Offshore Petroleum and Greenhouse Gas Storage Amendment 2019

BILLS - Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Bill 2019, Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2019 - Second Reading

House of Representatives

Watch Matt's speech here 

Mr KEOGH (Burt) (11:30): I second the amendment. I am quite delighted to be able to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Bill 2019 and the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2019 before us. At the start I want to say that I join with the member for Hunter in his comments, particularly the need to make sure that Australia meets its Paris target commitments and the important role that carbon capture can play in meeting those targets. But, of course, as the member for Hunter also highlighted, it's important to note the complete lack of government policy in relation to making sure that we meet those Paris targets, and that is very, very disappointing.

Despite that lack of policy direction coming from government, fortunately, what we are seeing is business moving itself toward this end, because business sees that this is not only in its economic interest but also in the interest of all of us who want to continue to live on this planet. Of course, they realise what it appears some members of the government's frontbench clearly don't realise, which is that there is a human role being played in the climate change that we are experiencing on this planet. We can see the lack of regard the government has not only for climate change in general, and the need to make sure that we have solid policy settings to meet the Paris targets, but also for this legislation. How many members do we have from the government speaking to this legislation in this debate? None. It is only the Labor side that is acknowledging the importance of this legislation in this debate today and it is gravely disappointing that we're not seeing any speakers at all from the government side.

I'd like to acknowledge that my home state of Western Australia is the home of a well-established and reliable LNG export and supply industry for natural gas. Indeed, some of our projects are the biggest in the world. The bills before us today seek to transfer regulatory oversight of offshore greenhouse gas storage wells from the responsible Commonwealth minister to the National Offshore Petroleum Safety and Environmental Management Authority, NOPSEMA. Fundamentally, that means that these bills will help ensure that Australia has the safest and most environmentally responsible methods for pursuing carbon capture and storage in our offshore oil and gas fields. In practice, this would add to NOPSEMA's current portfolio of responsibilities the management of the environmental impact of offshore gas wells alongside its current responsibility for the management and good operation of those other gas and petroleum activities.

Carbon storage operates by taking carbon dioxide from industrial processes, including, of course, gas extraction, and pumping it underground to be stored at high pressure. Such injections can be as deep as two kilometres below the seabed. Carbon capture and storage is widely recognised as one of the key strategies for reducing greenhouse gas emissions. The International Energy Agency estimates carbon capture and storage could remove up to 85 per cent of carbon dioxide emissions from power production.

There are more than 40 carbon storage projects operating around the world, and here in Australia we have possibly the most significant of those. The world's largest carbon capture and storage project is now operating on Barrow Island in my home state of WA. The Gorgon Project is a joint venture between Chevron, ExxonMobil and Shell, and is a mere glimpse into what we have the capacity to do in this country to contribute to meeting our carbon emission targets. And there are more projects in the works around Australia.

Workers on these offshore carbon-capture storage facilities, like with all offshore facilities, work in potentially dangerous conditions, and that brings me to the bills that are in front of us today. These bills will empower NOPSEMA inspectors to determine whether the regulated entities are complying with their obligations. Key amendments to this legislation are necessary to support and effect the transfer of regulatory functions and powers for the environmental management of offshore greenhouse-gas storage sites to NOPSEMA to ensure that it has a comprehensive set of powers to inspect and regulate offshore petroleum operations.

Perhaps most notably, this bill proposes a number of amendments to strengthen NOPSEMA's ability as a regulator to monitor, investigate and enforce breaches on offshore oil and gas operations, with the intention of keeping workers and the environment safe and healthy. These changes are in response to issues that NOPSEMA itself has identified in undertaking its vital compliance monitoring operations to make sure that they have adequate and appropriate powers to enforce compliance in these high-hazard areas.

These bills propose an extension to NOPSEMA's ability to enter premises without warrant. They will empower NOPSEMA to undertake monitoring inspections of titleholders without warrant in relation to their safety as well as in relation to the company's environmental obligations. Currently, they don't require a warrant to enter the premises of a titleholder in relation to an investigation. However, now these same entitlements and powers will be extended to related entities such as contractors.

These bills seek to strengthen and clarify the powers of NOPSEMA inspectors to monitor and enforce compliance on offshore rigs. This means they can inspect without warrant the premises of contractors working for titleholder entities and the premises of entities who've agreed to supply oil spill equipment. This is due to the fact that many contractors are the ones that actually hold the information that is vital to investigations that take place in respect of these facilities and respond in emergency situations. The more entities that NOPSEMA is able to secure this access for, the greater its ability to respond effectively as a regulator. Labor believes that these amendments will significantly increase the safety of workers and improve environmental outcomes in this area.

In addition, these bills provide NOPSEMA with the ability to conduct integrity inspections of wells without warrant, so that they can be undertaken promptly on an as-needs basis. The bills also provide the regulator with the ability to order enforceable undertakings where it detects a breach. This is intended to both unclog the court systems and enable a more tailored approach to regulation.

Offshore rigs are a unique beast. They should be managed and cared for by the organisations and regulatory systems that best understand them. This is why enforceable undertakings are a sensible and appropriate response to some breaches. However, as has been highlighted in the banking and financial sector, this approach will not always be appropriate. An enforceable undertaking may be used in response to breaches in a manner that is proportional to the breach. An enforcement officer, such as an inspector, can readily make these assessments to respond in a timely and appropriate fashion. But it is not inappropriate for enforceable undertakings to be issued as a remedy in relation to the most serious of breaches.

The amendments before us today outline the circumstances in which these enforceable undertakings will not be applied—situations in which the contravention is connected to a facility, contraventions involving reckless conduct, where the contravener has had a conviction for work-related fatality in the last five years or where the contravener has had more than two prior convictions from separate investigations over the last decade. This legislation should make it easier for NOPSEMA to do its job—to look after the environment and the staff who do dangerous work each and every day. In the context of a high-hazard industry such as this, noncompliance can literally be the difference between life and death or environmental disaster. This legislation makes positive steps to enforcing compliance to avoid such outcomes.

Schedule 4 of the bill includes amendments to enable a NOPSEMA inspector to take possession of a document or item if deemed necessary in an inspection. In the context of this high-hazard industry, compliance can be expensive, but noncompliance, as I mentioned before, could cost much more than merely dollars.

This bill states that the defendant in cases of liability will bear an evidential burden in relation to the question as to whether there has been fault in the form of a failure to comply with a regulation or direction. I can tell you now, as a former federal prosecutor, that I can attest to the necessity and benefit of these enhancements that will be provided to NOPSEMA as the regulator.

This bill states that the defendant in cases of liability will bear an evidential burden in relation to the question as to whether there has been fault in the form of a failure to comply with a regulation or direction. I can tell you now, as a former federal prosecutor, that I can attest to the necessity and benefit of these enhancements that will be provided to NOPSEMA as the regulator. These bills make positive steps for the safety of workers on offshore facilities and put forward a system of compliance and responsibility that strengthens the current legislation in respect of safety and environmental protection.

The LNG industry is one of WA's and the nation's most vital industries economically, environmentally and, of course, for jobs. We must support this industry, and these amendments assist in providing that support through a holistic and empowered regulatory regime. I support the amendment put forward by the member for Hunter and the legislation.