Offshore Petroleum and Greenhouse Gas Storage Bill
Thursday, February 25, 2010
Second reading
I am very pleased to speak on the Offshore Petroleum and Greenhouse Gas Storage Bill. This is an important bill generally for the energy industry, for the environment and for the future of Victoria. It is very important that these activities are part of the process to ensure that Australia, Victoria and our energy generation moves to a low-carbon-emission base. The coalition supports the development of carbon capture and storage and other clean coal technologies because they are of critical importance for the future of our state. Victoria is heavily reliant upon brown coal.
Depending on whose figures you believe, approximately 95 per cent of our electricity in Victoria is generated by brown coal, but it is also a source of our competitive advantage because it is a cheap source of energy. However, from the perspective of greenhouse gas emissions it is an unfortunate polluter.
Our economy, jobs and communities right across the state, but especially in the Latrobe Valley, are particularly reliant upon coal, and the future of the coal industry and those communities will be affected by the development of carbon capture and storage technologies.
Along with drying and gasification, a full carbon capture and storage program is a significant opportunity because it can lead to a massive reduction in emissions of up to 80 and 90 per cent, which would be an excellent outcome for the environment and for communities across the state, so it is worth trying to achieve.
However, it is important to note that this is not the only objective we should have in trying to reduce greenhouse gas emissions. Unfortunately we are still awaiting the government's climate change white paper and the associated legislation, which has been repeatedly delayed.
We also need to look at other emission-reducing activities such as other forms of carbon capture and storage, including algae, which has already been mentioned by the member for Malvern, and also sources of renewable energy -- wind, solar and geothermal -- which are very important opportunities for our community but must be undertaken with the support of local communities. Unfortunately we have seen an approach by the government which has neglected to involve communities in having a say on these renewable projects.
I turn to some aspects of the bill.
The bill re-enacts with modifications provisions regulating exploration and recovery activities and petroleum facilities. It also provides for the regulation of geological storage of carbon dioxide. The agreement between the commonwealth, the states and the Northern Territory -- the offshore constitutional settlement -- establishes that the offshore area within 3 nautical miles of the coast is within the jurisdictional area of the relevant state and territory, which is obviously what we are dealing with in this bill. Areas beyond that 3-nautical-mile limit are under the jurisdiction of the commonwealth. A bill which has been debated and passed by the federal Parliament complements this bill, and those bills have been drafted to fit nicely together.
The bill establishes a system for greenhouse gas storage site exploration similar to the system for offshore petroleum and exploration recovery permits, leases and licences.
The purpose is to allocate those permits to those who wish to explore and identify potential areas for sequestration of greenhouse gases under the ocean. If an area is deemed to be suitable for greenhouse gas operations by the minister, a greenhouse gas holding lease can be issued over the relevant area as allocated by a competitive tender.
As I have said, members of the coalition support carbon capture and storage technologies and their expansion and the enabling legislation to achieve that. Nevertheless we have some concerns in relation to the bill, although we are not opposing it at this time. The particular area of concern which was outlined very eloquently by the member for Malvern is the issue of limitation of liability and the fact that we are taking a position which is divergent from that of the commonwealth.
The commonwealth act provides that all liabilities are transferred to the Crown 15 years after the greenhouse gas injection operation is closed, but the Victorian bill fails to recognise any such limitation, so there is a clear distinction between the two. The concern is that the liability remains with the company after the surrender of the licence and after 15 years. This is likely to impact on the development of greenhouse gas storage in Victoria within that 3-nautical-mile limit, because companies will be faced with a choice between competing sites, given that if everything else is the same, one site will have limited liability and the other unlimited liability. Logically you would think that they would favour those sites with limited liability. Our concern is what the implications might be for Victoria of having this difference between the commonwealth act and the Victorian act.
We also have some concerns about the regulations. Many regulations will accompany this act, but they have not yet been developed and we are concerned about how detailed they will be. For example, the definitions clause of the bill states that 'greenhouse gas substance' means:
(a) carbon dioxide, whether in a gaseous or liquid state; or
(b) a prescribed greenhouse gas, whether in a gaseous or liquid state ...
The details are to be in the regulations, but we have not yet seen them, because the regulations have not yet been developed.
Another concern on which it would be helpful to have some answers from the government and the minister is the environmental management of such sensitive projects as offshore petroleum and greenhouse gas storage.
Our understanding is that the Department of Primary Industries will undertake the environmental work relating to greenhouse gas storage operations. The Environment Protection Authority is a well-respected regulator of environmental issues, but it has been excluded from this process in favour of the DPI. Members of the coalition would like an explanation from the government of why that is the case.
As I have said, carbon capture and storage is important for the future of the state. It is particularly important for the Latrobe Valley, and it requires support to enable the technologies, which are still a long way from being proven, to be put in place and developed. The government must focus on other areas of carbon capture and storage, other areas of renewable energy and other ways of reducing greenhouse gas emissions.
Coalition members have some concerns about provisions for the limitation of liability for activities in Victorian waters not being included in the bill, in the regulations or in the oversight of environmental management. For those reasons the opposition will not oppose the bill, but we look forward to the successful development of important technologies for the future of our state.
|
