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

I rise today to speak on the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009. The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill seeks to correct omissions in the act, which came into effect in November 2008, and also is intended to make a number of technical corrections, including to references to the act in other legislation. By way of background, the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 provides for the injection and geological storage of greenhouse gas substances in Australia’s offshore areas—that is, those covered by the Commonwealth. The bill will provide for access and property rights for greenhouse gas injection and storage.

Despite the constant assertions by the Prime Minister and the current government that the Howard government did nothing on greenhouse gas emissions, the fact of the matter is quite the contrary, and I was pleased that the Prime Minister finally acknowledged that in the House yesterday. I am surprised the Prime Minister had trouble saying ‘$3 billion’, because the ‘billions of dollars’ figures tend to roll off their tongues these days like they were just lolly money. But in the main chamber yesterday the Prime Minister did admit that the Howard government had allocated $3 billion to lowering greenhouse gas emissions in Australia.

The work that has been done to date on lowering greenhouse gas emissions in Australia was done by the previous government. That is a fact. The money that has been put into solar energy, the money that has been put into carbon capture and storage, the money that has been put into better efficiencies in coal fired power stations, the money that has been put into looking at ways in which we can improve the combustion of coal—the money that has gone into all those projects came from the previous government.

It has taken the government 18 months to allocate money for new projects. As yet, no major sums of money have been spent building anything. There has been a great deal of talk—and I know that many would not be surprised by that fact—about what the government are doing about greenhouse gas emissions. But the reality is that they sign things, they initiate reports, they establish a new institute that duplicates the previous institute and they do round-the-world trips talking about what they are going to do. They say they are going to do a lot, but they have not done anything.

The reality is, as is the case with this legislation which began development in 2005 under the previous government, that it is one of the real initiatives that will make a difference. I do commend the government for the work it is doing to ensure this bill operates correctly, but it highlights that bills of this nature—and this one is relatively simple—will continue to need amendment to ensure that they work. I will come back to that point a bit later.

The provisions of this bill will authorise the injection and storage of greenhouse gas substances, as I say, in offshore waters. This means in essence the capture of carbon dioxide together with any substances incidentally derived from the capture or injection and storage process with the permitted and required addition of chemical detention agents to assist in the tracing of the injected greenhouse gas. What that means in layman’s terms is that, when you bury this gas and sequester it in the ground in these subterranean reservoirs or storage spaces, there will be a gas agent that will be put in there that can be traced so that we will know if that storage is leaking.

I cannot emphasise how important this legislation is in regard to where we go in Australia, in particular in regard to the use of zero-emission coal fired power stations. Again, this government has said a lot about that but has not yet put any money into building one. I see it is allocated and I thank the Minister for Resources and Energy for providing me with a briefing yesterday, but what it says is that still this government is not providing enough money to build a series of zero-emission coal fired power stations. We have heard figures bounced around by the Prime Minister of somewhere between two, four and eight of these power stations being built by 2020.

Let me apprise the House of what one of these power stations will cost. It will cost around $3 billion—about as much as a nuclear power station. They are an extremely expensive piece of kit. They are arguably almost double what it would cost to build the same size power station conventionally, as we call it, even using the latest super- and ultra-critical boilers. These power stations are not efficient by nature—30 per cent of the energy they produce goes into capturing and storing the CO2. That CO2, as I mentioned, will be stored in these subterranean reservoirs.

What we all need to understand about carbon capture and storage in relation to zero-emission coal is that it is extraordinarily expensive to build these power stations and extraordinarily expensive to run them. What the government is not telling the people of Australia is that the price of electricity ex the power station will treble. It will go up threefold under their greenhouse gas emission program. Between the carbon price and the actual physical cost of building and running one of these power stations, people in Australia need to be aware that the price of electricity at the power station will treble. No-one is arguing with that figure. The figure is generally accepted to be in excess of $120 a megawatt hour, it is $40 currently and it is possible and accepted that the figure could in fact be as high as $150 a megawatt hour.

That will bring into focus some of the folly of what this government is trying to do with the pittance that it has put into this technology in the 18 months that it has been in power. I say pittance as a relative term, but we need to understand that under the program which the government boasts about of somewhere between two and eight power stations having this technology by 2020 that, in fact, each of those power stations have a commercial shortfall or an economic gap, as they call it, of around $1 billion. And there is nothing that the government has announced to date that will cover that gap. Having covered that construction cost, they then need to be honest with the Australian people about what their electricity bills are going to be.

Industry have got it worked out. They know that, between the CPRS, the rent and the actual cost of building these power stations, their power bills are going to go up significantly, and one of the great natural advantages that Australia has had as a country will be lost forever. Before any of our competitors move to this sort of regime, before we even know what any of our trade competitors are doing, Australia will be locked in through this ridiculous, poorly thought out CPRS to committing Australian consumers, in the case of industry, to an uneconomical price of electricity for those high-level consumers.

We need at some stage to see the government be honest about the challenge that lies in front of them. Can I start by suggesting that they look at this publication, Powering Australia: the business of electricity supply. It has a wonderful photo on the front of a wind energy power station. I know there are some—not me, because I have an engineering eye, being an ex-farmer and someone with that sort of bent—who would say, ‘You have polluted the landscape with wind farms.’ I am not of that ilk. I believe wind farms, along with other forms of renewable energy, have an important role to play, but we need to understand that, given the remoteness of that power station, there are going to be added costs in transmission and energy lost, along with the fact that wind energy costs twice as much as coal energy now. We need to understand that, in terms of cost reduction, that technology is not going to see that figure alter dramatically.

Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

That is one of the reasons why we want to put a price on carbon.

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

Well, that is exactly the point I have been making. Obviously you were not listening to what I was saying, but I will come back to your point—

Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

Ms Jackson interjecting

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

Which camp are you in?

Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

Ms Jackson interjecting

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

The member for Groom has the call.

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

I have done more on lowering greenhouse gas emissions than you have. If you want me to run through it, I am happy to give you a briefing on what I actually did in six years and what the environment ministers that I worked with for six years actually did, and then you can sit down with me with your environment minister and your other minister and you can compare notes. I tell you what: you are a couple of billion dollars behind—a lot of talk ahead, but a couple of billion dollars behind. We have actually put things on the ground, which you are yet to do.

Coming back to the issue, whilst wind, solar, geothermal, wave and perhaps tidal have a role to play, Australia, as defined in this report, needs to build a thousand megawatts of electricity power stations every year from now until 2020. We need to know from the government how many of those power stations they actually think—not the ones they put in their speeches, not the ones they give in their media spin—will be coal fired power stations, how many of them will actually use this legislation, which is so critical to their survival, and then on what basis they will then tell the people what the price of electricity will be. What is all this going to cost the average person and the average household?

While they are doing that and they are putting together their legislation, they should also address a couple of other issues in relation to the Carbon Pollution Reduction Scheme and coal-fired power stations. They should acknowledge some of the points made by the Energy Supply Association of Australia, who actually know what is going on in energy supply. They should take very careful note of these four points, which the Energy Supply Association were talking to members of parliament about over the last couple of weeks.

The first point is that there needs to be something done by this government to protect the balance sheets of stranded coal-fired generators through the allocation of additional permits. The way power stations are being currently treated by the CPRS, they will close, and the members opposite need to explain to their constituents what happens when the first coal-fired power station in Victoria closes in 2015. What is actually going to replace that baseload power? That is only six years away. That does not give enough time for a power station to be built that can use the legislation that we are discussing. What is actually going to replace that power station?

We need to know how the government is going to protect the balance sheets of these coal-fired power stations. We need to know if the government is going to deliver 10 years of firm emission caps to these power stations followed by a 10-year emission target range. Is it going to ensure that these power stations can convince the people who finance them, who lend them the billions of dollars to keep these power stations running, of what projections, costs and income these power stations have got?

I need to emphasise that these power stations are not financed once in their lifetime; they regularly roll over their finance and refinance at various times. As anyone who knows anything about the power industry will know, these power stations are currently going through a round of refinancing. Some of the larger power stations will again be borrowing billions of dollars, at a time—as we are constantly reminded—of very, very tight lending. This money is borrowed both domestically and overseas. That borrowing capacity, which is already hindered significantly by the global financial crisis, will be made significantly more difficult by the CPRS.

We need to ensure that the CPRS provides future settled contracts at permit auctions to enable liable entities to manage cash flows. There is going to be an enormous amount of money being paid by these power stations in advance. That is a cash-flow issue in the millions and millions of dollars. Power stations, in some cases, will need to secure up to $10 billion worth of permits to continue to operate—that is $10 billion over and above the money they are drawing out of their normal refinancing regimes. Ten billion dollars—that is a lot of money. Even in the Prime Minister’s language that is a lot of money. We need to give these power generators the certainty they need or they will simply not continue to operate.

We need the government to provide some assurance to coal-fired power stations that they will have a place in the future. This legislation is a very important part of that. It is a very important part of that because it not only provides the ability for carbon sequestration from land-based power stations, but it also provides the framework, in terms of what the state governments do. In that regard I am less optimistic, because the state governments, encumbered by huge debts, are looking with an eye of complete confusion on this issue. Looking at states like Queensland and New South Wales and Victoria, who rely so heavily on coal-fired power stations, I can only express disappointment in the way they are handling this issue.

That disappointment, of course, does not stop there. We see a ridiculous situation where, despite the grand claims of this government, the Prime Minister’s own legislation does not take into account those first attempts at carbon capture and storage by power stations. We are seeing proponents like ZeroGen refused further assistance by both the state Queensland government—and I will not start on that or I’ll be here all day—and the federal government. We are still not sure if, under their new proposal, that project will get any money.

What we do know for sure is that, despite this legislation, these new leading-edge projects will not get off the ground. This is because of the simple fact that this government, under its CPRS which has not got a practical line in the whole legislation, will simply tax these projects out of business through a carbon emission price. And when I say tax I mean that, when you do not have the technology to lower your greenhouse gas emissions any further, your emissions are still priced and you have to pay that price—and that is a tax. You have no way of avoiding it. It is as certain as birth and death.

We have seen a ridiculous situation where ZeroGen—whose project aims at using this legislation to reduce greenhouse gas emissions by 60 per cent from power stations and sequester carbon—still have to pay for the carbon for their pilot plant. Is this government fair dinkum about progressing zero-emission coal in Australia? Or is it, like a lot of what it does, just hot air? We have seen continual reference by this government to how important zero-emission coal is, but we have not seen any real action—a lot of talk; not much action. The government is very good at setting up another institute, particularly if the Prime Minister is about to go overseas, but at no time have we seen what it will actually do to get these power stations built. There is a number between two and eight that floats around, depending on who the audience is.

We need to understand that there are none of these power stations operating in the world on a commercial basis now—zero. Nil. Zero. In the six years I was the Minister for Industry, Tourism and Resources, a great deal of money—real money, taxpayers’ money, hundreds of millions of dollars—was spent by the then government to progress this issue. We are still no closer now than we were five years ago, so we need to see this government get fair dinkum about it.

Along with that, as a result of the CPRS, as this legislation comes into practice, as the cost of storing carbon gets added to the price of electricity and as the price of the carbon that is emitted is charged at the carbon price, we need to see what this government is actually going to do to keep jobs in Australia. There is a lot of talk about jobs by this government. The reality is that unemployment is going to rise significantly and perhaps double over the next 18 months. Those are not my figures; they are economists’ figures. The member who spoke previously, who was here with me, showed me the latest economic predictions. They were being made by the same people who, 12 months ago, were predicting a bright future for Australia. What the economic picture seems to be, though—and there is no certainty of this—is that things will get tougher and jobs in Australia will be lost. At that point in time, you would think that a government that is fair dinkum about jobs—as it seems to be fair dinkum about carbon storage—would be making sure that this legislation, when put into practice, did not cost jobs in Australia through increased costs to business.

There is no evidence to support that. There is no evidence to support that the government has any understanding of the fact that trade-exposed energy-intensive industry will simply move overseas—that industries like aluminium, for instance, will simply not expand in Australia and that they will run down their physical assets to the point where they are no longer economical to run, in a cash-flow sense, and they will close. Who knows how long that will take? Maybe it will be 20 or 30 years, or 40 years, if we are lucky. In the meantime, we will see no more of those industries come to Australia. We will see no more pipelines for the Tomago aluminium smelter at Newcastle and no jobs for the people that will be thrown out of work in the resources industry or the coal industry as it is shut down by this government.

It gets worse than that, because this week we have seen the release by the Australian Chamber of Commerce and Industry of the effect that the CPRS will have on small business. It is sobering reading:

As a consequence—

of the CPRS and its effect on the small business sector—

trade-exposed SMEs have limited opportunities to pass the costs on …

We on this side of the House understand that explicitly. We know business because we are in it. We have done it. We are very good at businesses. We on this side of the House understand business. We know how to make money; those on the other side of the House know how to spend money. But as this report goes on, these businesses ‘have no way to pass on costs to their customers’:

… but are not eligible for assistance under the proposed CPRS transition package.

Increases in energy and transport costs will impact directly on SME employment and profitability.

Employment—does that word ring a bell? It rings a bell over here. It goes on:

The study finds that the CPRS in its current form will generate additional costs that would erode firm profitability by between 4 to 7 per cent …

This is at a time when many economists are still predicting Australia will go into recession. We may have dodged the bullet last time. There is some suggestion that we may escape, but there is more suggestion that we still have a recession in front of us. The report continues:

… the study shows that firms would likely need to reduce labour costs—

labour costs—does that ring a bell over the other side? It sounds like jobs going to me. Labour costs would need to reduce:

… by between:

• 4.4 per cent … and 8.1 per cent … on average for food processing SMEs;
• 7.4 per cent … and 12.9 per cent … on average for plastic manufacturing SMEs …

I still do not have an answer from the minister for industry about how he expects Australian car manufacturers to compete. Plastic is a big component of Australian cars, along with electronics and steel. Steel and plastics will be subjected to the CPRS, and plastics with no compensation, and the manufacturers will be competing against the Americans, not to mention the Japanese, the Chinese, the Thais and the Europeans—although the European cars, while they are very good, always lose a slight competitive edge because of the location. But Australian manufacturers will still have to compete, particularly with the Koreans, the Chinese, the Japanese, the Americans and the Thais. Car manufacturers in Australia will be paying this price on plastics, trying to compete with manufacturers in other countries. Again we hear this government say they are fair dinkum about a car industry, but they are quite happy to put it out of business with the CPRS.

I will finish with these last few numbers. The chemicals manufacturing industry will have to reduce labour costs by between 1.8 and 3.2 per cent, and in the machinery and equipment manufacturing sector, which would include the car industry, we are going to have to see a 1.8 to three per cent cut in labour costs. Despite this legislation, despite the work that our government did when we were in office, the CPRS is going to destroy industry in Australia—not just the aluminium industry, not just the cement industry, not just the smelting industry but industries right down in the electorates of the people who sit over there.

What we need is some honesty from this government. We need to see a situation where they will actually ensure that this legislation works—and, as I said, I commend the minister for his efforts on this. He is ensuring that, from his perspective, the legislation to sequester carbon is as good as it can be. There may be further work that needs to be done on it, and therein lies the salient point. As this opposition cooperates with the Minister for Resources and Energy to ensure that this small, simple piece of legislation which constantly needs amendments is amended to make sure it works, we draw the comparison to what it will be like trying to amend a CPRS that is basically flawed. This legislation is basically right. When it was introduced in 2005, it was basically right, but it needs a bit of tinkering. Here we are, four years later, doing that in good faith with the minister. What is it going to be like when we, the people responsible for the economic and social future of Australia, have to try and do the same for the CPRS? It will be full of politics, full of false promises, full of potential to destroy Australia’s economic future.

We will do our best. We were a government with a record of reducing greenhouse gas emissions. We reduced greenhouse gas emissions per megawatt hour of electricity produced. We did that. It will never be acknowledged over there. We gave the renewable energy sector a start. We were the ones who introduced the MRET, and it was working.

What we are seeing from this government is a lot of talk, a lot of rush and a lot of politics about the CPRS. Using this legislation as a comparison, we should be very, very afraid of what the CPRS is going to do. It will be flawed from the day it is introduced. It will require constant amendment. We probably will not find out what the Americans are doing until after Copenhagen. The Waxman-Markey bill has to get through firstly the Democrats, then the Republicans and then the congress. The senate runs a parallel process. When it does get through, we will have some idea of what we are up against there. We may then also have some idea of what we are up against with our trade competitors in Europe and Japan. We will still have absolutely no idea with regard to China, Korea, Thailand, India or a list of other countries which will give us competition in the industry sector which we will not be able to deal with and which will cost jobs here in Australia.

Sharryn Jackson (Hasluck, Australian Labor Party) Share this | Link to this | Hansard source

Like the shadow minister, I rise to support the legislation before the House, the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009. As the shadow minister has identified, both pieces of legislation largely deal with technical and minor amendments which streamline requirements, provide clarification or reduce the overall regulatory burden on industry. These changes result primarily from three reviews of different aspects of the offshore petroleum regulatory system which have been conducted by the Department of Resources, Energy and Tourism over the past couple of years. Some of the amendments to the Offshore Petroleum and Greenhouse Gas Storage Act also arise as a result of amendments to the legislation in the Senate.

I can reassure the chamber that there are no adverse effects on industry from these bills, or indeed any additional costs. It is interesting to see so many Western Australian members in the Main Committee at the moment. I think it is important to acknowledge how enormously significant the offshore petroleum industry in Western Australia is, not only to our state but to Australia generally. In the Western Australian economy, it is a $19.4 billion sector. About 69 per cent of Australia’s natural gas production and 70 per cent of crude oil and condensate production are located in Western Australia. Seventy-two per cent of Australia’s petroleum exploration expenditure in 2008 was spent in Western Australia.

The industry creates significant wealth for the country, including through the employment of tens of thousands of Australians, some of whom are resident in my electorate of Hasluck. The industry underpins the revenue collection of governments and generates valuable export revenue. Particularly in the case of gas, it is also wonderful at replacing costly imported petroleum. It is a strong and vibrant industry and it is essential to the ongoing health of the Australian economy.

Gas activities have been impacted by the economic downturn, with LNG imports having fallen in some countries and investment in production infrastructure having been delayed or deferred as a result of falling investment in gas based processing projects in Australia, although I think the long-term outlook is good and LNG demand, in particular in the Asia-Pacific region, is expected to continue to increase. It may not increase at the growth rates previously envisaged, but I do think it will be a very positive future.

I note in particular Woodside and the current Pluto project in the north-west of Western Australia, which is currently employing some 3,000 people—soon to increase to 4,500 in September-October this year. It is pleasing to see that sort of project development continuing even when there are significant pressures in the international economy. We know what enormous potential these gas projects provide to Australia, particularly in the areas of employment creation, investment and long-term infrastructure, with improvements in government revenues being perhaps amongst the most tangible.

I know that the government is acting now to help Australian business prepare for the economic recovery and it is looking at ways in which we can introduce reforms and make other changes that will promote investment in the Australian gas and mineral resources sector. In this area I would especially acknowledge the work of the Minister for Resources and Energy, the Hon. Martin Ferguson. It is quite clear that our role as a government in these circumstances is to look at what reforms we can make to best prepare Australian business for economic recovery. As the minister said in a media statement on 9 April 2009:

Our role in the present economic climate is to deliver micro-economic reforms that get rid of red tape, reduce the cost of regulation, simplify the tax system, and get the balance right between taxation of production and consumption, investment and savings.

In other words, we also need to ensure that we do the right thing by preparing the Australian workforce for the skills and jobs of the future in these industries.

I have said how important this industry is to the Western Australian and Australian economies. I was also pleased to see the minister announce earlier this month the release of some 31 new offshore petroleum exploration areas and two special areas in Commonwealth waters. I think that is a reflection that you cannot promote project development opportunities in these industries without ensuring that you have a strong exploration industry. That is where project development opportunities come from, and I am pleased to see that those additional offshore exploration areas have been identified.

Most pleasing for me was the release of the retention lease discussion paper a couple of weeks ago. I think it is a timely discussion to have in this sector. Yes, we have these wonderful resources available but we have to actually make sure that where companies have those leases they do eventually use them. I was interested to see the minister’s media release when he released the discussion paper. He said:

The challenge we face is to realign the national interest of Australia with the commercial interest of investors. I have already flagged that my Department and I will apply a ‘use it or lose it’ principle to retention lease applications. That means we will rigorously apply the commerciality test to ensure gas fields are developed at the earliest possible time.

The government remains strongly committed not only to open and transparent investment regimes and to looking at ways to promote project development in Australia but also to keeping the balance right with the national interest. I commend the minister on his agenda and on the progress to date in these areas.

One aspect of the legislation deals with changes to the safety regulations covering pipelines. This will see pipelines being treated on the same basis as other facilities under the safety regulations and will see the removal of pipeline management plans and pipeline safety management plans from regulations. As such, the pipeline safety management plan levy will become a safety case levy. These changes in levy arrangements are set out in the bills, with amendments to the Offshore Petroleum and Greenhouse Gas Storage Act and the safety levies act.

I think this is a positive change. I would make the general observation that this amendment ultimately will ensure that all facilities, including pipelines, will come under the general oversight or regulation of the National Offshore Petroleum Safety Authority, and I think this is a good thing. It is certainly something that has been recommended in the past, by reviews during 2007. From a Western Australian perspective, having lived through the aftermath of the Varanus Island pipeline explosion in 2008—its terrible consequences in terms of the impact on business as well as domestic consumers—it is my hope that the changes to this legislation in this regard will see a better system put in place for dealing with safety and the like in these areas. So I commend and support those changes.

There are also changes in the legislation dealing with an expedited consultation process on the granting of access authorities and making the joint authority the decision maker in relation to declarations of location and granting of scientific investigation consents. All of these changes are designed to streamline current arrangements and to ensure that the requirements of the act become less onerous and that there is less duplication. I think we all commend legislation which reduces a red-tape or regulatory burden. Again, I think this is a positive step in the right direction for these industries.

The legislation also gives the Commonwealth government a role in the declaration of a petroleum location, which leads to an application for either a retention lease or a production licence. These decisions will be made by the joint authority. This is entirely appropriate, given that some of the exploration leases are over Commonwealth waters, and in line with the United Nations Convention on the Law of the Sea.

The changes to the greenhouse gas storage provisions of the act are to remove several inconsistencies and ambiguities arising from amendments made in the Senate. These changes are purely technical and make no policy changes to greenhouse gas storage related operations—although they do provide me with an opportunity to congratulate the Rudd government on the Global Carbon Capture and Storage Institute that was launched earlier this year. We know from media and other reports that this initiative has received strong and widespread international support. It is consistent with the government’s climate change strategy, which is designed not only to reduce our carbon pollution but also to help us adapt to the impact of climate change. We have to be involved in finding a global solution to the issues associated with climate change. I look forward to reading more about the Global Carbon Capture and Storage Institute. As I said, it has received significant support globally, and of course we have seen a significant budget allocation to accelerate the deployment of carbon capture and storage projects globally.

As I indicated, most of the amendments in this legislation are quite small, but together they will improve the effectiveness of the act and further streamline regulations. I commend the bills to the House.

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

These bills, the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009, make amendments that are primarily technical but nevertheless deal with one of the great issues under debate in this House at this time—that is, the various aspects of greenhouse gas emissions and particularly, on this occasion, greenhouse gas storage. I find that a matter of great interest.

It is also of interest that, when one consults the explanatory memorandum to the Offshore Petroleum Greenhouse Gas Storage Legislation Amendment Bill, under items 41 to 49 there is significant reference to, and extensive advice regarding, negligence as a fault in the criminal code that applies to certain matters of occupational health and safety. This is an ongoing trend in laying blame for negligence, particularly negligence by employers or other people in a position of responsibility, as part of protecting people and the generation of a safe environment.

I will take the opportunity to draw to the House’s attention the well-reported fact that we have an ongoing royal commission in Victoria relating to the tragic wildfires that occurred there last February. I have made a submission to that inquiry, but I have not yet had a phone call: ‘When are you coming to expand on your views, Mr Tuckey?’ It is all about the responsibility of the owner of the property to maintain a safe environment. I go as far as to say that blame must be apportioned.

If the government of Victoria were a corporation, there would be no doubt that the members of the Parliament, as board of directors, would be currently being charged with criminal acts, because they ignored all the science of a hundred years or, if you like, of centuries of known and recorded Aboriginal practice. It happens to be a Labor government that is there now and they have been there long enough to have fixed the problem, but the blame goes well beyond that. In fact I have given evidence of a meeting of state ministers that I called to warn them of this, based on advice from our own firefighters who went to America. The ministers have known about it and at that meeting they refused to act. To use the words of one minister, applauded by the others, ‘If we’ve got to touch one tree, in terms of prevention, we won’t do it.’

So here it is: more legislation in this place to apply criminal sanctions to certain people under occupational health and safety rules and still not a mention of it down at the royal commission. They want to tear apart the firefighting services and everyone for their failure to protect people from a nuclear event. They could not be protected if they were anywhere near it. Total evacuation may have been a solution, but not to property, only to person. I just make that point because the opportunity is given to me by those words in this legislation.

As the previous speaker from this side has been saying, the issue arises about greenhouse gas storage and the issue arises about greenhouse injection licences, which are specifically dealt with in this legislation. There are some interesting statistics,  which I have developed, tested and had peer reviewed, if you like, regarding how we might achieve genuine greenhouse emissions reductions of 20 per cent without imposing a silly emissions trading scheme.

It is referred to as a carbon pollution reduction scheme when all it is, in fact, is a derivatives trading scheme, the value of which I can only see accruing to the hedge funds and the screen jockeys who will be able to recover some respectability by practising, under the label of saving the planet environmentally, all the things that sent the world broke. I find that response to what I accept is a problem to be patently ridiculous.

It is in fact a system that issues certificates to pollute. Some will be sold by the government accruing revenue apparently of about $11 billion, but we are told that the ordinary consumer and businessman will suffer no ill effects from that withdrawal of $11 billion from money that would otherwise be circulating to their interest. And then of course there is a significant and ongoing debate about the issuance of free certificates to industries principally referred to as trade exposed. As the previous speaker from this side said, nobody thought to put the car manufacturing industry into the mix and yet it is patently obvious that the American legislation will be much more generous in terms of the issuance of free certificates, exemptions or whatever you want to call them. That is the proposed legislation now before committees in the American congress.

Therefore, for companies like General Motors that have now told General Motors Holden that they are on their own but ‘Good luck; we think you might make it’, the reality is that, with a renewed business structure with gigantic capital subsidies from their government and relief from their employees health system that was costing them $1,500 a motor car, the suggestion that they are not going to come out and compete with their own subsidiary is laughable. Considering their mass market and everything else, they will knock spots off us. Even in its endangered state, the Chrysler company is, from my observation, on the roads already penetrating the SUV market, particularly in Australia with their jeeps. I cannot drive down the road for 10 minutes without passing a couple of jeeps or having them pass me.

What I am saying is that the threat from this proposal that is in the Australian parliament has to be considered on a global basis. By the way, I have some admiration for the Minister for Agriculture, Fisheries and Forestry in some of the initiatives he has taken, but when he stands up in this place and says that farmers can be helped by initiatives in Australia and that their weather pattern is only going to change if we are able to reduce our emissions by 100 per cent it is of course farcical and it should not be said. We have an international obligation; we should not be the world leaders. Our emissions as other nations grow will be one per cent, not even the existing 1.4 per cent.

When you look at those facts of life, it is questionable that we should have a system that allows people to buy certificates to pollute and make a judgment what they do thereafter. If you are running certain businesses with a captive market, what are you going to do? You are going to pass on the price. They cannot get away. Of course, you eventually get down to the household consumer or the primary industry farmer and they pay up because they have no-one to whom they can pass on those costs.

I laugh when we hear these business calls for certainty, so they can make up their mind whether they stay or leave the country, so that they can start to reorganise their investment because China are not going to have an ETS. China are going to have, as already ordered, 20-odd nuclear power stations which do not emit greenhouse gas. China have built the Three Gorges Dam as a huge resource of hydropower and now they are building a 2,000-kilometre high-voltage DC line because they know they can transmit energy along that line with practically no energy losses and therefore of course no associated emissions.

We are talking particularly about greenhouse gas and we are talking about greenhouse gas storage. On a scale of one to 10, I have had to ask myself: how would you best achieve outcomes in this regard and where would you invest government money? Please remember we have just had a disposal through borrowing of $24 billion by way of $900 cheques to the citizens of Australia. Has anybody asked themselves: had that money been invested in practical measures for the reduction of greenhouse gases would that not have been a better outcome for our kids? We could have invested it in jobs in Australia. Most of the technology would be developed in Australia, notwithstanding that none of it has to be invented.

In the remaining minutes available to me, I want to take the opportunity to point out what you can do to reduce greenhouse emissions just by changing your business pattern. Australia has 25,000 kilometres of natural gas pipelines and the gas is put through a compressor stationed every 1,000 kilometres along the line. They are used to keep the gas moving in the pipelines. Gas will not travel on its own. The compressors literally suck gas out of the pipeline and drive gas turbines to recompress the gas and move it on for another 100 kilometres or whatever down the pipeline. Those compressors emit 300,000 tonnes of carbon dioxide per 1,000 kilometres—in other words, some 7½ million tonnes of emissions are associated with those natural gas pipelines. A significant amount of that gas—in the case of Western Australia it is about 30 per cent of the gas pumped down from the Pilbara to Perth—is then turned into electricity in gas turbines. Along that pipeline, 250 megawatts of electricity is burnt up, which is equal to one Collie powerhouse in our state. Having burnt up the gas, the gas is then taken out at the end of the pipeline, turned into electricity and, in some cases, sent a third of the way back up that pipeline in the form of highly inefficient high-voltage AC power—not DC power. AC power is known for its inefficiency. It is known that a transformer must be placed every 20 or 30 kilometres, and that consumes energy. Why would you do that?

The Premier of WA, recognising the need for additional electricity for the Perth metropolitan area—and there is nothing wrong with that—is proposing another 200 megawatts of power generation at Kwinana, just south of Perth. He has just learnt a lesson, and that is: to send any more of that power up to the mid-west region in my electorate, he needs to spend $700-odd million on an AC powerline that is going to waste a lot of electricity. The other day in a flash of inspiration, he said, ‘Why’—considering, of course, that the gas pipeline travels through that country—’don’t we build the powerhouse up here?’ Fine. But the real question is: why not build it on the beach where the gas comes ashore? Instead of using a highly inefficient gas pipeline to pump the energy to where someone wants to consume it, why not use a highly efficient electrical line known as high-voltage DC? I might add that currently such a line crosses Bass Strait for the simple reason that you cannot put transformers in the sea. It happens to be an electrical system that can carry electricity transmissions in either direction.

Just by changing that system, you no longer need to have emissions involved in the construction of gas pipelines. You do not build these steel pipelines without emissions. The member for Solomon would probably not like to be reminded that, if they take that gas across the sea from Inpex’s deposit in the Browse field to Darwin, there will be a huge emission requirement during the construction of that greatly elongated pipeline. I hear greenies standing up every day saying, ‘The Browse gas shouldn’t go to the Kimberley coastline’—the shortest possible distance—’it should be pumped under the sea all the way to the Pilbara.’ I have just stated the sorts of emissions that will achieve. But does that worry Missy Higgins?

Missy Higgins has a tax deductible house in Broome, where she goes to get inspiration in the wintertime. She wants to be a protester—excuse me—and there are two or three others standing beside her. Of course, if she got swine flu while she was up there she would expect the Western Australian taxpayers, who are denied payroll tax and things if these projects do not go ahead in their state, to fund the Flying Doctor Service to get her to a hospital—yet to be built. And good luck to Darwin in getting the Inpex project, but that has cost Western Australia the funding of the Fiona Stanley Hospital in the lost payroll tax.

These protestors sit up there and want the roads and want the hospitals, but want the area to be left as a pristine environment. I think the beach involved at James Price Point is pretty, but let me say that there are 6,000 kilometres of coastline in the Kimberley—1,000 as the crow flies and 6,000 if you walked it. Someone wants two kilometres of it to invest in our future, and these people are up there carrying on about it—excuse me—it is quite silly. It is to the credit of the new government that they have that project going forward.

What I am really saying is that we keep reading so much—the member for Hasluck made mention of it—about carbon capture and storage. I only went to school until I finished my leaving, but I was lucky enough to go to Perth Modern School and I came out with distinctions in science, physics, applied maths and English, if you like to know. I shudder in this place when I hear the grammar that is used these days. But what I learnt—and I passed in economics too—from my physics was that you cannot destroy an element, and carbon is an element. The fact is that you can at considerable cost, and the technology is yet to be proven. The last time I heard from the CSIRO they said, ‘Oh yeah, you can do this; it will only consume 20 per cent of the production of the power station.’ That is a matter of physics. It is not a matter of getting the accountants in to find out how you can reduce that by half; it is a physical fact. So why would you be rushing around trying to prove that point?

There is certainly a place for coal in generating power and energy for Australia. All we have to do to meet international commitments is reduce the relative amount we use. The gas people in Darwin said the other day, ‘We can give you a 20 per cent reduction if you just go on progressively using the gas.’ We want to achieve a massive reduction in automotive emissions and we move to electric cars, and hydrogen fuel cell cars still require electricity. We are going to have to double our generating capacity.

So, in the process, why not use renewable power like the Kimberley tides that have genuine substance, why not use natural gas, why not use the other forms of renewable energy, as unreliable as some of them might be, so that by 2020 the relative component of coal-fired emissions is dramatically reduced?  Nobody in the world is talking about reductions of 50 per cent. But of course if 50 per cent of your electricity was produced from renewables and you retained the benefit of the other 50 per cent being used by the cheapest possible product, coal, you have an outcome, and you have not taxed industry into submission and you have not put people out of business. In fact, over time you will achieve lower electricity prices from those renewable resources as the capital is written down, which nobody contemplates.

We keep having this silly argument that somehow you can have an emissions trading scheme and immediately the business community will comply. They will stop emitting carbon. No, some will pay for it and some will leave town and make their emissions where there is a more compliant regime. And take it from me there will be plenty by one means or other. (Time expired)

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

I listened intently to my colleague’s speech. I have to say that I am getting used to hearing the rhetoric about what we should be doing and when we should be doing it but never, ever making a start. If the Howard government had got re-elected, boy, would they have had a fantastic 13th year! They had these opportunities, so it is no longer just a point of rhetoric. The member for O’Connor was right: there are alternatives that must be considered. The truth of the matter is that going forward in the overall energy debate for this country is going to require a suite of technologies; it will not be any particular one. As legislators, we need to ensure that we have a regulative environment that encourages the commercialisation of each of those technologies that will play a part in the future energy needs of this nation. Having said that, I say that the simple reality is that 80 per cent of Australia’s electrical power is now generated from coal. Therefore it does require a serious response if we are to be serious in addressing climate change.

I sat through a series of reports about climate change that came down at the dying end of the Howard government. One of the reports we looked at was about carbon capture and storage, or geosequestration as it is called. I also recall a dissenting report that came from various members opposite whose dissenting position was based on the fact that they saw no discernible evidence that humankind had made any adverse impact on the environment, climate change et cetera. They wanted evidence on that, based on some reliable information they had on what was occurring not on earth but on Mars, Venus and Pluto—if the latter is still part of the solar system. It was that ridiculous. Regrettably, the person concerned, the member for Tangney, only yesterday wanted to interject to the Prime Minister and again reiterate that, in his opinion, there is no evidence to support climate change as being anything other than a natural phenomenon. Whilst we have people like that opposite, who were in the former government, it is no wonder that in their 12 years of government nothing happened to address climate change.

The establishment of carbon capture and storage as a response to power generation in this country and the fact that we are still carbon dependent is absolutely critical. I know others will argue that this is a technology that is still very new. I know the Greens will argue that by going down this route all we are going to do is further legitimise coal-fired power generation. I say to those opposite: we do need to make that start; this is not new technology—absolutely not. It is just that we are going to change the way we deal with the emissions from, in this case, coal-fired power stations. We can do this by using a network of pipelines to transmit the residue of the liquidised carbon to, I think, a bit over three kilometres offshore and then store it either in geological structures or, alternatively, using depleted oil and gas reservoirs, as they are doing in Bass Strait.

If people are going to argue, ‘Is that the sole answer?’ I still stand by my initial comment: it is not going to be the sole thing that is going to deal with our future energy requirements, but it is certainly one essential technology that will contribute to this country in doing two things. Firstly, being able to have competitively priced coal for export and, secondly, it will ensure that those energy dependent industries that we are establishing or wish to establish in this country for the future have the energy they need to develop their enterprises and employ those Australians who are working for the further betterment of this country. So whilst this is part of a suite of technology, it is a crucial element for pressing ahead.

Coal currently provides 80 per cent of Australia’s power generation capacity, and on a world scale it is 40 per cent. The member for O’Connor referred to the commissioning of new nuclear power stations, which is occurring in China. The reality is nuclear power currently contributes 16 per cent of world power generation. We understand all that, but the fact is coal-fired power generation is still seen as the effective, viable, affordable form of power generation into the future, therefore if we are going to have a part in that cycle, if we are going to benefit from exporting coal to the world, if we are going to want to attract those industries and make them competitive by using coal-fired power, we then have a responsibility to ensure that we do everything that we can to ensure that the industry functions as cleanly as possible and that amelioration of carbon is given priority in future construction within that industry.

So while coal’s share of future power generation in Australia will decline—and there is no doubt that it will decline in favour of renewable energy and less greenhouse-intensive fossil fuels, such as natural gas—that is one of the areas in which we are very fortunate. From statistics I read only recently, on current usage we have in excess of 135 years’ supply of natural gas, and that is provided we do not find another supply of natural gas in the meantime. Natural gas will probably be the feed stock as we move closer towards a hydrogen economy into the future. Having that degree of natural wealth is going to be important for this country.

Years back when I had some involvement in the oil industry, working up and down the North West Shelf and into the Timor Sea and those areas, I saw the looks of exasperation on the faces of managers of companies, such as Santos and others, when they drilled and hit natural gas. That is not what they were looking for. They were looking for oil. We have so much in terms of a plugged gas supply at the moment until we discover more and reliable markets. Again that will come as part of the suite of technologies that will move to replace or reduce our dependence on coal-fired power.

The International Energy Agency, which monitors and looks at these forecasts, is indicating that the demand for energy will grow but it still forecasts that coal-fired power will be the essential form of power generation into the future. As a matter of fact, according to the International Energy Agency’s statistics, coal will provide around 44 per cent of world electricity needs by 2030. By the way, that is an increase on the current share. If that is going to increase we need to be a part of the solutions based around clean coal technologies, because our livelihood is steeped in the fact that we are the world’s largest exporter of coal. In the period 2005-06, we netted $240 billion from our exported coal. We are the world’s largest exporter.

Not all that long ago I went up to visit one of my sons working in Queensland, up at Blackwater, and I actually saw the extent of their operation up there, and that is why we do need to commit resources into ensuring that our infrastructure enables us to meet world demand. And that was only on one site. A lot of this country’s wealth generation is based on coal. The industry directly employs about 30,000 people and indirectly employs millions because various areas of industry out there are operating in this country because we have competitive, affordable access to energy, and the aluminium industry would be just one. All these things are very significant.

It is also very significant to note, when talking about finding new technology for coal fired power, to realise we have about 350 years supply of premium grade black coal on current usage, including our exports. We have 800 years supply of brown coal. Maybe that is not a most favoured realisation for those in the Greens, but as a commodity coal is something that we are well endowed with. This means that we should be the world’s leader in developing clean coal technology, and that is essentially what we are trying to do by, firstly, developing carbon capture storage and, secondly, giving weight to the less greenhouse gas polluting fossil based industries such as natural gas.

This technology—and it is not new; it is not new theory—involves reinjecting carbon into either depleted oil and gas reservoirs or, alternatively, into the depleted Esso field in Bass Strait or the Pluto field on the North West Shelf, where the proposal is to inject carbon about 1.5 metres into the substructure, into geological formations. The Greens actually posed the question in one of the inquiries: we are going to store a pollutant and does that break down. The answer is probably no, it does not break down. Those reservoirs under there, particularly the oil reservoirs and gas reservoirs, are full of carbon, and they have been there now for millions of years. That is what we have been tapping. I think using that depleted reservoir in Bass Strait to store future supplies of liquefied carbon will be very successful.

This does require leadership and I am glad the shadow minister is here because I am sure he will want to talk a little bit about the CPRS, and I will invite him to do that because his colleagues in the other place are not going to do it. They have avoided a vote on CPRS; they have avoided actually making a stand—

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

You know more than America does—you know more than Obama does!

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

I take the interjection from the member for Mayo. We are determined to make a difference. As the member for Mayo would appreciate, the government that he advised over a period of time—

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Four years.

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

Four years, thank you. They thought many things were absolutely paramount to this country, but they did not take them to an election. And they had Work Choices. Where did they stand on these issues? Where did they stand on the position of low-polluting coal power generation? Where did they stand on those environmental things? They had words—and we heard the former shadow minister speak a little earlier—but no commitment.

It is all very well to say, ‘We were going to do that.’ They are a bunch of ‘gunnas’—they were ‘gunna’ do that eventually! They were going to do that in their 13th year! That 13th year would have been a hell of a party. Can you imagine the pop of champagne corks going off everywhere! They had 12 years to muse on these things. They had 12 years of trying to get set in their minds what they were going to do when they got to their 13th year. I am sorry, guys—you missed the party.

But it is not all bad news for you; you are still here as bona fide representatives of your electorates in the federal parliament of Australia. You can still play your role in speaking about the future for this country. You can still have a voice—except that your Senate members do not want it. They said, ‘Let’s not exercise our voice. Let’s vote to not have a vote.’ That is democracy at its greatest! I know that the legislation before us is probably not the best legislation to have the argument on, because it only makes minor technical changes to the bill, but I invite the members opposite to think about this: it actually goes to the heart of what this government is determined to do something about—reducing our emissions. This government is determined to make a start, a critical start, in environmental protection.

These are not things that should be taken for granted. They require action. The time for simply musing, talking and debating is rapidly departing. We see the statistics. We see what the world attitude is. We see what the position of the Americans is. They had eight years of a Bush administration, which did not want to deal with this issue at all. Since the Obama administration has come in they have put a line in the sand and said, ‘We are going to do it.’ I certainly wonder what the Liberals would have done in their 13th year, when they would have had to react to Obama. They could not have taken instructions from George Bush anymore—or could they? That really would have been the tail wagging the dog.

It is now our turn to get in on behalf of Australians and make the difference. The CPRS is critical. It is critical that we put a price on carbon. The opposition had a policy for putting a price on carbon which was never implemented. We are now implementing it. They cannot argue this on the basis of: ‘We refuse to argue it. As a matter of fact, we refuse to talk about it in public and we will definitely not vote on it.’

The issue of affordable power is essential in this country. We are an island which is a long way from our trading partners. One of the things that we use to attract industry is our affordable power. Industry wants to be able to use that, and coal will have an essential place in the mix. I shuddered when, not that long ago, in the lead-up to the last election, Senator Brown wanted a mandate to shut down coal exports within three years. Like you, Mr Deputy Speaker, I do not aspire for my kids or my grandkids to have earthen floors and thatched roofs or to reduce our standard of living, which has been underpinned by cheap power in this country. If we are to maintain our position in relation to cheap power we need to ensure that we have the appropriate technologies available which allow us to maintain cheap power production on a more environmentally friendly basis. Therefore, carbon capture and storage provides a critical element in the forward planning and the forward development of the electrical power generation industry, the coal fired power generation industry, in this country.

It is critical. We all know that there are costs associated with that. There is no point putting our heads in the sand and saying, ‘This won’t cost anything. It’ll just happen.’ We understand the position that has been put by the member for O’Connor, but we need to be serious about being a player on the world stage. Bear in mind that, whilst the opposition takes the view: ‘Let’s wait for the Americans’, we are the world’s No.1 exporter of coal. That is our basic bread and butter. We should not sit back and wait for someone else to tell us what to do. Things have changed. It is now time for decisive leadership. (Time expired)

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I would just like to inform the members, if they were wondering about what the photographer was doing here, that all we know is that we had a note from the Serjeant’s office saying that he had been cleared to be up here to take photographs.

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

In rising to support the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009, I want to put the bill into context. It is a part of the process of ensuring that we move Australia and, more importantly still, the world’s energy generation sources to a low or zero carbon emissions base. That is the goal, that is the objective, that is the responsibility, and that is what will occur. The only debate is around the time frame, but that outcome will occur over the course of the next half century—be in no doubt. The task is to do it in a way which is most effective with regard to environmental outcomes, and most efficient with regard to the costs imposed on our society and on other societies. The task is also to do it in a way which means that no one generation or no one country or society bears a disproportionate load. That is the context.

In addressing this bill, I want to proceed in four steps: firstly, to look at the great global challenge; secondly, to address the challenge we face and our response as we move towards a clean energy sector; thirdly, to deal with some of the impediments; and, fourthly, to deal with this particular bill’s contribution.

The global challenge is simple to understand. At this moment, at this point of history, what we see is 40 billion tonnes of CO2 or equivalent gases being put into the atmosphere every year. That figure is on the increase as China and India grow and add 800 new coal or gas fired power stations over the next five years. That is the grand historic moment which we face at present. The goal and objective, which we have sought for over two centuries, of seeing the eradication of poverty and the development of developing societies is part of that process. It is the grand historic paradox: as people come out of poverty, they consume more electricity and energy and, as they do this, they create CO2 emissions. That is, sadly, the great paradox of history, which brings us to this tragedy of the commons. And that is the issue which has been part of the great work of my life—coming back from a thesis in 1990 on the different approaches to reducing carbon emissions, whether it was a carbon tax or an emissions trading scheme. That has been part of the work of my life, and I have been happy to place my political career on hold along the way in order to make the case publicly.

Having said that, with this great challenge of 40 billion tonnes of CO2, with this great challenge of 800 new coal and gas fired power stations, with Australia’s responsibility at present being about 1.4 per cent—or 560 million tonnes—of CO2 per annum out of a total of 40 billion tonnes, we then say, ‘How do we address this problem?’ We know that energy generation for stationary energy produces approximately half of global emissions and approximately half of Australian emissions. We also know that deforestation—primarily driven out of the great rainforests of the world—accounts for a wedge of 8 billion tonnes, or approximately 20 per cent of global emissions.

When you look at the great historic passage over the next 50 years, we proceed in three stages. First, we can halve deforestation. We can take that 8 billion tonnes of CO2 per annum, reduce it to 4 billion tonnes, and reduce global emissions by 10 per cent through a global rainforest recovery program. That is achievable, it is desirable, and it has collateral environmental and biodiversity benefits of an enormous scale. That can be achieved over the next five years. The United States, to their credit, has picked up the proposal of a global rainforest recovery program, which we had in government, for which Malcolm Turnbull, Alexander Downer and I announced a $200 million program, and which we pursued. We did it after discussions with Tim Flannery—and I pay credit to Tim Flannery for coming to us with that program, which was announced in early 2007.

Having said that, the second great stage is the cleaning up of our global energy sources, and the third great stage is the cleaning up of our transportation fuels. These are all opportunities which we can pursue over the coming half century. The staging is not absolute, there will be overlaps, we can do the immediate work with the Rainforest Recovery Program, this bill deals with part 2, the clarification, cleaning up and improvement of our energy sources, the transition to a clean energy economy.

That then brings me to part 2, this notion of the clean energy economy, and there are really three elements to this concept alone. Firstly, there is the adoption of renewable energy, secondly, there is the transition to gas as a major fossil fuel base and, thirdly, there is the cleanup of coal fired power. Carbon capture and storage—which is underpinned by this bill, which amends work which we did whilst in government—is fundamental to the process of cleaning up our coal and our gas fired reserves. I say this because we can see that with a full carbon capture and storage program combined with drying and gasification, instead of about 1.2 or 1.3 kilograms of CO2 per kilowatt hour of energy, or 1.2 or 1.3 tons of CO2 or equivalent gases for each megawatt hour of energy generated from brown coal we can achieve about 0.1 or 0.2 tonnes per megawatt hour or, in other words, we can have an 80 to 90 per cent reduction in emissions. That is profound, that is a profound change.

Similarly, if we do that with gas we are looking again at 0.1 or 0.2 tonnes per megawatt hour. Again, we are looking at a sea-change in emissions. That is the great change for Australia along with the process of biosequestration of soil carbons, of bio-char, of mallee and mulga revegetation—which Garnaut himself talks about as having a potential for 800 million tonnes of additional capture per annum against Australia’s current 560 million tonnes—in other words, the potential for Australia to be a net carbon sink.

We must clean up our energy because if we can do that in Australia we can take that technology to China and India, because it does not matter if we close down Australia if we do not deal with these great sources of China and India, which are multiplying in their emissions as they go through this historic development path, then we will not solve the global problem; there is no question about that. It is, for me, part of my life’s work to help address this issue. So that is I why I believe in the importance of carbon capture and storage.

The member for Werriwa raised what is happening with enhanced oil recovery around the world, he was actually quite informed and I compliment him on what he had to say in relation to that. We know that in North Dakota there is an Australian firm engaged in some of the critical work here, the precursor work towards a major enhanced oil recovery program using carbon capture and storage. We know that the North West Shelf, through the work of Chevron with Gorgon, potentially with the Pluto project, is going to be a site of one of the world’s greatest carbon capture and storage programs. We know in Algeria, with know with the Sleipner field in Norway that carbon capture and storage is underway. The technological components are not that difficult, they are however expensive and so that is the challenge that we have.

Having dealt with the second element of the clean up of energy, I want to deal with the issue in relation to some of the impediments. Recently, we have seen three setbacks. First, we have seen the abolition of the Solar Rebate Program in Australia cutting dead an $8,000 rebate on the same day, no notice, no warning, the loss of jobs, the loss of opportunity, the loss of the capacity for mums, dads and seniors to immediately access solar power.

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

Seventy thousand more than you guys.

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

That is sadly gone. I will take your question, give us a question, mate.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! can I ask the members to keep order. It is becoming very rowdy in this place, there are ample opportunities to have your say in this House on behalf of your constituents. I will ask the members on my right to quieten down a bit and the members on the left to continue as they were.

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

Thank you, Mr Deputy Speaker. I confess I invited the interjection. I am only disappointed it was as unimpressive as it was. Let me answer the question, because I invited it. The solar rebate was introduced by us and it was increased to $8,000. The Prime Minister of the day said that it would be an uncapped system. We wanted it to be successful. The then opposition promised that they would maintain it. Once it achieved exactly what we set out for it to do, to expand the capacity of ordinary Australians to access solar energy, it was axed overnight in the 2008 budget by the minister for the environment the Hon. Peter Garrett, in breach of his own election promise and the Prime Minister’s election promise.

It then happened a second time. The means testing was put in place in 2008; in 2009 – 2½ weeks ago – the program was axed immediately. Four weeks after the Budget Papers promised that it would be continued, it was axed. Three days ago we saw that the remote renewable power generation program, or the remote solar program, was axed retrospectively. The distributors received an email at 8.33 am saying that as of 8.30 that morning this program had been axed. The ability of people in indigenous communities, the ability of people in the member for Solomon’s home territory of the Northern Territory, to access solar power in remote communities was destroyed overnight. It was destroyed at the same moment. That is profound; it is unquestionable. I have three solar groups in my office today who have been devastated as a result of this decision and I have had approaches from communities throughout Australia who have been profoundly disappointed at the loss of this benefit.

Having said that, we also see that the renewable energy target which would provide some means of responding to this has not even been brought before the House of Representatives for debate even though the replacement was due on 1 July. Today, the last day of sitting for the financial year, a year after that legislation was due, finally that bill is listed. We would have to sit until 2 am tonight until it could be brought on. No debate, no barriers—we had offered to pass this legislation. We had offered to bring it forward. At any time over the last year it could have been listed and we would have found a way to pass it.

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

Mr Deputy Speaker, I seek to intervene.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Is the member for Flinders willing to give way?

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

Let it rip.

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

I ask the honourable shadow minister whether he would accede that we have increased the targets in renewable energy in excess of what his government did for 12 years.

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

The problem is that you have not increased the target. You have talked about it. The problem is that two years ago the other side talked about a 20 per cent target and we are now 18 months in, at death’s door. They did not introduce the legislation a year ago; they did not introduce the legislation six months ago; they did not introduce the legislation during the Budget sitting; they did not introduce the legislation three weeks ago—last Wednesday it came in. We were willing to debate, to work, to push, to find a way through. We committed to passing this legislation if there was real discussion, but what do we see – it is not listed until the final day of sitting in the financial year and that is a year late and even then it comes on at 2 am in the middle of the night. We do want a 20 per cent target; we do want to work with you on that; we do want to see the legislation passed. Unfortunately it is very hard to pass legislation which is not actually debated in the Parliament of Australia. So those are the impediments to a clean energy future.

Finally—and this brings me to the fourth element—this bill, this day, this moment is a positive thing and I congratulate the government. It builds upon that which we have done in terms of creating an enabling environment for carbon capture and storage. It is a significant step forward, and when people from either side of this chamber take that significant step we should all have the good grace to acknowledge it.

I think it is a good bill. I do not walk away from that. It builds on work which had previously been done, but it falls within the broader great global challenge—and I return to my beginning of 40 billion tonnes of CO2 and half of that coming from fossil fuel sources—the creation of stationary energy. As we bring the developing world out of poverty there is a grand, historic objective with a terrible paradox. My response is that we will work towards a global clean energy compact. This bill is an important part of Australia’s contribution.

There are impediments—seemingly little things—but with real human consequences and poor environmental outcomes such as the abolition of the solar rebate program and the solar remote program and the delays to the renewable energy legislation. But we will solve all of those, and we will work towards a clean energy future. That is why I am delighted to support the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the cognate bill.

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

I note the contribution from the member for Flinders and note his knowledge in the area of environment, carbon capture, greenhouse gases and the like. It was interesting to hear him say that he had to put his political career on hold while he has had this knowledge. If he can possibly do anything about preselection in the seats of Tangney, the Kimberleys and O’Connor, that might make it a little bit easier for him to get this vast knowledge out there in party room and to get a little bit of support. Probably from the member for Mayo, who would be—

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

Mr Adams interjecting

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

Well, he is a young bloke and he has got a young family. I think environmental issues should be important to him as well, so maybe they can start to change the mindset of those opposite, when it comes to the environment and the different things that we are endeavouring to do as a government after waiting for 12 years and nothing happening.

The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the cognate bill propose to amend the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003. The amendments are technical and minor policy changes which streamline requirements, provide clarification and will reduce the overall regulatory burden on this industry. It is certainly an industry that is very important to the Northern Territory. It is an industry that is growing in the Northern Territory and, obviously, with regard to the Inpex proposal that is moving forward there, there are also a number of other companies that are looking to invest in the Northern Territory and these types of changes will benefit them greatly.

These changes result from three reviews of the different aspects of the offshore petroleum regulatory system which have been conducted by the Department of Resources, Energy and Tourism over the past two years. There are no adverse effects on industry from these bills or any additional costs, and I appreciate the fact that those opposite are supporting this bill.

A number of the changes relate to altered arrangements for pipelines, commencing 1 January 2010. These arrangements will be set out in a revised regulation to come into effect next year. They will see pipelines being treated on the same basis as other facilities under the safety regulations. This will see the removal of pipeline management plans and pipeline safety management plans from regulations. As such, the pipeline safety management plan levy will become a safety case levy. This change in levy arrangements is set out in this bill, with amendments to both the act and the safety levies act. The removal of consent to operate a pipeline is part of these overall changes, and will also take effect from 1 January 2010.

Several changes, such as providing a consultation process on the granting of access authority, and making the joint authority the decision maker in relation to the declaration of locations and the granting of scientific investigation consents, are designed to streamline current arrangements. Moving the power to vary coordinates based on the current datum from regulations into the act will streamline regulatory process. It is about cutting red tape. This bill is housekeeping, if you like, cutting through the red tape. It removes the data management plans and changes the timing notification of petroleum discoveries, reducing some of the regulatory burden that is already on the industry. Often some of these things have already been agreed to. They have been debated and discussed within industry. This bill streamlines the process of companies being able to move forward and get their proposals up and running.

A couple of questions have been asked and I would like to talk to those for a moment. What are the advantages of allowing decisions on the nomination of a declaration of a location to be made by the joint authority? This authority will be able to streamline, as I said. Also, by making decisions on the nomination of the blocks and declaration of location joint authority matters, these amendments create a consistent and agreed approach on what is a key matter in the development of the petroleum title.

The declaration of a petroleum location is a necessary step before an exploration company applies for a retention lease to retain title over a currently non-commercial discovery or applies for a petroleum licence to develop a commercial discovery. The granting of a retention lease and a production licence are joint authority decisions. This amendment benefits the petroleum industry, as agreement between the state, the Northern Territory and the Commonwealth from the outset on the location removes any potential conflict on the decision later in the development of the petroleum project. Overall, this provides more certainty and should not lead to longer decision making.

Why is it necessary to change the authority for making decisions on setting conditions for scientific investigation consents and granting scientific investigation consent from a designated authority to a joint authority? The granting of scientific investigation consent helps Australia fulfil an international obligation under the United Nations Convention on the Law of the Sea. This convention provides that all states have the right to conduct marine science research on the continental shelf with the consent of the relevant coastal state. This can include petroleum exploration operations. Given this, it is appropriate that the responsible Commonwealth minister should be part of the decision to grant scientific investigation consent or to set conditions for such consent.

Further questions may be asked in regard to why these amendments are being put in place. Why is it necessary to notify the discovery of petroleum in petroleum production areas? Why is the period for notification being extended to 30 days? The reason is that discoveries in exploration permit areas or retention lease areas are already required to be notified each year. Each year a few new discoveries of petroleum are found in petroleum production areas. It is therefore consistent to require the notification of these discoveries. However, the government is not seeking through this amendment to get further information on existing accumulations of petroleum but on new, discrete accumulations.

The rule on immediate notification with a report on the discovery within three days, while not onerous, does not provide the government with useful information. Any discovery, whether commercial or not, is required to be notified. If a company has had no time to assess the discovery, and yet the company does not provide this barely-useful information, it has committed an offence. This amendment allows a reasonable period of time for a company to assess its data and ascertain what it has actually discovered by increasing it to 30 days. These rules will apply to the discovery of petroleum in greenhouse gas titles.

An interesting part of this legislation is to increase that time required of companies on making a discovery. They are given that extra time, some 27 days further, so that the information can be compiled and is of substance, complies with the act—they are working to the letter of the law in regard to the discovery that they have made—and is able to be put forward to the correct authorities. What happens to the funding for the National Offshore Petroleum Safety Authority if the pipeline safety management levy is removed? A levy will continue to be raised for pipelines, but as a safety case levy. New levy arrangements will apply from 1 January 2010, which will be the start of the next levy year following the passage of the amended bill. There are a number of other areas in this bill but, as I have said, it is a non-controversial bill. It is just a little bit of housekeeping to streamline and tidy up the act to make it better for industry and less complicated with less red tape that has to be worked through.

I was listening to the discussion from those opposite and it was interesting to reflect on some of their comments and some of their own history on climate change. For me, there is no silver bullet to climate change. It is a matter of looking at carbon capture and looking at the emissions trading scheme as well as renewables. I was out doorknocking a couple of weeks ago—something that would be foreign to the member for Mayo, being in a safe Liberal seat, but when you are on 196 votes you have to go out and meet the punters—and a lady yelled out to me saying that she was very disappointed that we had dropped the emissions target from 20 per cent down to five per cent. As she was verballing me over her fence, I noticed that she was using a Gerni to wash down her driveway. I thought it was quite ironic that she was washing the driveway down. I saw her a couple of weeks later at a school fete and I said, ‘I remember you as the lady with the Gerni,’ and she was a little bit sheepish. I have digressed. I will go back to what I was actually talking about. It is everyone’s responsibility to address their own energy consumption and their own use of water initially. The education programs that have been run by both sides of government are important in this debate and need to be addressed. In the Northern Territory we have a lot of rain, but we are in drought for probably six months of the year—we do not have any rain—and certainly we do waste a lot of water. To see somebody washing their driveway down instead of using a blower or something like that is indicative of the attitude when you live in an area that gets over 100 inches of rain in six months.

There is no silver bullet when it comes to climate change. We need to continue to invest in the renewable energy sector—some $500 million is being invested in that—in clean coal technology and in carbon capture. We should also look at alternative sources of power—wind, geothermal hot rocks and tidal—in areas such as those of the member for Canning and other members from Western Australia. Big tidal changes go through Broome and Darwin, where you get seven-, eight- and 10-metre tides.

There are alternatives and we need to continue to invest in them. It is a real shame—it is disappointing when you are a new member in parliament and you do want to make a difference—that the CPRS bill is once again bogged down in the Senate. We are now not going to be able to get it through until the August sittings. It is just this blocking of legislation, and this is important legislation; yet, those opposite have blocked it in the Senate and decided not to have a vote.

Sharon Grierson (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Dinosaurs!

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

That is the problem—it is dinosaurs. It is a really narrow way of thinking. When we have the debate on economics and the opposition talks about debt and deficit, all you hear is, ‘The burden that is being placed on our children’ or ‘$9,000 for every man, woman and child!’ It is all this ‘burden of debt’ and gloom and doom and fear.

As we have seen this week, it has now gone from fear onto smear, and the interjections we have had to the last speaker, when the member for Flinders was talking about not being able to debate the legislation. We have spent three days in this House bogged down in a debate about an email that was false, fake and fraudulent. We have spent three days wasting taxpayers’ money in this House when we should have been putting legislation through that would move this country forward; yet, we have been bogged down in a grubby witch hunt. The only person that is really going to lose out from the whole last three days is the poor old Treasury official; I think everyone else will move on with their lives except that bloke. And we have spent three days doing it. Then we have those opposite saying, ‘We have no time to debate this’ and ‘We have no time to debate that,’ because we have just wasted so much time on this other issue that will end up coming to nothing by the end of the week. As I said, it will be one person that will pay the ultimate price for what has gone on this week. For what?

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

Mr Briggs interjecting

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

Yes, there is not a lot of cooperation coming from your side of the House, from what I have heard in today’s reports. The thing is, with climate change—

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! Can I ask the member for Solomon to stick to the debate, which is the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009. And let me also remind the members on both sides to address their comments through the Chair.

Damian Hale (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. I had sort of forgotten what we were talking about there. It is just typical of those opposite when it comes to issues like climate change. There are very few alternatives. I brought out a bit of paper to write down the member for Flinders’ alternatives and, as you can see, it is fairly blank. A global rainforest recovery program—yes, it has a nice ring to it and probably could work. Unfortunately, they had 12 years to do something about this, and we are actually acting on climate change. We believe in climate change; while, on their side of the House, they still have their sceptics. I know that it makes it very difficult for the member for Flinders—who has got an extremely good intellect and a real passion for environmental issues—to be hamstrung by the attitudes of other members.

Getting back to the bill, it is a non-controversial bill. It does not have an adverse effect on industry at all, and there will be no additional costs. It is about streamlining the operation so that both industry and government can work together to make sure the legislation allows industry to operate, to keep progressing and to keep moving forward. It gives that little bit of flexibility, in regards to being able to report the data back on discovery—you will find that an extra 27-odd days in the change in the legislation will enable industry that extra time to collect their data. I commend the bill.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Energy and Resources) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy Speaker, and I am pleased to speak on this bill today, which I loosely term the geo sequestration bill, and the associated amendments. As we have heard, the nature of the bills to be amended in this legislation is to be passed last year. These bills before us today are purely making administrative and technical corrections to the existing legislation regarding safety levies and title matters which I support.

The original basis of the legislation was an initiative of the coalition in government following a review by the science and innovation committee with the foresight to recognise the importance of creating a framework to manage the relationship between the petroleum industry and offshore storage of greenhouse gases. The resulting legislation aimed to regulate future industry. It provides for the injection and geological storage of greenhouse gas substances in Australian offshore areas in line with petroleum industry legislation. Whilst complicated by its very nature, the legislation was designed to regulate the exploration, assessment and testing of geological storage of greenhouse gases and to tackle potential conflicts between offshore petroleum operations and titles and geosequestration operations and titles.

As a nation we need to reduce carbon emissions, we all know that, with Australia’s vast resources of gas and coal we need to find more efficient ways of serving our energy needs and reducing the emissions at the same time. I note that during the debate of the original legislation there were strong points made that the legislation created disincentives to invest in greenhouse gas storage operations, managing the competing interests at play between those seeking to sequester the gases and the petroleum industry, and the cost burden and responsibility of building the infrastructure and monitoring the sequestration of CO2.

I agree there is a strong need to manage the relationship between those seeking to drill for gas and petroleum and those seeking to store carbon. They are working in the same environment. Geosequestration, I have taken a strong interest in the development of geological storage of greenhouse gases in recent times. I have welcomed the opportunity to speak to the experts in the field and have visited a number of research facilities working on carbon capture and storage.

The legislation before us provides for the capture of geosequestration of greenhouse gases, carbon, in other words produced mainly by large emitters. If we continue to use fossil fuels for energy we need to find smarter ways to use them, invest in clean coal technologies, such as gasification and carbon capture. Let me stress here that the Rudd government, for all its green rhetoric, has not offered any real money in clean coal technology. You remember, before the election they were talking about all this clean coal technology and how they were going to develop it, very little word about clean coal technology since, except in the duplication of international bodies to pursue clean coal, so that has fallen off the Labor Party agenda.

Conventional coal fired electricity generation plants have efficiency of about 35 per cent which means that about 35 per cent of usable energy in the coal is converted into electricity. New technology can raise the efficiency up to 55 per cent and reduce emissions at the same time by 25 per cent. The science of geosequestration is an innovative process and one that can offer benefits to Australia by storing carbon dioxide underground. As is the nature of new technology, it is often a matter of costs versus benefits, how much people are prepared to pay, how much the big emitters are prepared to invest.

Currently, carbon capture and storage option include storing carbon dioxide in existing gas fields that are no longer used for production. The removal of gas from the reservoir has created a porous space for the CO2 to be stored. Alternatively, deep saline aquifers can store carbon. Because they are so deep and the carbon is trapped below so much mud and clay, there is little risk of any path to the surface. The CSIRO is also looking at coal seams which store carbon dioxide. In fact, coal seams already store naturally occurring CO2.

Yesterday I visited Geoscience Australia for a briefing on the carbon capture and storage project, and I thank them for their brief. This was an outstanding opportunity to speak to the experts in the field, and they showed me the cores where this CO2 would be stored. There is a misconception that when you take the gas out of a field, you take it out of some huge cavern or vacuum. It doesn’t, it is actually a spongy type rock, sandstone almost that you see houses built out of. Once the gas or the liquids have been taken out of this geological structure, it obviously provides a great opportunity for other gases to go back in. Overlaying this soft rock or this porous rock that allows the gas to be reinjected is usually a hard rock surface. They showed me cores of these as well. Obviously you do not want leakage. Many of the sites from which natural gas is taken have been there for millions of years, so they have millions of years of reasons why they are good storage spaces.

I also recently had the opportunity to visit the Australian Resources Research Centre in Perth, very close to where I live. It is a partnership between CSIRO, the state government and the Curtin University, with more than 300 staff working towards cutting-edge technology in oil, gas and the mining sector, including carbon dioxide geosequestration. The centre was established to enhance petroleum and mining operations, to partner and work with the industry and to undertake significant research projects. It is a leader in petroleum and minerals research and a centre where scientists can interact, exchange information and explore new ideas in partnership with the industry to ensure the ongoing sustainability of Australia’s resources and environment.

I welcome the opportunity to learn more about carbon capture from an expert, Dr Silvio Giger. Dr Giger is a structural geologist with the CSIRO and specialises in research technologies to increase oil and gas recovery in order to help secure Australia’s long-term energy security. He also assesses the viability of long-term geological underground storage of CO2—an important role in this day and age. Carbon capture and storage technologies could be well utilised in Australia. The centre’s location in West Australia is highly appropriate, given that West Australia produces two-thirds of Australia’s non-fuel materials and about half of it is petroleum. As well, West Australia produces around 70 per cent of Australia’s natural gas and 68 per cent of its crude oil production. The strong investment means that geological rock formations are among the most studied in the world, and a good base for geosequestration adaption.

A Perth basin is being studied for its potential to store CO2. There is a shale layer over the top, which I have already alluded to generally, which has been identified as a very good seal. It is a sandstone reservoir large enough to store the total emissions from all major sources from the south-west of Western Australia—an estimated 22 million tonnes per year. As I said, one of the areas that sorely need this as a result of the Collie coalfield and what is called the Harvey fault is this ideal location. This is the one being explored extensively by scientists, particularly people like Dr Silvio Giger.

Chevron’s $50 billion Gorgon gas project is one of the largest resource developments in Australia off the coast of Karratha and will make the state a leader in the storage of greenhouse gases. The project will create 600 jobs and will be a leader in geosequestration technology. The major aspect of that project is to ensure the successful sequestration of carbon dioxide as a by-product. It is estimated to capture and store three million tonnes of CO2 per year for 40 years. The CO2 will be separated from the gas and injected into a saline reservoir 2,000 metres below Barrow Island. It will cut the project emissions by 36 per cent. The technology is already in practical use.

The Victorian Otway Basin project, basically a geosequestration test project, was launched this year. It involves compressing and transporting 100,000 tonnes of carbon dioxide and then sequestering it in a natural gas reservoir two kilometres below the surface. I understand some 18,000 tonnes has already been stored. It serves as an example as to what can be achieved and where Australia can go with this technology.

Energy efficiency and reducing emissions is prominent in my electorate. As I have mentioned previously, Alcoa has already taken direct action to address climate change. Globally its emissions are down by 36 per cent on 1990 levels. At the two refineries in Canning they have cut emissions by 12 per cent a tonne over the same period. It has invested in energy efficient cogeneration, CO2 geosequestration and carbon capture technology.

There are two cogeneration plants at the Pinjarra refinery. This technology offers energy efficiency of 75 per cent, compared to only 30 per cent for conventional methods, and saves more than a million tonnes of CO2 emissions a year at Pinjarra compared to coal-fired power. This is the equivalent of taking 140,000 cars off the road per year. Essentially it means that Alinta, Alcoa’s partner, is able to supply more consumers with electricity, and the steam that is created in this process and would traditionally be wasted is used by Alcoa in its refinery for greater energy efficiency and lower greenhouse gas emissions. Even before this unit was completed, it became a finalist in the 2005 WA Environment Awards.

I have only a short period of time left, so I would like to say that the coalition acknowledges the importance of taking a unified commitment to the Copenhagen summit. We want an unconditional five per cent reduction on 2000 levels by 2020 and conditionally up to 25 per cent. But we propose an earlier start to the emissions abatement and the potential to build on a 2020 target via voluntary action. As I have said many times on previous bills, Australia should wait until we go to Copenhagen, to find out what the great emitters of this world are doing, rather than locking ourselves into a legislative framework that gives us no flexibility to be in step with the rest of the world.

The penalty, of course, is exporting jobs, exporting income and exporting damaging environmental gases to places like Indonesia, who produce far less efficiently and are greater emitters in their refineries than we are in Australian refineries. It is just crazy for us to be ahead of the game before the rest of the world decides how it is going to get on board.

For some reason, the Labor Party thinks that being ahead of the game is smart. All it is going to do is cost jobs. What about the workers? I have said to the member for Charlton, the former ‘champion of the workers’, that realistically, when he is talking about these things, he has forgotten about the workers, because he is exporting jobs. Companies like Alcoa tell me that they will have to go offshore because they will not be able to compete in any efficient way in Australia if this legislation comes in with the targets that the Labor Party is suggesting now and wants to lock us into before we have a level playing field.

The Rudd government needs to think seriously about its levels and its target. The coalition is strongly supportive of cutting greenhouse gas emissions. When the Labor Party talks about signing Kyoto and brandishes that around as a great achievement, it fails to tell the rest of the world that Australia was already achieving the Kyoto targets. I do not know if people understand this. When I say to people in my electorate, ‘Do you understand that, before Australia even signed the Kyoto protocol, we were actually achieving the Kyoto targets, unlike the rest of the signatories who don’t?’ they reply: ‘Why don’t people tell us that? Why don’t people tell us that Australia actually meets the Kyoto targets, instead of saying how terrible we are?’ Well, we do, we always have and the symbolic signing of Kyoto did nothing more to reduce greenhouse gases in Australia. It is just a crazy ideological bent that they are off on.

The coalition’s green carbon initiative aims to achieve, by 2020, additional annual reductions of at least 150 million tonnes of carbon dioxide equivalent encompassing these measures. I conclude that this legislation is obviously supported because it is sensible. The geosequestration technology is in its infancy, but Australia is at its leading edge. We have a magnificent mindset in Australia, through the scientists that we have in the organisations I have already acknowledged. They are ahead of the game, and the rest of the world is getting on board. As I said, Gorgon is going to be one of the outstanding models of what can be done in this area. That is the reason it has received state and federal environmental approvals to go ahead with this massive project. It is going to produce trillions of tonnes of energy efficient gas for the rest of this world, and it will leave Australia as a showcase on how we should store our greenhouse gases.

Debate (on motion by Ms Grierson) adjourned.