our nation’s contribution to global greenhouse gas emissions is less than two per cent, we need to be extremely mindful of the international effort and who we have on board in this process. Any policy that results in job losses in my region will have an adverse impact on every part of community life throughout Gippsland. I fear that regional communities like Gippsland are very much at the pointy end of government policy in relation to climate change. For us it is not an abstract debate about turning a few lights off or taking shorter showers. It is about jobs, families and the future of key industries like the power sector, agriculture and the oil and gas industry. As I mentioned, the Gippsland Basin is a major contributor to our nation and this bill has particular relevance to my region. The Longford gas plant, which is located about 10 kilometres from the city of Sale, is responsible for supplying most of Victoria’s gas requirements and about 20 per cent of Australia’s oil and gas supply. Gippsland has a long and proud history of providing resources for our nation, and the oil and gas industry is just one example.

Speaking of the history of the oil and gas industry, I note that 2009 will mark the 40th anniversary of oil and gas production from the Gippsland Basin by Esso Australia. It will certainly be a time of celebration and reflection on the company’s major role in the social, economic and cultural development of the region. I add cultural development quite deliberately because Esso has been a major contributor to community facilities in Gippsland, including the Wellington Entertainment Centre in Sale. Esso is highly regarded as a good corporate citizen in my region and the company is respected for its contributions to Gippsland and our nation. There are now 21 offshore platforms and installations in Bass Strait which feed a network of 600 kilometres of underwater pipelines and keep the oil and gas flowing 24 hours a day.

I digress for a moment to reflect on the fact that Gippslanders have not always enjoyed the direct benefits of the oil and gas industry. It does seem bizarre that many towns in my electorate, including my hometown of Lakes Entrance, have missed out on reticulated natural gas. It is an issue that I intend to work on hopefully in partnership with and with genuine support from the relevant state and federal ministers. This bill talks a lot about environmental issues. Natural gas provides a cheaper and more efficient energy source, which is particularly important for communities like Yarram in south Gippsland and Orbost and Lakes Entrance in the east. As we are all aware, we have an ageing population. The opportunity to provide cheaper and cleaner energy is a critical issue, particularly for older Gippslanders. Bottled gas is prohibitively expensive for those on pensions or low incomes and they are often left with the only alternative of wood heating, which obviously becomes a bigger issue in their advancing years. Natural gas reticulation to more towns in Gippsland is a challenge for the future that I hope the state and federal governments are willing to work with me to resolve. It is more environmentally friendly and has obvious economic benefits for my community. If we are able to build the eastern gas pipeline to take gas from Longford to Sydney, then we should be building the infrastructure to allow the economic and environmental benefits to flow to Gippsland communities along the route.

I am certainly pleased to say, however, that the state Labor government has provided natural gas to Bairnsdale. Under that state government program, we have seen real benefit to businesses such as Patties Foods in Bairnsdale and to the Bairnsdale Hospital. There is still more work to be done to continue the rollout of this very efficient and effective form of energy. I think allowing Gippsland to share in the benefits of the oil and gas industry in our region is an issue for us all. Having said that, although the direct benefits from oil and gas have not flowed directly to every household in Gippsland, I must stress that there have been overwhelming positives for my community. Oil and gas production in Bass Strait has contributed over $200 billion to gross domestic product over its life, and ExxonMobil’s Bass Strait operations have been responsible for generating approximately $300 billion in federal government revenue in real terms.

Another reason why I am standing here to debate this bill is that protecting the future of the oil and gas industry in Gippsland is so critical to us. I have had the opportunity in the past to view oil and gas production up close, and it is something I would encourage other members to do if they get the chance. The offshore platforms are quite remarkable places. They are both a work site and a home for up to 80 people at a time. The platforms operate in a hostile environment in Bass Strait but they are equipped with a few home comforts for the men and women when they are off duty—gymnasiums, rec rooms and those types of things. Having shared a meal with workers on a platform several years ago, I can attest to the fact that their kitchens are well equipped to meet the demands and the workers are well fed. Long may their vital work continue, along with that of their colleagues in the brown coal industry.

I would like to take up some points made by other members in their contribution to this debate. This bill provides for access rights for the geosequestration process. We will need to have appropriate systems in place to protect the rights of existing users. That obviously includes oil and gas producers. They must have the security to continue to invest with confidence. I have followed the debate with interest and I am heartened by the assurance of those opposite that there is certainty for investment in the future for the oil and gas sector. But for me in the Gippsland electorate there is also the issue of certainty for the commercial fishing industry, which is already finding it difficult to access fishing grounds due to the excised areas around oil and gas platforms. There is a potential layer of friction there in the future, which we will need to resolve. Further activity in the region—it might be related to this bill or it might be in relation to the oil and gas industry itself—is going to have an impact on the important role played by the Lakes Entrance fishing fleet in helping to feed our nation.

I agree with other members who have made the point that we really do need to get this legislative framework right and ensure that we do not discourage further investment in other industries with existing users in the offshore regions. I believe we are all very mindful of the need to act responsibly on this critical issue. In my mind, acting responsibly certainly includes protecting our energy security for the future. I commend the previous speakers and the Minister for Resources and Energy on the approach they have taken to this legislation. I also commend the previous minister for the work he undertook in this area. As I and many others have mentioned, there is no question that this is an incredibly complex area. I get the feeling that there will be many more debates on this and related topics in the months and years ahead.

Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008. This bill seeks to amend the Offshore Petroleum Act 2006. Before I go into the substance of what I want to say about this bill, can I first acknowledge the presence here today of pupils from Glenbrook Public School and Martin Luther Primary School, who are on visits to Canberra to see how our parliament works. I welcome them to this chamber and I hope they are having a very educative, interesting and fun time in our nation’s capital and in this great building. This is an important debate for those children to listen to because it goes to the whole issue of climate change and the future they will inherit.

This bill is part of a suite of legislation that the government has introduced to establish a carbon capture and storage framework. This suite of legislation also includes the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 and the Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008. The net effect of all of these bills will be to create a carbon capture and storage system in Australia that will ensure the long-term viability of our nation’s coal industry—and I want to come back to that in a little more detail in a moment. This suite of measures will also drive new technologies in our nation that will aid in reducing greenhouse gas emissions.

The principal bill relates to access and property rights for greenhouse gas injection and storage in Australia’s offshore waters. It also provides for a management system to ensure the safety and security of the greenhouse gas storage scheme. This legislation was put together acknowledging the need to balance the rights of the carbon capture and storage industry and those of the existing petroleum industry. It will also provide certainty to this fledgling industry, the carbon capture and storage industry. In providing that security, most importantly it will provide for a framework which encourages investment in that new industry. It will also assure the community that the techniques used for the capture and storage of carbon dioxide are safe and secure.

The process of carbon capture and storage involves capturing greenhouse gas emissions before they are released into the atmosphere and storing them in geological formations which, in broad terms, are similar to the kinds of geological formations which have stored oil and gas for millions of years. This process, which is known as carbon dioxide geosequestration, is not new. For example, in Canada and Poland carbon dioxide injection systems are currently being used to enhance oil recovery and assist with coal extraction. In Algeria, naturally occurring carbon dioxide is being extracted from natural gas and then reinjected into gas reservoirs. For over 10 years carbon dioxide has been safely stored 900 metres under the North Sea in a deep saline formation. The monitoring of that project in particular has demonstrated the overall successful dispersion and trapping of gas within that formation and the safe means of doing that.

As well, in our country we have afoot a pilot program of injecting carbon dioxide into geological formations of the type I have described. That is occurring not far from my electorate, in the Otway Basin. This is a project that was conceived in 2006, and the injection of carbon dioxide into that formation commenced in April this year. The project is being managed by the Cooperative Research Centre for Greenhouse Gas Technologies. What it seeks to prove, in a sense, is that there can be the safe transportation and injection of up to 100,000 tonnes of carbon dioxide into the depleted Waarre reservoir at a depth of approximately 2,000 metres. This project is principally about trying to prove the concept, so from that point of view it will involve a comprehensive monitoring regime to provide valuable information on how this technique can be applied and on the additional further development of this technology. The International Energy Agency predicts that carbon capture and storage will ultimately become the second most important means by which we can significantly cut greenhouse gas emissions globally. It will rank behind improved energy efficiency. So it is a critically important technology that we have to develop in this country to not only provide for the viability of the coal industry but to take our country into a postcarbon world.

This bill forms part of the government’s overall climate change policy response. It is important that is placed on the record in the context of this bill. The Rudd government, unlike how the opposition has flipped and flopped on this issue whilst in government and then in opposition, clearly accepts that our climate is being changed as a result of human causes. For that reason, the first act of this government was to sign the Kyoto protocol. We have introduced water-saving measures, we have put in place emissions targets and we have announced a Carbon Pollution Reduction Scheme through the green paper which was announced a month or two ago. That scheme, which has now been outlined in some detail as a government proposition, is the subject of a very extensive consultative process with the community and business.

This is a very difficult debate but it is a debate that our nation needs to have. I agree very much with the comments of the member for Gippsland when he said this is a particular issue affecting regional Australia. I think it is indeed right that in industrial regional Australia we find ourselves at the front line of the greenhouse and climate change debate. Industrial regional Australia is principally located around the coast of our country. In that sense, it stands to feel absolutely the effects of climate change in rising sea levels and a changing coastline.

We in the south-east corner of this country are in a part of Australia—and indeed a part of the globe—where rainfall is predicted to decline as a result of climate change. While we are very much on the front line in that sense, we who live in industrial centres also feel the responsibility to contribute to any future emissions trading scheme. That is very much the case with the city of Geelong, in which there are very many carbon dependent businesses. We have refineries, aluminium smelters, cement works and car plants. All of these are carbon based industries and they would feel absolutely the effects of contributing to an emissions trading scheme. What flows from that is an acute understanding that we as a country must do something about climate change and that we must orientate our economy to a postcarbon world. But there is also a significant awareness that the way in which we do that has to be very careful, with a great deal of consultation, and that we must get it right. It is for that reason that I feel very secure over the path that has been taken by this government in outlining a proposed scheme and engaging in very significant consultation—and it has—with industry and community groups to take us to that point.

Our stance on climate change is clear: we know it is happening, we need to change our economy and we need to orientate our economy to a postcarbon world—and we are walking down that path. By contrast, the opposition’s current stance on this issue is anything but clear. They have been flip-flopping on this issue for the better part of 12 years. There are still many on the other side of the House who are sceptical, firstly, about whether or not the climate is actually changing as a result of human causes and, secondly—if it is—about whether there are any consequences of that. They have no clear policy on whether or not an emissions trading scheme should be put in place and on when it should be put in place. We are all waiting with bated breath to see whether or not that policy is going to change again as a result of the recent change in the leadership of the Liberal Party—and they are still flip-flopping on the issue of nuclear power.

The legacy from the time when they were in government is not much better. Over the last 12 years the Howard government did little to meet the challenges of climate change. They did virtually nothing to save our nation’s waterways. They did nothing to assist industry to transition to carbon-neutral technology and to a postcarbon world.

Last year the then shadow minister for national development, resources and energy, Senator Chris Evans, asked the Department of Industry, Tourism and Resources about the total funding that had been provided between 2004 and 2007 for the purpose of research, development and demonstration of clean coal technologies. What he found in answer to that question was that a measly total of $3.4 million had been spent to that date on research, development and demonstration of clean coal technologies and that a further $2.27 million, to be spent by the end of this year, had been allocated for Commercial Ready projects. That stands in stark contrast to the half a billion dollar commitment that the Rudd government has made to put in place clean coal technologies. And that commitment has been made because the Rudd government understands the need for industry to meet the challenge of climate change and the transition to a postcarbon world.

In terms of providing our energy in a postcarbon world, coal will inevitably play a critical part in Australia’s future energy needs and will be a key contributor to our nation’s future prosperity. The coal industry is Australia’s largest exporter, generating $22½ billion in export income in the financial year 2006-2007. In 2005 there were 105 coalmines in Australia; in 2006 there were 118 coalmines. In 2006 the coal industry employed at its peak 32,259 Australians, and new coal projects and expansions as of October 2007 in Australia are forecast to have capital expenditure of around $23 billion. Coal provides 80 per cent of Australia’s electricity, and coal generators globally provide 40 per cent of the globe’s energy needs. Indeed, the International Energy Agency forecasts that the global use of coal will increase by 44 per cent through to the year 2030. As I said, in Geelong we very much feel the significance that coal plays in our economy, particularly if we look at, say, the Alcoa smelter at Point Henry, which in large measure seeks energy from its own coal-fired power station at Anglesea.

To ensure the continued viability of this industry in a postcarbon world it is essential that this industry comes to terms with carbon capture and storage. For that reason, the government has already established a $500 million National Low Emissions Coal Fund to support development of clean coal technologies, and in combination with that the coal industry itself has already funded a similar fund of $1 billion known as the COAL21 initiative. By developing emissions reduction techniques such as carbon capture and storage our country will ensure the future of the Australian coal industry.

In relation to that, this bill provides for new offshore titles, which in turn provide for the transportation and storage of carbon dioxide and potentially other greenhouse gases in offshore geological formations. These titles will be located between the outer limits of Australia’s coastal waters; that is, three nautical miles off the coast and the Australian continental shelf. The legislation sets up a regime of precommencement titles and postcommencement titles. The commencement that is being referred to in those terms is of course the commencement of this bill. Precommencement titles, therefore, by definition will be only existing petroleum titles. Postcommencement titles will be both petroleum titles and titles for companies which are seeking to put greenhouse gases into these geological formations.

The way the regime will work is that if, when a postcommencement greenhouse title is provided to a new developer to inject carbon dioxide into these geological formations, there is a significant risk or a significant adverse impact on an existing precommencement petroleum title, this will not be able to go ahead without the holder of the precommencement petroleum title’s consent. So in that sense the rights of existing holders of petroleum titles will be protected. In terms of postcommencement titles for both petroleum and greenhouse injection, before a licence is granted the minister will need to look at the potential impact of that licence and whether or not it might impact on the other kind of licence—that is to say, whether a greenhouse gas licence has a potential impact on a future petroleum licence or vice versa—and that will form part of the assessment by which the licence is ultimately given. In that sense the bill protects and balances the rights of existing licence holders with those of future licence holders.

The bill also puts in place powers for the minister in the event that there are any future issues associated with the capture and storage of carbon dioxide and other greenhouse gases. It does this by defining the term ‘serious situations’. ‘Serious situations’ is where there is a leakage of greenhouse gas substances from an identified geological formation or where the injected greenhouse gases are not behaving in the way which was predicted or where the injection of those gases is compromising the geotechnical integrity of the geological formation. When that occurs, the minister is given a range of powers, in essence, to deal with that serious situation. Those powers include ceasing or suspending the injection of carbon dioxide into the formation, or indeed requiring that it be injected into another formation, and any other orders or directions which are required of the licence holder to deal with that serious situation. Liability for any future issues which might arise out of this technology will be dealt with in the same way as liability is dealt with throughout our society—that is, through the common law.

The suite of provisions within this bill does balance the rights of new carbon capture and storage industry licence holders with those of existing petroleum industry licence holders. It will provide some certainty to this new industry, which in turn ought to encourage investment, and it will assure the community that these techniques are safe and that the capture and storage of carbon dioxide in these formations is an appropriate and safe technique to use.

As the Minister for Resources and Energy noted in his second reading speech on this bill, there are already businesses out there which are readying themselves to use this technology, and indeed they have been for some time. That highlights the importance one can attach to the seriousness of the Rudd government in assisting our nation’s industries in their transition to a postcarbon world. Now is the time for action on climate change, not the flip-flopping or half measures that we have seen for the last 12 years, and that is what this bill will do. There is a moral aspect to climate change but there is also a smartness about it. Putting in place carbon capture and storage is not only the moral thing to do but the smart thing to do. If we can reduce coal’s footprint in the long term then we will go a long way to securing out nation’s economy in a postcarbon world.

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

It is with pleasure that I speak to the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and cognate bills. I was interested in some of the comments that the member for Corio made in his contribution. For his interest and the interest of others, I recently had a meeting with the Guyra tomato producers, and the Costa family, who are constituents of the member for Corio, are very much involved in that particular operation. How that relates to the bill is that in that particular greenhouse operation—I guess there is a bit of a play on the word ‘greenhouse’—they are capturing carbon dioxide and injecting it during the growth of the tomato, generating increased growth.

I think there are a number of opportunities in relation to the so-called climate change-greenhouse gas issue. Coming from an agricultural area, I think that rather than looking at it and saying, ‘It’s a bit hard; it will not work unless the Indians and the Chinese are involved; why should we do anything when no-one else is?’ we should look at the opportunities that Australia has to be a pioneer in this area. I would rather be remembered as a parliamentarian who actually tried to do something about it than have my grandchildren look back in 50 years time and say—as we are saying about the Murray-Darling—‘Why didn’t they do something about it?’

I do not think the costs will be as great as many people believe, because I think there is a degree of ingenuity that we have not engaged in in respect of the research and technology of these particular issues. Irrespective of the costs it is something that we do need to address. We should be able to look back in 50 years time and say: ‘At least we got something right. We did try to address a particular issue.’

This legislation sets up a framework where, as the member for Corio said, greenhouse gases will be stored off the coast of Australia. Currently, we cannot do that. We do not have the technology to do that. I thought the member for Groom spelt out this morning some of the issues concerning the cost of initiating some of those programs. This is enabling legislation to ensure that, when we are able to sequester carbon or store carbon in some of the geological structures offshore, we have a process to do that properly. In my view, this is pioneering legislation. A number of people mentioned that. It is, essentially, a world first and there may well be problems.

I am pleased that the Minister for Resources and Energy, Martin Ferguson, is here in the chamber. I know he listens to all the speeches. I congratulate him for being a pioneer in another way. Those in the gallery are probably not aware of this, and they probably think that the parliament, particularly in question time, is all about people arguing with one another and trying to pick holes in each other’s argument. But this minister actually brought some legislation into the parliament and then he referred it to a committee. The House of Representatives Standing Committee on Primary Industries and Resources is made up of members from the Liberals, Labor, the Nationals and me as an Independent. The minister asked the committee—in a sense, a microcosm of the parliament—to examine the legislation to see whether it could be improved, rather than what quite often occurs in this place whereby a bill is introduced, the arguments develop on how it could be improved and, if an amendment is accepted, it is then seen to be a failure on behalf of the minister, or the government may not accept it. So I congratulate the minister. It is the first time that that has happened since I have been in this parliament. I do not think it happens very often. If we do embrace climate change, perhaps the government would like to look at this process more often.

I know other members of the AFFA committee who have made comments in the Main Committee have alluded to the minister’s initiative of asking a committee of the parliament to consider legislation and hopefully improve it. The minister has accepted some of the recommendations that are in the report entitled Down under: greenhouse gas storage. I thank the committee chair for the great work that he has done on carbon sequestration.

I guess we all have a view on global warming and on how an emissions trading scheme will work. We all have a view on what should be in and what should be out. But one thing I would like to raise particularly is the role of agriculture as a potential solution to this issue. I know the Prime Minister, the Minister for Agriculture, Fisheries and Forestry and others in the parliament have raised it at times. But our soils—I am pleased the Prime Minister is here now—could well be part of the natural sequestration of carbon solution.

Mr Tony Burke (Watson, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Hear, hear!

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

The minister for agriculture says, ‘Hear, hear!’ as he goes past. I thank him for that endorsement. I would suggest to the minister that there is a lot more work that needs to be done on the potential role that agriculture has. Obviously agriculture is an emitter, and a lot of people are suggesting that, because of the Kyoto arrangements, agriculture should stay out of the debate. I would suggest it is important that agriculture does engage in the debate and that agriculture, given some further research et cetera, may well be part of the solution to the problem.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour and the member for New England will have leave to continue speaking when the debate is resumed.