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

On behalf of the opposition, I want to confirm that we welcome the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 and the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009 and welcome the commitment by the government to the policy underpinning this legislation, implementing and refining on a proper basis a framework for the development and use of carbon capture and storage technology.

The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment Bill 2009 includes technical amendments, corrections to the 2008 legislation and minor policy changes that have stemmed from reviews in the area. Having had a small role in assisting the government with the construction of this bill, I can say that it is an ongoing work in progress because it is at the cutting edge of a totally new area of public policy: the long-term—and by ‘long-term’ I mean several tens, and possibly hundreds, of years—storage of greenhouse gas in appropriate repositories well below the surface of the earth. The bill provides further clarity for the injection and geological storage of greenhouse gas substances, as I have said, in Australian offshore areas. Bear in mind that the Commonwealth is responsible for offshore areas. The states will have to come up with comparable and mirrored legislation with respect to onshore areas.

Specifically, the bill: provides for an expedited consultation process for the granting of an access authority to titles in adjoining offshore areas where the title holders have consented to the access; changes who makes the decision to declare a location from the designated authority to the joint authority, which is a very good change; changes who makes the decision to grant scientific investigation consents from the designated authority to the joint authority; and amends the act to require notification of discovery of petroleum in a production licence area, and this particular amendment is a very important one. The amendment, as I read it, says that, if a greenhouse gas producer strikes oil while seeking to inject and exploring for an appropriate repository, they have to notify of that discovery, as is required for other titles. It extends the period of notification of discovery of petroleum from immediately to within 30 days from the completion of the well that led to the discovery. That is a very important consideration, given that we have now potentially three different types of subsea rights users with respect to these offshore regions. Predominantly, we are thinking of both the North West Shelf off Western Australia and the Bass Strait region adjacent to the Gippsland coalfields.

There were two additional sets of amendments introduced by the government in the House in relation to this bill after its introduction. These amendments relate to the new part 15 for the approval and registration of transfers of, and dealings in, petroleum titles. This amendment corrects an oversight in the 2008 legislation and a concern raised by the coalition at the time, I am pleased to report. The other amendment introduced by the government added a new part 13A into to the legislation and new part 9.10A to enable the minister to appoint a commissioner to undertake a commission of inquiry into factors specific or incidental to a significant offshore petroleum or greenhouse gas storage incident. As such, passage of this bill will enable the Commonwealth to appoint a commissioner to conduct a commission of inquiry into the incident at the Montara offshore oilfield in the Timor Sea. We are all aware of that recent incident.

In relation to the other bill in this package, the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009 amends the references to the Pipeline Safety Management Plan Levy in the act. This is effectively a name change for the existing levy and will facilitate pipelines being covered under safety regulations in future rather than pipeline regulations. The Inpex pipeline is one that springs to mind that it is important the legislation covers. The explanatory memorandum states that there are no additional costs to industry as a result of this change. The same annual cost applies to the payment of levies in Commonwealth waters by the pipeline licensee. Safety levies are calculated annually, commencing each calendar year. The safety case levy is in place to recover NOPSA’s costs associated with monitoring safety compliance.

The legislation has been in development since 2005. As I have indicated, it was commenced by the Howard government. It is an ongoing process. I confirm that there is an enormous degree of bipartisanship with respect to this very important framework. The rest of the world is watching the way we are going about the business of establishing a legal framework for the long-term storage of greenhouse gas in offshore repositories.

The coalition in government was committed to implementing a regime to provide greenhouse gas injection and storage rights in offshore waters and it was during our time in government that the drafting of legislation commenced to make amendments to the Offshore Petroleum Act 2006. I congratulate the current minister for continuing that evolutionary process. He has done a very good job in progressing this. There will be future changes as different bits of technology come forward and as we consider different aspects of the management of our offshore petroleum rights and other access licences. There will need to be future changes. No-one should be in any doubt about the fact that this is an evolutionary process.

The legislation was considered by the parliament in 2008 and these bills now slightly refine that. We recognised that this legislation needed to carefully balance the interests of existing users of offshore acreage and their lenders, bearing in mind, in line with Senator Eggleston was just saying, that the enormous amount of capital required to develop offshore gas and oil deposits need to be protected. We cannot undermine those with a third type of tenement, so there is a balance to be struck. I think that the legislation strikes the appropriate balance and provides a useful framework, one that provides confidence and security to the existing titleholders such that they can rest easy that there is no undermining of their tenure and the value that they hold in those licences.

The coalition was keen to support the development of CCS technologies—indeed, we commenced the Otway Project down on the south-west coast of Victoria, which I am given to understand is a very successful injection of 65,000 tonnes, as it now stands—with successful monitoring and an ongoing learning process as to how we detect the carbon dioxide so that it is sequestered. The coalition invested $3.4 billion in its climate change strategy, including $1.1 billion for low emissions technologies including carbon capture and storage.

I commend the legislation without going on any further because I think a lot of the things that I have said do speak for themselves and echo what I said in 2008 when further amendments to this legislation came forward. I commend the bills to the Senate.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I rise to make a fairly short statement 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 because I particularly want to address the added amendments to the bill. These are in section 9.10A and deal with inquiries into significant offshore incidents. The Greens have circulated an amendment to this provision, although we welcome this additional amendment to this act. We do think it is important to provide the government with the ability to carry out an inquiry under this act and we understand some of the specific requirements, such as the inquiry having particular powers and being able to require documents from companies, et cetera. But we are concerned about the limited nature of the inquiry provisions in the bill.

The issue that has forced this addition has been a previous occurrence in my home state of Western Australia, where there were not sufficient powers, as I understand it, to carry out a full investigation of a previous incident in Western Australia. Of course, the Montara oil spill has produced a sense of urgency to include this investigative power into the act. I appreciate that there is a very strong need to look at the regulatory processes. Are they significant? Were they carried out? What caused the problem? I absolutely understand and agree with that range of issues. There is a very strong requirement to look at the incident and any or all of the operations in the offshore area, including offshore exploration operations, and recovery operations in the processing and storage of petroleum. However, oil spills of this nature are related not just to regulatory failures or whether regulations were actually complied with. By their very nature, they also have potential environmental consequences. For example, in this particular spill and others, you also have to invoke the national oil spill response plan.

The problem with Montara, for example, has become startlingly obvious to me and it is the fact that there are so many agencies involved. You have to keep going to each agency to find out information. For example, with the oil spill you go to AMSA because they are responsible for the cleanup. If you want to know about environmental monitoring or the impact on the environment, you have to talk to the Department of the Environment, Water, Heritage and the Arts at a federal level. If you want to know about the impact on fisheries, you have to talk to the Australian Fisheries Management Authority. If you want to know about the resource implications or some of the issues around the regulatory process, you have to talk to the Department of Resources, Energy and Tourism and Minister Ferguson’s office. You then have to talk to the NT regulators because they were the people that were responsible, under the delegated processes in the act, for making some of the approvals in the first place. Then you have to talk to the Western Australian authorities. You have to talk to the Department of Environment and Conservation in Western Australia. And then you have to talk to the Department of Fisheries in Western Australia. Are people getting the picture?

It is quite a complicated exercise to find out this information. Each one of those agencies has some form of responsibility. I understand and I take on board what I have been told by the government, that these agencies are meeting and talking daily. But it does not make it any easier for the community and stakeholders to find out what is going on. Each one of these agencies has responsibility. Each one of these agencies may or may not be carrying out their regulatory responsibilities effectively or adequately—in any circumstances, I am not just talking about Montara here—and also their regulatory legislation may not be sufficient.

The Greens very strongly believe that we need a wrap-around inquiry here. We also need to be reviewing what the environmental impacts are and whether the responses have been adequate. At the moment I do not consider that they have been. From the evidence I have been given there is still no monitoring plan in place. There is still no short-, medium- or long-term monitoring in place. People are still not adequately sampling the water. I understand that we have got some mechanisms in place to look after Ashmore Reef and Cartier Island. I also noticed on the AMSA website on 15 September that they mentioned that the sheen is getting closer to Cartier than had been previously indicated. But the overall monitoring program is not in place.

In fact, I have had two different answers on the monitoring program from AMSA, who I am told is not responsible for monitoring because they are responsible for the cleanup program and implementing the response plan. And I have had a different answer from the environmental authorities saying that they thought AMSA was doing some monitoring. Well, I was clearly told that AMSA are not doing some of that monitoring. The overall point here is that there is no overall monitoring plan in place yet. It is also a little bit unclear to me whether the company has accepted that they need to pay for long-term ongoing monitoring and what the extent of that long term ongoing monitoring will be.

The upshot here is that, while the Greens support the legislation and we support the inquiry mechanism, we are concerned that if this is the only investigation we are going to have into the Montara incident it is not comprehensive enough. It does not deal with the response plan, it does not deal with the environment side of things and it does not deal with the impact on fisheries, for a start. So we have circulated an amendment that will put specific requirements into this bill to allow a full investigation. If the government does not support putting those additional terms of reference into this legislation I ask the government what other mechanism they are going to put in place to review the overall response to and impact of this oil spill. We need to look at the current activities to see if they will be adequate into the future and if they need reviewing. I do not want to pre-empt any outcome but I do believe that they should be reviewed. Certainly, I believe that the way the environmental response has been handled needs to be reviewed. What is the government going to do about those elements of the response to this spill if they are not going to support the amendments that we have circulated? Their plans under this investigation are certainly not adequate.

I also add that I think the powers given here to the commissioner to enable the commissioner to investigate the areas that they have the power to under this amendment should also be provided to any other inquiry if the government envisages taking another course of inquiry to look at the other elements I have mentioned. Those powers are certainly the type of powers that need to be provided to any other inquiry, if the government sees that there should be a second or third inquiry, for example. The powers should be available to any other investigation the government undertakes. I ask that, when the minister representing the minister responds, he give an indication as to whether the government sees this as being the only form of inquiry that will be undertaken into this particular spill. The measures that we are asking to be included should also be included for any other offshore incident, but should be included particularly in the case of the Montara oil spill if the government is planning to have any other form of inquiry to address the other issues that urgently need addressing.

Mark Arbib (NSW, Australian Labor Party, Minister Assisting the Prime Minister for Government Service Delivery) Share this | Link to this | Hansard source

I thank the Senate for its contribution to the debate 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 and for facilitating the speedy passage of the legislation. The legislation makes minor policy and technical amendments and reduces regulatory burdens on the offshore petroleum industry as well as streamlining and clarifying administrative processes. It also removes ambiguities and makes some minor technical corrections.

These amendments bring improvements to the legislative framework for the offshore petroleum and greenhouse gas storage industries without increasing the regulatory burden and, in some specific provisions, reducing that burden. Most importantly, particularly in light of recent events, this legislation creates a standing power enabling the responsible minister to appoint a commissioner to undertake a commission of inquiry into the operational, human and regulatory matters specific to or incidental to a significant offshore petroleum or greenhouse gas storage incident. The power is limited to where a significant offshore petroleum or greenhouse gas incident has occurred and where it would be appropriate to consider operational, human and regulatory issues related to that incident. The purpose of the amendments is to correct an administrative gap in the provisions of the act for the investigation of these matters.

Recent incidents involving uncontrolled release of hydrocarbons jeopardising human and environmental health and essential infrastructure have demonstrated that the existing investigatory powers are insufficient. An inquiry for the purposes of determining operational, human and regulatory factors would inform regulators and operators of causal factors contributing to significant incidents relating to offshore oil and gas exploration, development, production, greenhouse gas storage and/or their commissioning. This power will enable the government and industry to learn from incidents and to be better prepared to prevent similar incidents occurring in the future. I thank senators for their support of the legislation and commend it to the Senate.

Question agreed to.

Bills read a second time.