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

I move:

That this bill be now read a second time.

This bill amends the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003 (the Safety Levies Act) to impose levies on offshore petroleum titleholders to enable the National Offshore Petroleum Safety Authority (NOPSA) to recover the costs associated with undertaking the regulatory functions in relation to the integrity and safety of wells and well operations conferred on NOPSA by a combination of amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (the OPGGS Act), which came into force in November 2010, and regulations made under the act.

Honourable members will recall that last year parliament passed legislation augmenting NOPSA’s functions to include the functions conferred by the Offshore Petroleum and Greenhouse Gas Storage Act and its associated regulations with respect to non-occupational health and safety structural integrity for facilities, wells and well-related equipment. The amendments gave NOPSA regulatory responsibility for all aspects of structural integrity of petroleum facilities, wells and well-related equipment. The amendments also clarified that an occupational health and safety duty of care applies to titleholders in relation to wells and well-related equipment. NOPSA has responsibility for monitoring and enforcing this titleholder duty of care.

Following on from the legislative changes to NOPSA’s functions and responsibilities, part 5 of the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations will give full effect to these changes by transferring regulatory functions and powers relating to management of well integrity and well operations to NOPSA.

NOPSA is funded on a full cost-recovery basis with levies raised from the offshore petroleum industry. It is crucial that NOPSA is resourced adequately to undertake its functions. The uncontrolled release of hydrocarbons from the Montara platform in August 2009 demonstrated that the regulator of offshore wells and well operations must have sufficiently skilled and experienced staff available to effectively and diligently discharge their regulatory responsibility wherever well operations are taking place.

The levies that are currently imposed by the safety levies act are facility based, payable by the facility operator and confined to occupational health and safety. These levies do not extend to funding NOPSA’s regulation of wells and well operations of titleholders under the Offshore Petroleum and Greenhouse Gas Storage Act and part 5 of the resource management and administration regulations.

These new levies imposed by this bill will ensure that NOPSA is able to recover costs associated with undertaking the extension of its regulatory functions.

Three new well related levies, an annual well levy, a well activity levy and a well investigation levy are imposed by this bill.

• The annual well levy will recover NOPSA’s general regulatory costs associated with undertaking its functions in relation to the integrity of wells and well related equipment. It will also cover NOPSA’s general costs associated with monitoring and enforcing compliance with the titleholder occupational health and safety duty of care in relation to wells.
• The well activity levy will recover NOPSA’s costs associated with the assessment and approval of specific well activities under part 5 of the resource management and administration regulations.
• The well investigation levy will cover excessive regulatory costs reasonably incurred by NOPSA in investigating well related incidents. It will only apply where NOPSA’s costs, when conducting an inspection in relation to a breach or suspected breach of the titleholder duty of care in relation to wells, exceeds $30,000.

In light of the issues arising from the Montara incident, the Australian government is committed to ensuring that NOPSA has sufficient powers and capability to effectively regulate all aspects of well integrity and well operations, pending the establishment of a single national offshore petroleum regulator. Collection of these levies from titleholders who carry out well operations will ensure that NOPSA is adequately resourced to fulfil its well related responsibilities under the Offshore Petroleum and Greenhouse Gas Storage Act and associated regulations.

The title of the safety levies act will change to the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003, to reflect the expansion of its content to include levies relating to wells. I commend the bill to the House.

Debate (on motion by Mr Pyne) adjourned.