David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Hansard source

by leave—I move opposition amendment (1); amendments (2), (4) and (5); amendments (3) and (10); amendments (6) to (8); and amendments (9) and (11), all on sheet 5620 revised. In effect, it is moving amendments (1) to (11):

(1)    Schedule 1, page 7 (after line 3), after item 10, insert:

10A  Section 6

Insert:

closure assurance period has the meaning given by section 249CZN.

(2)    Schedule 1, item 169, page 103 (after line 32), after section 249AJ, insert:

249AJA Retention lessee or production licensee to be notified of proposal to advertise blocks

Scope

        (1)    This section applies if:

             (a)    the responsible Commonwealth Minister proposes to publish a notice under subsection 249AJ(1) specifying a block that is the subject of a retention lease or production licence; and

             (b)    at the time of the proposal, the lessee or licensee is entitled to make an application for the grant of a greenhouse gas holding lease over the block.

Notification

        (2)    The responsible Commonwealth Minister must, at least 60 days before the proposed publication of the subsection 249AJ(1) notice, notify the lessee or licensee of the proposed publication.

Deferral of publication of notice

        (3)    If, during the period:

             (a)    beginning when the lessee or licensee is given the notification under subsection (2); and

             (b)    ending at the end of the day of proposed publication of the subsection 249AJ(1) notice;

the lessee or licensee makes such an application, the responsible Commonwealth Minister must not publish the subsection 249AJ(1) notice until:

             (c)    the application lapses; or

             (d)    the lessee withdraws the application; or

             (e)    the responsible Commonwealth Minister refuses to grant the greenhouse gas holding lease or greenhouse gas injection licence.

(3)    Schedule 1, item 169, page 104 (after line 21), at the end of section 249AK, add:

Decision must be made within 12 months

        (3)    The responsible Commonwealth Minister must make a decision under subsection (2) within 12 months after the end of the period specified in the relevant notice under subsection 249AJ(1).

(4)    Schedule 1, item 169, page 111 (after line 12), after section 249AP, insert:

249APA Retention lessee or production licensee to be notified of proposal to advertise blocks

Scope

        (1)    This section applies if:

             (a)    the responsible Commonwealth Minister proposes to publish a notice under subsection 249AP(1) specifying a block that is the subject of a retention lease or production licence; and

             (b)    at the time of the proposal, the lessee or licensee is entitled to make an application for the grant of a greenhouse gas holding lease or a greenhouse gas injection licence over the block.

Notification

        (2)    The responsible Commonwealth Minister must, at least 60 days before the proposed publication of the subsection 249AP(1) notice, notify the lessee or licensee of the proposed publication.

Deferral of publication of notice

        (3)    If, during the period:

             (a)    beginning when the lessee or licensee is given the notification under subsection (2); and

             (b)    ending at the end of the day of proposed publication of the subsection 249AP(1) notice;

the lessee or licensee makes such an application, the responsible Commonwealth Minister must not publish the subsection 249AP(1) notice until:

             (c)    the application lapses; or

             (d)    the lessee withdraws the application; or

             (e)    the responsible Commonwealth Minister refuses to grant the greenhouse gas holding lease or greenhouse gas injection licence.

(5)    Schedule 1, item 169, page 189 (lines 30 to 34), omit paragraph 249CR(c), substitute:

             (c)    either:

                   (i)    the responsible Commonwealth Minister is satisfied that all of the greenhouse gas substance injected into the identified greenhouse gas storage formation or formations concerned will be obtained as a by-product of petroleum recovery operations carried on under the production licence; or

                  (ii)    the responsible Commonwealth Minister is satisfied that some or all of the greenhouse gas substance injected into the identified greenhouse gas storage formation or formations concerned will be obtained as a by-product of petroleum recovery operations carried on under any production licence, and that the grant of the greenhouse gas injection licence is in the public interest; and

(6)    Schedule 1, item 169, page 219 (lines 13 and 14), omit subsection 249CZF(8), substitute:

Decision must be made within 5 years

        (8)    If an application for a site closing certificate has been made under section 249CZE, the responsible Commonwealth Minister must make a decision on the application within 5 years after the application was made.

(7)    Schedule 1, item 169, page 219 (lines 15 to 22), omit section 249CZFA.

(8)    Schedule 1, item 169, page 219 (before line 23), before section 249CZG, insert:

249CZFB Acknowledgement of receipt of application for site closing certificate

Scope

        (1)    This section applies if an application has been made under section 249CZE for a site closing certificate.

Acknowledgement of receipt of application

        (2)    The responsible Commonwealth Minister must give the applicant notice of receipt of the application.

(9)    Schedule 1, item 169, page 223 (after line 16), at the end of Part 2A.4, add:

Division 8—Long-term liabilities

249CZN Closure assurance period

        (1)    If:

             (a)    a site closing certificate is in force in relation to an identified greenhouse gas storage formation; and

             (b)    the responsible Commonwealth Minister is satisfied that operations for the injection of a greenhouse gas substance into the formation ceased on a day (the cessation day) before the application for the site closing certificate was made; and

             (c)    on a day (the decision day) that is at least 15 years after the issue of the site closing certificate, the responsible Commonwealth Minister is satisfied that:

                   (i)    the greenhouse gas substance injected into the formation is behaving as predicted in Part A of the approved site plan for the formation; and

                  (ii)    there is no significant risk that a greenhouse gas substance injected into the formation will have a significant adverse impact on the geotechnical integrity of the whole or a part of a geological formation or geological structure; and

                 (iii)    there is no significant risk that a greenhouse gas substance injected into the formation will have a significant adverse impact on the environment; and

                 (iv)    there is no significant risk that a greenhouse gas substance injected into the formation will have a significant adverse impact on human health or safety; and

                  (v)    since the cessation day, there have not been any operations for the injection of a greenhouse gas substance into the formation;

the responsible Commonwealth Minister may, by writing, declare that the period:

             (d)    beginning at the end of the cessation day; and

             (e)    ending at the end of the decision day;

is the closure assurance period in relation to the formation for the purposes of this Act.

        (2)    A copy of a declaration under subsection (1) is to be given to the holder of the site closing certificate.

249CZO Indemnity—long-term liability

Scope

        (1)    This section applies if:

             (a)    a site closing certificate is in force in relation to an identified greenhouse gas storage formation; and

             (b)    when the application for the certificate was made, the formation was specified in a greenhouse gas injection licence; and

             (c)    there is a closure assurance period in relation to the formation; and

             (d)    the following conditions are satisfied in relation to a liability of an existing person who is or has been the registered holder of the licence (whether or not the licence is in force):

                   (i)    the liability is a liability for damages;

                  (ii)    the liability is attributable to an act done or omitted to be done in the carrying out of operations authorised by the licence in relation to the formation;

                 (iii)    the liability is incurred or accrued after the end of the closure assurance period in relation to the formation;

                 (iv)    such other conditions (if any) as are specified in the regulations.

Indemnity

        (2)    The Commonwealth must indemnify the person against the liability.

249CZP Commonwealth to assume long-term liability if licensee has ceased to exist

Scope

        (1)    This section applies if:

             (a)    a site closing certificate is in force in relation to an identified greenhouse gas storage formation; and

             (b)    when the application for the certificate was made, the formation was specified in a greenhouse gas injection licence; and

             (c)    there is a closure assurance period in relation to the formation; and

             (d)    a person who has been the registered holder of the licence (whether or not the licence is in force) has ceased to exist; and

             (e)    if the person had continued in existence, the following conditions would have been satisfied in relation to a liability of the person:

                   (i)    the liability is a liability for damages;

                  (ii)    the liability is attributable to an act done or omitted to be done in the carrying out of operations authorised by the licence in relation to the formation;

                 (iii)    the liability is incurred or accrued after the end of the closure assurance period in relation to the formation;

                 (iv)    such other conditions (if any) as are specified in the regulations; and

              (f)    apart from this section, the damages are irrecoverable because the person has ceased to exist.

Commonwealth to assume liability

        (2)    The liability is taken to be a liability of the Commonwealth.

(10)  Schedule 1, item 274B, page 372 (before line 12), before subparagraph 435B(2)(f)(i), insert:

                 (ia)    the powers conferred by section 249AK;

                 (ib)    the powers conferred by section 249AL;

(11)  Schedule 1, item 274B, page 372 (after line 23), after subparagraph 435B(2)(f)(ix), insert:

                (ixa)    the making of a declaration under section 249CZN;

I will try to be brief with what is a very complex piece of legislation. As Senator Milne has quite rightly identified, this is the first time that I think a constitutional government, in the Western world at least, has sought to enact a framework for geosequestration of postcombustion or precombustion greenhouse gas captured material to be sequestered in circumstances where the Commonwealth only has jurisdictional power beyond the three-mile limit. Accordingly, your first thought is that this piece of legislation is essentially focused upon Gippsland in Victoria, where the burning of brown coal for electricity generation is a very big emitter of greenhouse gases.

I refer to the vital ingredients in any piece of legislation such as this. Firstly, it must be commercially viable. If there is going to be any future for geosequestration as a solution to greenhouse gas emission, we must have a commercial focus. We must then also seek to have a commercial focus mindful that we do not want to have any diminution or derogation of the rights held by oil and gas licensees or lessees where obviously there is a high correlation between likely repositories and prospective repositories for greenhouse gas sequestration and oil and gas deposits. I emphasise commercial viability because the ultimate users will be and have been to this point in time commercial entities supplying energy into the capital cities and their hinterlands of almost every state in Australia through the combustion of coal. Such sequestration must be affordable and such rights acquired without a predominance of red tape. In other words, the system has to be very user friendly.

The first opposition amendment deals with the closure assurance period. This is relevant to amendments (9) and (11). It is simply a definition and, as I mentioned previously with respect to Senator Milne’s and the Greens’ amendments, it establishes the 15-year period whereby the minister, through the observation of his skilled departmental scientific officers and those of the proponent, monitors the site prior to allowing the proponent formally to be able to say that the site has fulfilled its purpose and is a secure site such that the long-term liability shifts to the Commonwealth.

Opposition amendments (2), (4) and (5) deal with the rights of the petroleum titleholders and underpin the commercial integrity of the overall offshore petroleum gas and petroleum legal frameworks. In other words, what the minister and the government have sought to do is to allow the licensees and lessees of oil and gas titles to be able to intercede—’object’ is the word I would use, as a West Australian—where an applicant to geosequester a greenhouse gas brings an application on a retention lease or another title held by an oil and gas titleholder and that titleholder can effectively stop the geosequestration proponent from proceeding further. What that does, of course, is protect the rights of the oil and gas licensee, permit holder or leaseholder, as the case may be, and it quite quickly allows—I think the period is 60 days—the proponent to realise that there is going to be disputation over that particular site so that it can move on. That is a very difficult balancing act, and I think the minister has struck a fair balance. I think that it is workable. Both the oil and gas licensees and lessees would be reasonably satisfied that their interests and proprietary rights are being protected and that the proponent to geosequester greenhouse gases would have a reasonable opportunity of knowing in a relatively short and timely fashion that that is an unacceptable proposal so far as the existing titleholder goes.

Effectively, these amendments provide for and affirm the inherent correlation and interdependence of sequestration rights with oil and gas production rights, exploration rights and retention lease rights. Such rights will now extend to greenhouse gases derived from the processing of product from the titles of, for example, the North West Shelf. So we have a difficult situation in terms of the legislative framework. In the Gippsland area of Victoria, we would anticipate that there would be greenhouse gases produced onshore through the burning of brown coal, whereas on the North West Shelf there would be substantial portions of carbon dioxide produced as a by-product of the LNG industry. The oil and gas producers in the North West Shelf would have ready access to their existing tenements for the geosequestration of those greenhouse gases into the future. I think that this is a very reasonable, albeit highly technical and difficult, marrying up of those different requirements. I want to compliment the department and the minister for what I think is a very reasonable and proper attempt at seeking to cover the field in what is a very difficult and complex area.

With respect to amendments (3) and (10), again, in line with what I have said about the user-friendly nature and the minimum of delay and red tape from a greenhouse gas producer’s point of view, we seek to limit the minister’s ability to sit on applications for any longer than 12 months. The minister will be taking advice in the practical way that I anticipate that this will be dealt with. He will be calling on his department to assess the application from a geophysical and geotechnical perspective and he will have 12 months to make a decision. Whilst that timeline, from my point of view, could be a bit quicker, we have to be thankful for small mercies. In the scheme of this complex legislation, 12 months is probably quite reasonable. Ultimately, I anticipate that a proponent into the future—and I anticipate 10 years into the future—will come to the government with a plan for carbon capture and conversion into a substance to be piped into a repository some distance away from the power station. Part of that plan will incorporate a review of the legislation. They can ask the government to change the bits they do not like or maybe alter the regulations. I believe 12 months is a reasonable period and quite user-friendly. I think it tells us that the government is dinkum about making some legislation that is actually practically applicable.

Opposition amendments (6), (7) and (8) deal with the site closure certificate. If this were to be a successful scientific scheme into the future, I anticipate there would literally be millions of tonnes of greenhouse gas product injected into the particular site. At the end of the sequestration site’s usefulness or when the geophysicist says, ‘This site will not safely accommodate any more greenhouse gas,’ the proponent must prepare the site for its capping and closure. Thereafter, when the proponent is satisfied that the capping and closure can proceed and that the site has integrity, it will apply to the minister for a site closure certificate. The minister will have five years to second-guess and review all of the data and scientific information available, as I said to Senator Milne earlier, to take the advice of his department and come to a conclusion that the site certificate may or may not be granted. If it is granted, the liability resides with the proponent. The 15 years begins upon grant of that site clearance certificate. After 15 years, if all is well and there is no leakage, and if everything goes according to the plan that was incorporated from the site’s inception in the application, the minister will declare that the site assurance period has expired.

If the minister is satisfied on all the conditions set out in amendments (9) and (11), he will effectively grant that closure and close the site such that the liability and risk moves from the corporate entity. Importantly, the corporate entity may devolve into nothing. It may be a toothless tiger, a house of straw, that has no assets and capacity to meet the liability in any event. We have suggested that 20 years is a reasonable period from the decision of the proponent to close the site to when the minister may formally address all of the data and say, ‘Yes, I accept that the site is safe and closed and no liability flows.’ If the minister finds something else, it is a problem for the proponent, which is in line with what Senator Milne is concerned about. In passing, I think I have dealt with amendments (9) and (11). I think that we are all, to a greater or lesser extent, singing from the same song sheet. It is simply a question of balancing the commercial risk and the liability. I think that the opposition’s amendments have struck a fair, commercial and viable balance.