House of Representatives- Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008

I rise to speak in support of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 and the Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008. These bills create a new class of offshore titles that provide for the transportation by pipeline and the injection and storage in geological formations of carbon dioxide and other greenhouse gases such as methane.

—I rise to speak in support of the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Annual Fees) Amendment (Greenhouse Gas Storage) Bill 2008, the Offshore Petroleum (Registration Fees) Amendment (Greenhouse Gas Storage) Bill 2008 and the Offshore Petroleum (Safety Levies) Amendment (Greenhouse Gas Storage) Bill 2008. These bills create a new class of offshore titles that provide for the transportation by pipeline and the injection and storage in geological formations of carbon dioxide and other greenhouse gases such as methane.

Carbon capture and storage is a process by which carbon dioxide—or potentially other greenhouse gases—is captured and separated from a source such as a power plant and then transported and injected into a geological formation, often undersea, for permanent storage. Through the creation of these new offshore titles, these bills provide for access and property rights to be allocated for the capture and storage of greenhouse gases. A greenhouse gas injection licence will authorise the injection and storage of what is termed in the legislation as a ‘greenhouse gas substance’. Under regulations, the responsible minister will have the power to extend the meaning of ‘greenhouse gas substance’ to include other greenhouse gases in several circumstances, including, firstly, if the protocol to the London dumping convention is amended to permit geological storage of other greenhouse gas substances and, secondly, if the provisions of the legislation are extended to include the permanent storage of methane from offshore petroleum operations.

The Offshore Petroleum Act applies in the Commonwealth offshore jurisdiction, between three nautical miles offshore and the outer limits of the Australian continental shelf. Under the proposed model the Commonwealth will be primarily responsible for the administration of greenhouse gas storage. This differs from current arrangements that apply to the petroleum industry, under which there is joint authority between the Commonwealth and state and territory administrations. The framework established by this legislation will provide a harmonised and nationally consistent approach to carbon capture and storage. This will result in reduced administrative costs and greater certainty for market participants.

This bill, although it is specific to a particular technology, is part of a broader comprehensive approach to dealing with the challenge posed by climate change. The scale of this challenge requires national leadership. It is clear that human induced climate change poses a threat to our prosperity, our natural environment, our lifestyle and standard of living, and our community. The uncertainty that is created by both the changes in weather patterns and the greater variability in weather patterns has serious implications for our economic prosperity. Climate change is an issue that will profoundly affect Australia’s economy and future national prosperity. The Minister for Climate Change and Water made this clear in a speech to the CEDA State of the Nation conference on 6 June, earlier this year, when she said:

… this Government believes climate change is an economic issue, and the only way to tackle climate change is with real economic reform.

The response of each country to the challenge of climate change will be unique to their particular circumstances. Australia’s response will necessarily be shaped by the importance of the coal industry as both a source of energy and a source of export revenue. Currently 80 per cent of Australia’s electricity is generated from coal. Black coal from New South Wales and Queensland remains an important and growing source of export revenue. In 2005-06 coal generated some $24 billion in export income for Australia, and it is expected to be worth some $55 billion this financial year. Quite simply, Australia is a fossil fuel dependent economy. Even as we invest in renewable energy sources and even as we reduce our energy consumption, Australia will remain a fossil fuel dependent economy for some time yet.

As a Victorian, I understand the critical importance of brown coal to our state economy. Brown coal has been regarded since the 19th century as a cheap and easily accessible source of energy. The scale of the resource that is to be found in the Latrobe Valley is, I suspect, not appreciated even by Victorians, let alone other Australians. What is understood is that brown coal has helped to underwrite much of Victoria’s industrial and broader economic development. It is at present the case that the enormous deposits of brown coal that are found in the Latrobe Valley fuel some 95 per cent of Victoria’s electricity generation. The central part that brown coal plays in the Victorian economy is, whatever occurs in relation to other forms of energy generation, likely to continue for some time to come. The scale of the resource alone—estimated, at current rates of usage, to be a 500-year supply—would indicate that brown coal is going to continue to be used. Certainly planning in the Latrobe Valley, with which I have had some involvement, and planning by the state government for the future assumes that there will be continuing use for some time to come of the enormous brown coal resource in the Latrobe Valley.

The Rudd government understand the important role that coal has played in building our national prosperity. In addition to this bill, the Minister for Resources and Energy announced in July the establishment of the National Low Emissions Coal Council and the carbon storage taskforce. The minister said at the time:

The Taskforce will examine the work already underway in Australia and indicate priority issues going forward. It will make recommendations to the National Low Emissions Coal Council on a forward work program for geological mapping, infrastructure and storage locations.

The carbon storage taskforce is particularly important in the process of making carbon capture and storage a reality for Australian industry. This approach has been welcomed by the Australian Coal Association. To acknowledge the importance of coal to our national prosperity in no way diminishes our commitment to tackling climate change. I have had a long passion for the natural environment of our country. As I said in my first speech in this parliament in February:

We need to live in the land in a way that will leave it improved on our passing and not depleted. It can only sustain us short term if we sustain it long term, for our children and our children’s children.

To deal properly with climate change requires us to understand the economic reality that sustains our standard of living while also acknowledging the scientific reality of human induced climate change. Denial of economic reality is just as dangerous as denial of scientific reality.

For a long time now, the scientific evidence has been overwhelming. Senator Minchin, one of the climate change deniers on the other side of the other house, claimed last year:

There remains an ongoing debate about the extent of climate change …

Of course there remains an ongoing debate on this matter. There are so many avenues of scientific inquiry that there is always going to be debate. That is the nature of scientific research. But researchers around the world have meticulously and methodically established a body of evidence that shows that climate change is real and that it is being caused by human activity. For a long time now, Australians have understood this and have been taking action at an individual level, at a community level, at a corporate level and at a state level to alleviate the impact that climate change will have on our nation. The election last year of the Rudd Labor government has finally provided Australia with the national leadership that is required to tackle this issue.

It was a little disturbing to come into the House today and hear the member for Flinders apparently moving away from what we had hoped might be a more bipartisan approach to the national leadership that is required on climate change. Very directly, it would seem that there still remain very serious divisions among those opposite as to what action should be taken in relation to climate change. One of these divisions was exposed this morning by the member for Flinders, who has had until now—and perhaps may continue to have—some responsibility for environmental matters on the other side of the House. Following a statement that members of the opposition seem to like to make often—that Australia is responsible for only 1.2 per cent of global emissions—we had this statement from the member for Flinders: ‘Action alone is irrelevant.’ I listened carefully to the member for Flinders when he said that. He followed on with reference to the large number of coal-fired generators that China and India are planning to construct in the next few years. He then made an even more direct statement: ‘Unilateral action will mean nothing.’ He then went on to try to explain what he described as the three pillars of the opposition’s policy in relation to climate change and the need for action on climate change. They are, one would have to say, very shaky pillars indeed, because, under cover of what is meant to be a debate about a group of bills dealing with carbon capture and storage procedures, the member for Flinders strayed to an accusation that the Rudd Labor government is not treating deforestation of the world’s rainforests seriously.

These statements that the member for Flinders has made here this morning—that action alone is irrelevant and that unilateral action will mean nothing—put him as the opposition spokesman in this area at odds with statements made very directly by the newly elected Leader of the Opposition as recently as July this year on this very subject. The member for Wentworth said:

The coalition’s policy, the Howard government’s policy, last year was that we would establish an emissions trading system not later than 2012.

Of course, that is a remaining area of difference that the government has with the opposition, because we believe very strongly that urgent action is required and it has been made more urgent because of the failure of the Howard government to attend to these matters. Mr Turnbull went on to say:

It was not conditional on international action; it was obviously done in the context of international action.

That was the former shadow Treasurer, now Leader of the Opposition, saying in July of this year that the proposal for an emissions trading system was ‘not conditional on international action’ and yet here we have the member for Flinders today persisting with this opposition position that for Australia to act is somehow irrelevant and that for Australia to take action will, as he puts it, mean nothing. It is a complete failure on the part of those opposite to understand the need for Australia, as a major producer of coal, a major exporter of black coal and a major user of brown coal, to set an example for the world and to show other countries who are using coal that there are different and cleaner ways of using coal that might offer some future for the use of this resource. Far from being irrelevant, action by our country will show leadership to the rest of the world and is an important step for us to be taking.

This group of bills before the House sends a clear message to the business community and to the scientific community: we are serious about climate change; we are serious about finding solutions to climate change that are in Australia’s best interests; and we are serious about carbon capture and storage as a solution. To be sure, it is a solution that requires more research and more work, but we as a government are setting up a framework within which that work and that research can take place. The technology is an exciting one and is particularly promising given Australia’s economic and geological circumstances. Around the world, there are international pilot projects taking place in Canada, in Poland, in the Norwegian part of the North Sea and in Algeria. This technology will be particularly important for the electricity generation sector, which makes up 35 per cent of net national greenhouse gas emissions. These bills, by creating a framework for the access and property rights associated with transportation by pipeline and the injection and storage in geological formations of carbon dioxide and of other greenhouse gases, will help Australia to meet its long-term target of reducing Australia’s greenhouse gas emissions by 60 per cent by 2050. I commend the bills to the House.