Glenn Sterle (WA, Australian Labor Party, Shadow Assistant Minister for Road Safety) Share this | Hansard source

Labor supports the passage of these two bills: the Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures) Bill 2019. These bills amend the Offshore Petroleum and Greenhouse Gas Storage Act 2006. They were referred to the Economics Legislation Committee on 5 December and the committee reported on 7 February, recommending that the bills be passed.

The purpose of these bills is to improve the environmental management and workplace safety of offshore petroleum areas which will be used to store greenhouse gases. This is known as carbon capture and storage or CCS. The legislation allows titles in state and Commonwealth waters to be unified in one title for the purpose of the legislation and for Commonwealth levies to be raised on the greenhouse gas storage operators in that unified title.

The first bill, the Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019, seeks to fix an anomaly in current offshore petroleum arrangements. State waters extend three kilometres from the coast, and beyond three kilometres they are Commonwealth waters. Yet greenhouse gas storage operations will be conducted into old gasfields that straddle both state and Commonwealth jurisdiction. The cross-boundary amendment bill allows for a Commonwealth and state offshore petroleum title to be unified for the purposes of greenhouse gas storage and for that unified title to be under one jurisdiction and regulated by Commonwealth agencies.

Under this bill adjacent Commonwealth titles can also be unified for greenhouse gas storage. Offshore petroleum activities in Commonwealth waters are regulated by statutory agencies: the National Offshore Petroleum Safety and Environmental Management Authority, which we refer to as NOPSEMA, and the National Offshore Petroleum Titles Administrator, which is known as NOPTA. These amendments mean that if a project owner is injecting greenhouse gases into an old gasfield that straddles, for instance, Victorian state waters and adjacent Commonwealth waters then the legislation will treat them as one title and one jurisdiction, with regulatory oversight to be conducted by NOPSEMA and NOPTA with no ambiguity.

To make this unification of title and jurisdiction effective, the amendment bill establishes a cross-boundary authority consisting of the responsible Commonwealth minister and the relevant state or Northern Territory resources minister. The cross-boundary authority is similar to current joint authority arrangements for petroleum authorities in Commonwealth waters except that the cross-boundary authority will make decisions regarding the granting of cross-boundary greenhouse gas storage titles.

The cross-boundary amendment bill also enhances NOPSEMA's warrant-free inspection powers. An oil spill emergency has to be declared by the CEO of NOPSEMA before warrant-free powers are triggered, and the emergency must arise in Commonwealth waters. The bill limits the warrant-free inspection powers to determining whether the titleholder has complied or is complying with the oil pollution emergency provisions of an environmental plan and determining whether a titleholder is complying with a significant incident direction given by NOPSEMA. Significant incidents are those where there is petroleum escape or a threat of it. NOPSEMA can give directions to titleholders during significant incidents to do or not to do certain actions.

Under the existing legislation the regulator cannot give directions where the incident is in state or Northern Territory waters and the relevant emergency response assets could be under agreement with the state. This amendment fixes that problem. NOPSEMA can now make significant incident directions across the unified title. The power to make inspections without warrant is a serious one. It is considered necessary where the constraints of time and the serious nature of an emergency would make normal judicial warrants ineffective. Offshore petroleum titleholders operate under many oil spill response obligations, and the warrant-free inspection powers allow NOPSEMA to monitor whether the titleholders are complying with their response obligations.

This amendment bill also allows NOPSEMA's inspection powers to apply through state and Northern Territory waters within the unified area under the cross-boundary authority. Premises that can be inspected under NOPSEMA's powers are not confined to rigs and the offices of the operators. Vessels and aircraft are also defined as premises. We note that the minister will be able to require a person to produce information relevant to administering the greenhouse gas storage area, and in giving the information the person earns partial immunity on prosecution. Partial immunity is available only to individuals. The argument for this partial immunity is that for effective management of the greenhouse gas storage activities it might sometimes be more important to establish the facts than to be able to use the facts in a prosecution or legal action. The bill also extends the polluter-pays provision of the current OPGGS legislation to state and territory waters. The polluter-pays principle is, as it says, that the title holder that caused the petroleum spill is responsible for its clean-up.

The second amendment bill, the levies bill, ensures that offshore petroleum levies imposed by the Commonwealth are imposed on the unified titles under the jurisdiction of the cross-boundary authority, even that portion of the unified title that is in state or Northern Territory waters. This is an important amendment for offshore greenhouse gas storage activities because the regulators, NOPSEMA and NOPTA, both operate on a cost-recovery basis. When greenhouse gas storage is no longer being conducted on one of these unified titles under the cross boundary authority, the Commonwealth accepts the civil liability for the whole storage site at site closing. The argument for this acceptance of liability in the explanatory memorandum is that, if the Commonwealth assumes the civil liability for the entire site, it will ensure the highest standards in storage operations.

These two amendment bills are effectively being made to create jurisdictional and regulatory certainty around an important industry of the future, carbon capture and storage. In particular, the amendments are relevant to the Victorian CarbonNet and Hydrogen Energy Supply Chain projects. These projects will sequester CO2 from Latrobe Valley power stations into the seabed of Bass Strait and also generate hydrogen as a fuel for export to Japan. The CarbonNet project will inject CO2 into an area that straddles Victorian coastal waters for three nautical miles and Commonwealth waters. Its stated capacity is to store two million tonnes of CO2 each year and also create a future hydrogen industry—a zero emissions fuel.

The most important aspect of these amendments and previous amendments that passed in October is that they improve the ability of governments and private operators to address greenhouse gas emissions and assist in the development of zero emissions fuels while also holding the operators to high standards of environmental protection and workplace safety. It should be remembered that carbon capture and storage is carried out in areas that have already been exploited for oil and gas, and it uses similar well and pipeline infrastructure to the oil and gas business. So it is crucial that greenhouse gas storage is made safe for workers and, of course, for the environment. But carbon capture and storage is also a crucial technology in pursuing international emissions reduction targets, such as those Australia signed up to in Paris.

The International Energy Agency report from 2016, which is titled 20 Years of Carbon Capture and Storage, states that keeping global warming below two degrees will have to include carbon capture and storage. The Intergovernmental Panel on Climate Change has also advocated carbon capture and storage as one of the key technologies that will help maintain global temperatures below two degrees Celsius. Carbon capture and storage is already being conducted at Barrow Island, in that magnificent state of Western Australia, where Chevron is sequestering one million tonnes of CO2 per year from its Gorgon LNG operation. The CarbonNet project, which provides the rationale for these bills, will do the same thing in the Bass Strait. However, it will involve another key element.

Joined to the CarbonNet project will be the Hydrogen Energy Supply Chain project, which shares CO2 from the storage operation and then turns it into hydrogen. The plan for the current pilot plan at Port of Hastings is for the hydrogen to be loaded onto ships and transported to Japan. Not only is this a potential export industry for Australia but hydrogen is a zero emissions energy source. Using carbon storage and making it into something else is called carbon capture, utilisation and storage, or CCUS. The Commonwealth and the Victorian state governments have both invested in the hydrogen facility. The estimates are for a $2-billion-per-year hydrogen export industry as Japanese power companies and industrial companies convert to hydrogen. So projects such as CarbonNet and Hydrogen Energy Supply Chain are important components of Australia's pursuit of emissions reduction targets.

CCS is the only method for removing CO2 directly from coal-fired power stations and permanently sequestering it. When you combine CCS with hydrogen manufacture, the hydrogen can be made cheaply enough to make it a feasible large-scale energy source. However, we need to ensure that the pursuit of these future abatement strategies and fuels are not achieved at the cost of the environment or at the cost of worker safety. After that brilliant contribution, how can you not support these amendments?